Top digital challenges retailers face
Retailers are challenged because they do not have sufficient technology to create, manage and scale content with demand.
The pace and complexity of managing digital retail businesses will increase over the next 12 months – and most retailers are not prepared. That’s just one eye-opening finding from the Incisiv report Digital Complexity: Thriving in Unpredictable Times. The research goes on to note that less than half of retailers believe they can effectively manage all aspects of their digital business in the coming year.
“Retailers are challenged by not having sufficient technology to create, manage and scale content on demand,” said Neha Sampat, CEO of Contentstack, a content experience platform provider headquartered in San Francisco, California. “With the right tools, retailers can address the challenges described in the report and modernize all aspects of their business.”
Sampat and her colleague Jasmin Guthmann, Vice President and Board Member, The MACH Alliance and Head of Corporate Communications for Contentstack, presented the findings of the report in their session, “Retailers Speak: New Research Unpacks the Toughest Digital Challenges of the Next 12 Months.” They spoke at Simpler Media Group’s recent virtual Digital Experience Summit (DXS, now CMSWire CONNECT), which Contentstack also sponsored.
We spoke with Sampat and Guthmann about the growing complexity of digital retail and how retailers can prepare to keep up with the growing demand for content and personalized experiences.
What drives digital complexity
Simpler Media Group: During your presentation, you discussed findings from the Incisiv report covering digital complexity. Can you discuss the key findings and why it’s important for retailers to sit up and take notice today?
Content stack: The biggest takeaway from the report is that most retailers are not prepared to handle the increase in digital complexity coming their way over the next 12 months. For example, 67% expect the number of digital assets they must manage to increase. It’s everything from product descriptions to content marketing. But only 32% say they are ready to deal with this increase effectively.
In addition, the research showed that only 17% of retailers can launch a standard online marketing campaign within a week. This figure drops by more than 4 times when a new marketing campaign is launched.
SMG: According to the research, retail complexity is driven by three key areas: digital merchandising, shopper engagement and personalization, and store transformation. For each of these, where would you say retailers are today and where should they strive to be?
Content stack: For digital merchandising, retailers reported that the number of SKUs they sell online will increase and that they need to support this growth with more digital items and better inventory management. To do this, retailers must look to technology that will allow them to scale their content and composable architecture that enables integration between inventory systems and the rest of the digital e-commerce stack.
A personalized shopping experience complete with content tailored to customers’ needs is a fundamental expectation for consumers. For example, consumers expect to find their favorite products (and related content) on Instagram, TikTok, the company’s website, in the app and everywhere else they visit. They also expect to buy these products on their preferred channel as part of a frictionless shopping experience. Retailers know this, but they need the right technology to effectively manage and customize all of their digital content across their omnichannel strategy.
When it comes to store transformation, retailers are realizing that brand and store experiences, operations and technology need to be rethought to better unite the physical and digital shopping experience. To do so, they need to prepare their operations and technology to support higher digital volumes, such as online purchases made in-store, and a digital shopper experience including in-store apps and self-service tools. In-store technology investments will continue to increase as retailers try to find their version of a blended store experience.
Barriers to create frictionless experiences
SMG: The report shows that less than half of retailers believe they can effectively manage their digital operations in the next 12 months. One of the areas they struggle with is bringing digital and physical experiences together. Discuss where retailers fall short and what changes they can make to stay ahead of the competition.
Content stack: Retailers expect to grapple with new in-store technology, self-service tools, online SKUs and the number of digital assets to manage – all of which are sure to grow in the coming months. The inability to blend physical and digital experiences poses a significant business risk in the face of increasing customer expectations. Retailers that fail to improve performance across these dimensions may lose customers to competitors.
One thing that will help retailers is to rethink their existing technology stack. Pivoting to composable architectures will allow retailers to leverage tools that make digital content easier to create and scale without day-to-day IT involvement. This makes it easy to quickly build out and test new customer experiences until retailers find the combination that appeals to their audience.
SMG: According to the report, retailers are concerned about the increase in the number of digital assets they will need to manage over the next 12 months, and only a third believe they will be able to manage them well. What are the biggest challenges you see for retailers when it comes to digital assets, and how can they overcome these challenges to ensure their business remains strong today and into the future?
Content stack: Content as we’ve understood it has only been around for a little over a decade. Everywhere consumers look, there’s a new TikTok influencer, YouTube personality or blogger reviewing or promoting a product – and the availability of content everywhere is only growing. The biggest challenges for retailers will be keeping up with the demand for content in terms of asset creation, personalization, management and scaling to all the channels their consumers use.
The biggest underlying problem retailers face is that they don’t have the right capabilities to support demand. They can start by finding tools that allow them to adapt to future content. Building an agile and flexible commerce portfolio and an ecosystem of best-in-class technology is critical to ensuring retail remains strong in the future.
SMG: The report notes that retailers are also struggling to offer frictionless experiences across channels and personalize digital experiences with relevant content. Can you give an example of a customer who faced the same problems and is now seeing success?
Content stack: Prior to 2019, Dawn Foods handled all of their orders in person and by phone. The retail bakery needed an agile platform that could scale as their needs changed. They made the decision to add an online option that would give their customers access to their extensive product catalog, the ability to order with one click, and a convenient online payment portal.
They chose Contentstack for its MACH (Microservices, API-first, Cloud-native and Headless) powered digital infrastructure and ease of use. Since Dawn Foods adopted Contentstack, website content updates run 80% faster compared to publishing with a monolithic CMS. Together with Contentstack, Dawn Foods enabled its marketing team to create, review and publish personalized omnichannel experiences for customers, collected extensive customer usage data and improved the agility to publish content changes in minutes.
How the right technology investments can help retailers thrive
SMG: Meeting changing buyer preferences is something retailers have been challenged with for years. Yet the report finds that most retailers are still unprepared to deal with these rapidly changing preferences. Why has it been so difficult for retailers to meet these consumer expectations, and why is there more urgency now?
Content stack: Today, there is more to running a successful business than ensuring you are two steps ahead of having the products consumers want and need. The pandemic, supply chain challenges, inflation and new solutions are driving the need for retailers to respond quickly to changes and growing customer demand. However, the biggest challenge holding retailers back is being handcuffed by slow, outdated technology. Too often, retailers work with monolithic technologies that reinforce silos for marketing, product, and IT teams. To truly meet consumer expectations, retailers must be willing to challenge the status quo and look for new opportunities, especially within their technology ecosystem.
SMG: More than half of all retailers believe their current technology platforms cannot support their business needs over the next year, the report said. Where do you see the greatest opportunity for technology investment to help organizations navigate increasing business complexity?
Content stack: The first step we suggest is to identify your biggest capability gaps and match them with their corresponding technologies. For example, if your current CMS requires too much hands-on IT work for simple marketing updates, then you know there’s a place to start. From there, we recommend taking the composable approach and building your ideal stack. A composable architecture makes it easier for businesses to unlock opportunities and effectively tackle challenges.
SMG: What are the top recommendations retailers should take from the report to help them meet and exceed the increasing complexity they will face in the coming months?
Content stack: There are some recommendations dealers should take into account:
- Evaluate, measure and benchmark how you expect your core execution capabilities to grow over the next year.
- Quickly address any areas where you have underinvested. This includes especially customer-facing technology that prioritizes speed and agility, with a composable framework that allows your business to respond quickly to a changing market.
- Focus on areas you can win quickly. Consider use cases where the impact is clear, measurable and reportable. Quick wins can help clear the way and create advocates who will turn into greater resources and investment.
Learn more at cmswire.com/connect.