Inflation is still having a major impact on consumer behavior, and retailers need to leverage leading-edge technology to respond.
Although recent data suggests inflation is slightly easing and consumer sentiment is tracking upward, the fact remains prices for most products are up substantially from where they were a year or two ago. In response, customers are prioritizing value over loyalty to brands and retailers.
This environment provides retailers the challenge of keeping their established customers and the opportunity to take shoppers and market share from their competitors. Technology should be a cornerstone of any retailer’s strategy to lower their prices and raise their profile among inflation-conscious consumers.
Here are three specific enterprise areas where retailers can apply innovative technology solutions to reduce cost without sacrificing quality of products or customer service. And thanks to the widespread availability of hosted, SaaS-type cloud implementations, in many cases retailers can achieve deployment and ROI fairly quickly.
Real-time inventory tracking
The average retailer’s supply chain is rife with opportunities to remove distribution costs from the final price they charge customers for a good. For example, many retailers are now achieving real-time or near-real-time inventory awareness using tracking software that works in tandem with existing scanning equipment and product barcodes.
Particularly for retailers that sell apparel goods or control their own private-label supply chain, RFID may also offer a cost-effective means of tracking inventory using source tags and basic reading hardware.
[Read more: Brazilian fashion retailer Renner optimizes inventory with RFID]
By knowing where products are in their supply chain, retailers can more effectively distribute inventory and keep stores properly stocked, reducing the costs of rerouting inaccurate shipments or having to rush deliveries. Retailers can also greatly reduce shrinkage in the supply chain, a major source of unnecessary added expense that often finds its way to consumers.
[Read more: NRF: Retail shrink nears $100 billion; ORC a top challenge]
Every shopper loves a discount, and the more that discount meets the needs of a specific customer, the greater that love is. CRM technology is constantly evolving to enable retailers to provide customers with highly targeted promotional offers that take into account their past behavior, what other products are in their virtual or physical cart, and even where they are physically located.
As artificial intelligence (AI)-based data analytics solutions can analyze greater volumes of customer data at a more granular level in a shorter time period, retailers are gaining the ability to provide highly contextual offers. Retailers who equip their stores with computer vision and shelf sensor technologies, like those used for frictionless shopping, can deliver consumers discounts specifically tied to products they select, handle or even look at, via mobile app or smart cart screen.
[Read more: Exclusive: Consumers see top benefits of frictionless shopping as…]
Online, AI solutions are enabling retailers to make more individually tailored promotions at scale than ever before. In addition to offers that can pop up on a retailer’s site based on past behavior plus what a customer is browsing or placing in their virtual cart, AI-based digital marketing tools let retailers boost post-sale online conversions with targeted texts and emails.
[Read more: Casey’s automates personalization with AI]
Finally, retailers can provide customers affordable products while putting much of the “heavy lifting” onto either third-party partners or even customers themselves. Increasingly, retailers are discovering the advantages of offering hosted e-commerce marketplaces where smaller sellers can offer their wares.
These marketplaces are an easy way for retailers to expand their inventory without taking on the costs of storage or distribution (some larger players, like Walmart and Amazon, offer these services for a fee). Enterprise marketplace technology platforms exist to help even independent retailers like Mathis Home effectively participate.
Meanwhile, resale marketplaces allow retailers to sell quality used products provided by customers, at a discount. As with third-party marketplaces, retailers can leverage a hosted solution to offer resale commerce without having to invest in supporting infrastructure.
Retailers can even pay customers for used goods in shopping credit, further reducing direct cost while helping to clear inventory. And reselling merchandise, rather than sending it to a landfill, aligns with increasing consumer interest in sustainable commerce.