It’s an exciting time to be in retail. With disruption abound, the scene is ripe for the opportunist to make the right moves and gain traction where others fail to hit the mark.
While many are at helm tackling the challenges of disruption, digital transformation, and IT modernization, some retailers are turning the ship around quickly with the successful implementation of an effective API Product strategy. Across the board, we’re seeing businesses use microservices to leverage their internal resources and unlock innovation in:
- Omnichannel directives (AI)
- Backend systems and inventory
- In-store experiences (IoT, AR)
Read on as we explore how the simplified calls of API Products are uplifting Customer Experience (CX) in each category.
1. AI & Big Data for Omnichannel
In retail, the words omnichannel and seamless are thrown around so often, we rarely take a moment to think about what they really mean. An experience that is seamless has no rough edges across multiple channels. So smooth, a user forgets they’re using separate channels; omnichannel.
This kind of thinking is derived from the fact that most shoppers begin their journey online and flutter across multiple channels before making a purchase. So the goal is to extend the brand experience across those multiple “touch points” by projecting the same messaging, imagery/design, and access. This, of course, goes both ways; it’s not only about bringing the store to web and phone. Now, retailers are also expected to bring digital to the store.
Omnichannel is a Two-Way Street
To extend the omnichannel effort, we’re seeing both, Buy Online, Pick Up In Store and Buy In Store, Ship to Home — nearly reverse experiences, with high demand all around. An example of each are 1. Walmart’s new Pickup Discount availability, showing savings for those who shop online and choose to pick up instead of shipping, and 2. Bonobos Guideshops, which keeps every size and pattern in store for the fitting room, but then ships to your door, tailored and ready to wear.
In both cases, the retailer is benefited by an an uplift in revenue from the omnichannel effort; with Walmart the incentive for customers to save lightens shipping costs for the retailer. With Bonobos, the ship-to-home model lightens the cost of in-store inventory and maintenance. Side note: Speaking of Walmart and Bonobos…
Why do customers want your brand to be available both, instore and online?
“Ecommerce is no replacement for touching and feeling a product before making a purchase — 85 percent of people value this option, according to TimeTrade.” -Entrepreneur.com
It all boils down to convenience. Gone are the days of “how nice?” and “how much?” — enter the days of “how convenient?” Competition already offers the best quality and price. In order to stay ahead, retailers must let the people shop how they want to shop — and how do they like to shop? In the store and digitally. So give them both.
When you walk into Nordstrom, you’re encouraged to download an app so you can scan pieces found instore to get suggestions on similar units. This feature can take the shopping experience to heightened level by offering more suggestions, providing product details, and allowing the shopper to collect ideas in a wishlist or registry. It not only empowers the customer to have more control of their own shopping experience, it also frees up sales associates of one less task, storing rich data on customer preferences along the way.
Retail APIs to Extend Touchpoints Along the Customer Journey
Many large retailers have built so fast they haven’t had the chance to tap into insights right under their noses. These untapped data lakes must be made available to those within the organization who can utilize the information to understand the customer better and build experiences out for the entire customer journey. When you can connect in-store availability to the CRM system to start predicting personal preferences, the outcome is happier customers, more engagement, and ultra-rich data = more of the customer journey for you to own, understand, and build experiences for. A happy cycle, by all accords.
Picture you’ve offered an ideal in-store digital experience to capture the wedding registry process with your /Registry API Product (Notice we say Product here, because APIs should be managed like physical Products). Do it right, and you can capture the customer’s next big life experience, too — decorating the new house. After all, the color schemes are already saved in the registry list. What do you do with that list? How about reuse it for /Design a Room? And what’s next, after a wedding? How about /Design a Nursery?
With an API Portfolio of reusable building blocks, you’re able to integrate your existing APIs and microservices with third-party extensions, design your flow, define specifications and requirements, and click build and deploy your code template directly into runtime — all under one information model.
But Let’s Take a Look Under the Hood
In his book The Retail Revival, industry expert Doug Stephens paints a pretty picture of what’s facing the retail industry right now. It’s not so much a recession, he states, so much as the end of an era, he explains; an era when a whole generation of people were born with a shared taste for much of the same… everything. Essentially, a retailer’s dream. Stephens states there are 2 paths for retail giants: Retailers can 1. Pursue the low-price model (hint: think limbo), or 2. Reinvent the customer experience.
The clear option is the latter, and the only way to execute, as we’re seeing in the market time and time again, is through APIs & microservices. When you’re set up with an /Items API pulling resource details like Product-ID, Description, Price, Weight, Handling, Amount, etc. at the speed of cloud; when you’re able to abstract your own data in a moment’s notice — that’s when you stop worrying about which Big Idea to build out. It doesn’t matter which when you’re rolling out new products in a matter of weeks, so why not try it out. By the time that idea fails, you’ve launched three others that are thriving. In today’s economy, it’s the only way to innovate.
Build an API Portfolio for Reuse
Building out an API Portfolio of API Products and capability APIs is the key to third-party integration. As a retailer, you likely already have Buy Online Pick Up In Store — but when you can reuse it to expand your brand to locally relevant third-parties, you’re able to transcend beyond experience to customer journey.
