Private businesses can profit from technological innovation

THE retail sector has seen changes driven by technology possibly more than any other – particularly at the customer facing front line, where making the experience as easy and enjoyable as possible is what drives growth.

Those that are thriving in this traditionally tough market of high competition and low margins are largely those that have welcomed technological innovation as an opportunity to drive profitability.
The list of technologies that have impacted on retail in recent years are near endless – from the obvious rise of online shopping and the encompassing logistics that sit behind that to smart changing rooms to in-store beacons which recognise shoppers from their mobile device and send offers to their phones.
Because it is at the coalface, technology innovations first tested in retail often filter through to other industries.
David Gardner, technology partner at TLT Solicitors, says the law firm is seeing the number of technology instructions increase and that more and more of these are around improving things at the customer facing end.

 
“That’s a key difference we are seeing – the tech projects that can really drive growth are disruptive and usually are customer facing. Those are exciting and transformational,” he says.
Dr Robert Phillips, enterprise lecturer at Alliance Manchester Business School, thinks the biggest innovation in the tech and digital space, being used by many different sectors, is in marketing and in particular proximity marketing.
He gives the example of the SnapChat mobile app, which allows users to share a video or photo with friends. When the recipient has viewed the image it disappears.
“Businesses can send a message or picture which is then deleted by the expiry date of the deal or offer. So the customer has to act on it now or it is gone,” he says.
Co-op Electrical was one of the first companies to do this with a laptops for students offer in 2013. Its campaign offered students £30 off their online price on its full range of laptops, including free delivery.
“SnapChat can also be used to encourage people to send images back to win a prize – it’s about creating that personalised experience and having direct interaction,” adds Dr Phillips.
It is also about the collection of customer data – something that started with Tesco’s Clubcard in 1995 and has since evolved into the mining of that data to further improve and personalise the customer experience.
Big data is becoming critically important to all businesses in terms of understanding who the customer is and what they want.
 
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Gardner says: “That’s technology for data acquisition. But companies must be careful about what they do with that data, what third parties get to see it, that it is stored securely, and what they have told customers they will do with that data.”
Much can be done to drive growth just by harnessing a company’s existing internal data if it is all centralised to show the ‘big picture’.
Improved systems that integrate data should increase efficiency and ultimately deliver better customer service.
Andy Brown, of KPMG Enterprise Consulting, says: “Large systems are good as they mean all the data is in one place. The finance department can provide a lot of data but it is backward looking. Nirvana is to have leading indicators – that’s taking for example business development data and using this to identify and highlight potential future issues.
“For a construction firm, for example, health and safety data is a great leading indicator as a well run construction site from a health and safety point of view is well run generally. A poor health and safety record means a site is not well run and often indicates that there is a risk of not meeting the project’s objectives and timescales.
“There are a series of indicators to show it is higher risk, so it shouldn’t come as a complete surprise when things aren’t being delivered on time. That’s about joining up complex bits of data. Having one system makes that much easier.
For many businesses investment in technology has until now been about helping to cut costs and drive efficiencies whereas Brown says that in the last year businesses have at last been saying ‘I need to grow’.
 

 

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