By Rob Garf
I spent last week traveling throughout Europe to share the results from recent studies conducted by the National Retail Federation (NRF) and the ECC Koeln (German institute for retail researches). The NRF study, Digitizing the Store – The Next Wave of Online and Offline Convergence, surveyed more than 200 technology and business leaders in the US and Europe to quantify the convergence of POS and ecommerce technology, and its impact on digitizing the store. The ECC study, Digitizing the Point-of-Sale – it all Comes Down to Customer Benefits, surveyed more than 1,000 German consumers to assess the priorities of in-store digital services and gain a better understanding of their purchasing behavior.
Both reports show that German retailers will accelerate consumer-facing technology investments to serve connected and influential consumers.
Single Platform Emerges as Solution to Satisfy Increasing Consumer Demands
Findings from the NRF study shows that nearly 40 percent of German retailers want a single platform at the center of the consumer shopping experience to manage interactions and transactions across channels. This represents a higher rate than both the US and pan-European averages. A single platform operates as the common system of interaction to bridge the virtual and physical shopping worlds. It consolidates and manages key data elements, business rules, and functionality that historically lived in multiple systems to deliver a seamless shopping experience across channels.
This trend challenges the status quo of traditional POS software, which has been a mainstay in physical stores by processing reliable and efficient transactions. More than 75 percent of German retailers are looking to replace their aging POS software over the next three years. With a POS solution it is difficult to extend functionality across channels because the legacy architecture is generally closed, requires heavy customization and is designed for a single location. Therefore, given its more modern and flexible architecture, ecommerce software is emerging as the most logical approach to evolve and establish a single platform. According to the survey, four times as many German retailers plan to leverage ecommerce over traditional POS for their next-generation store software. This clearly speaks to a tipping point in the store software market as retailers realize that they must find a more flexible solution that knits together formerly disparate customer touch points.
Single Platform Must Provide Easy Access to Inventory Across Channels
German consumers, according to the ECC study, have rated in-store digital services that enable them to access inventory across channels as high a priority. This includes functionality to check online availability and order products that are out-of-stock in the physical location. As consumers weave between channels throughout their shopping journey, it is no surprise that they want easy access to inventory from numerous sources of supply so they can buy merchandise when and where they desire. Endless aisle is an important byproduct of these capabilities, as store associates can prevent walked sales by providing consumers inventory visibility across the enterprise and complete secure transactions on the sales floor.
Retailers already are extending robust ecommerce functionality into stores to leverage the same product, order, and customer data that is used for online browsing, purchasing and service. It is essential to continue these investments to better serve German consumers with increasingly higher expectations regarding the digital services that they receive in the store.
The Gap Between US and German Retailers is Closing
I was asked several times in my travels last week about retailer maturity in Germany compared to the US relative to in-store digital services. My answer historically was that German retailers – along with other European retailers – were generally three years behind the US in digital and omni-channel innovation. Based on these research studies and my observations over the past year, the gap has closed so significantly that US retailers need to get on a plane and see what’s happening on the other side of the pond.