For instance, when you’re able to integrate existing capabilities with external APIs like Twitter or Facebook, you can let your customers see an outfit over a photo of themselves, then share with friends to get an opinion. Perhaps the customer uses Facebook’s poll option; Let’s take a vote — which dress should I wear to the prom? Perhaps AI suggestions are sent from a list the customer has pinned on Pinterest. Maybe you want to offer the option to connect to Uber for drop-off service. At this point, your Buy Online Pick Up in Store has transformed into a suite of Advanced Digital Ordering experiences.
Big Data: Got it. Now What?
That rich customer data you’re collecting is of no value, if not exposed internally. One exciting omnichannel experience that exemplifies this is Shopkick’s Shopbeacon, which abstracts data from existing CRM (Customer Relationship Management) programs/loyalty programs and ties that to the user’s geolocation. So right down to where they’re standing in the store, customers receive a personalized shopping experience unique to their likes, similar to being chauffeured around the store by a sales associate.
However, we might be a few years off from perfecting the art of customer suggestions with AI, as Nikki Baird states in her article on Retail Predictions. She warns to watch for the rise of “fuzzy” product attributes, “ones that are derived based on customer behavior or interactions with the products before, during, and after the purchase process.” Our advice here — know your inventory. The better you’ve categorized unit descriptions and made that information available on the backend, the more accurate you can get with your CRM predictions on the front-end.
2. Backend & Inventory
It’s not as sexy as what they’re doing with the front of house, but it sure keeps the gears spinning. EPCs, or Electronic Product Codes, already lessen the need for security guards, but combine that technology with item-level RDIF (Radio Frequency IDentification) and you eliminate both, shoplifting and the need for inventory count. What a wonderful (cost-saving) thought.
Some retailers are applying this to the purchase level, where customers don’t even have to go through check-out, so long as their phone has their payment information updated. This has been seen at Amazon Go for a while now — “Just Walk Out” shopping.
With RFID at the item-level, retailers are able to track specifically which pieces are on which shelves. So as soon as a piece is removed from a shelf, a call is sent to replace it. And you no longer have the need to count what’s on the shelf, because it’s a live number, already on file. Meanwhile, this process feeds your CRM and AI initiatives — your system begins to notice patterns as it collects rich data, like customer preferences and which items are sold at what times of year, helping with the overall ordering and supply chain production schedule.
Other companies are handling their item-level inventory with the use of cameras. At any rate, there are enormous cost savings in the efficiency of an infrastructure based on microservices. An infrastructure that aligns inventory across disparate technologies and lines of business through M&A at incredible speed. Systems that automate tasks like item count and restock, track items throughout the supply chain, and enlighten the general CX (Customer Experience) for all involved.
3. In-Store Experiences: IoT & AR
Ever heard the phrase “Eye level is buy-level?” A large threat the retail industry faces is the fact that in-store customers are dropping off — and that’s where a lot of magic happens. Shelf placement, for instance. Some stores even sell placement in their stores along the end of the aisles and center tables, and have for decades (ahem… publishing industry, I’m looking at you). On the other hand, lost foot traffic means loss of the opportunity for up-selling through sales associates and visuals. It’s true; having fewer people in the brick-and-mortar stores affects revenue in more ways than one. In-store experiences offer a solution by bringing customers into the stores, sometimes in droves — and APIs make it all possible.
The Internet of Things
If you’re in retail, you’ve likely heard of the Hointer experience by now, where customers can simply indulge in an IoT experience by scanning a pair of jeans they’re interested in with their smartphones, head to the dressing room and… voila! There they sit, in the perfect size and color. This is made possible when a retailer connects item-level inventory and CRM to Hointer’s technology through APIs. While some companies might take months, perhaps over a year to get set up for this kind of experience, those who have already decoupled and exposed item-level inventory could expedite the process of integration to a matter of weeks.
Where VR has earned its place in the entertainment industry, retail has favored AR for its ability to combine virtual with the products being sold. Companies like IKEA and Houzz employ this feature by giving users the option to see furniture they’re considering in the actual room they’re decorating. This is made possible by plugging in vector graphics to each unit, then integrating with the cameras of various mobile devices. It’s not always perfect in practice, but it certainly helps for all of those visual decision makers out there.
Again, when you’re ready to plug in and go with your entire business capabilities as reusable building block APIS that can easily connect to any third-party API for local relevance — that’s when you stop worrying about the technologies of the future like RFID, AI, AR, VR, IoT. But it all starts with how you’re set up under the hood.
Where to from here?
We think the best way to set yourself up for digital scale is to convert every core business function you have into reusable APIs, down to the atomic level (resource methods), and organize them in an API Portfolio. So that when you do need to build fast, you’re essentially plugging in what you have, rather than building from scratch and not being able to find or reuse the resources you’ve already put time into building out.
An API Portfolio provides you with a holistic repository that gives you access to every capability you have. It allows for the perfect SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) by showing you what you’ve got and what you’re missing, while keeping all of your assets and mappings in one place for easy access. Having a searchable portfolio with various views (by domain, by function, by API type, by dashboard) of your domains, methods, and third parties is key for innovation — sometimes all it takes is a bit of mix and match to get the ideas flowing for disruption. Next stop: digital market leadership.
Interested in getting to the pure digital state with digitalML? Book a call today.