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The retail sector has benefitted hugely from the rise of digital platforms, expanding stores’ reach and offering a range of services to earn the loyalty of online buyers. Yet retailers’ innovations don’t always improve the customer experience or their own business efficiency, according to a recent study from eCommera.
More than half (54%) of respondents to eCommera’s study, which polled fashion retailers in Western Europe with annual revenues of £30 million or more, said innovation was very important and a priority for their business. Nearly two in five (38%) saw the benefits of innovation but confessed it wasn’t a current priority. Only 8% of the sample considered it a buzzword with no real importance for them. But reactions varied markedly by country. In Germany, a relatively conservative market, one-quarter of retailers said innovation was just a buzzword. In the UK, by contrast, 76% said it was a business priority.
Retailers agreed that innovations should lead to definite improvements. Overall, 43% said a primary focus of their innovation program was improving the customer experience. Similarly, the main key performance indicators (KPIs) linked to innovation were customer satisfaction levels (mentioned by 45%), higher revenue (44%) and the number of new customers gained (42%).
But eCommera also found that some retailers seemed to pursue innovation for its own sake, while day-to-day customer experience suffered. For example, 92% of respondents had innovation on their agenda, but only 78% said their ecommerce orders were delivered on time. Moreover, 83% said they couldn’t ensure that their website would be fast and stable during peak traffic periods.
Many of the retailers who had the most severe issues at peak trading times were among those who had made innovation a priority for their organization. On the other hand, the firms with the most reliable sites also tended to cite innovation as a focus.
The innovations retail firms chose to invest in reflected their rather mixed approaches. Over half (52%) were already using mobile payments—a concrete step toward delivering better choice and convenience for mobile shoppers. In addition, 33% were tracking their customers in stores to note their behavior. The immediate rationale for some innovations was less clear, though. Some 23% of retailers were already using artificial intelligence, and one in five were developing or testing it. Virtual reality was also on the radar, though this was the least popular investment to date. While 17% of retailers polled were using it, and 16% were developing or testing it, 48% said they were not considering implementing any form of VR.
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