Australian retailers are experiencing a perfect storm of economic, social and technological headwinds this year. The nation is gripped by a “consumer recession” with the ABS reporting a meagre 1.5% rise in consumer spending for the year to date, caused by interest rate hikes, increases in rental prices, inflation and a deepening cost of living crisis. 

Australian shoppers are rapidly evolving as they adapt to a new reality. Despite the pandemic’s online shopping surge, there is a noticeable return to in-store shopping with many consumers adopting a “boomerang” approach, combining both online and physical retail for their purchases. As a result, customers are increasingly seeking seamless omnichannel experiences such as Buy Online and Return In-Store (BORIS) and Buy Online and Pick Up In-Store (BOPIS).

To thrive in this evolving landscape, retail CIOs must therefore prioritise creating a seamless transition from online to in-store experiences to ensure profitability and brand loyalty. 

Digital solutions that retailers should prioritise

Shoppers tend to have greater trust in physical stores and believe they are more effective at resolving issues, especially when compared to retailers with an online-only presence. One solution to bridging the gap between online and physical stores is offering in-store return options This not only enhances customer convenience but also differentiates retailers from online-only competitors while boosting sales from in-store visitors, driving overall business growth.

Digital solutions, such as the integration of technologies like QR codes, kiosks, digital carts, and self-service checkout systems in brick-and-mortar stores, are key to meeting these omnichannel demands. However, outdated IT architecture and unreliable technology of legacy systems hinder retailers from adopting these technologies, which is crucial for maintaining retail competitiveness. 

Therefore, to ensure successful modernisation, retail CIOs must consider the following priorities:

1. Optimise customer experience & customer retention

Engaging customers on their terms is crucial. Whether exploring new products on a laptop or making a purchase through a mobile app, consumers demand seamless digital experiences across all touchpoints. Retailers therefore must have access to accurate, real-time data across the entire value chain, enabling them to craft customer-focused solutions while delivering the flexibility and engagement modern consumers crave. 

2. Break up siloed data to maximise use of customer data and channels

Data connectivity and integration across third-party software and disparate business tools has to be a priority. However, the effort to break up siloed data needs to align with in-store dashboards and digital tools to provide the frontline workforce with visibility into inventory, real-time logistics support, and sustainability metrics across the product supply line.

By connecting data from disparate sources retailers can maximise the use of customer data and digital channels for operational efficiencies and automation, reducing labour costs. Connecting data sources also enables retailers to leverage the power of digital touchpoints to increase revenues through personalised offers, targeted e-commerce marketing, and data analytics to forecast purchasing volumes and stock levels, ensuring a seamless omnichannel experience for consumers.

3. Plug into IoT

Technology partners can enable retailers to identify supply chain bottlenecks and offer data transparency by leveraging Internet of Things (IoT) connectivity and real-time sensors. Ultimately, these tools shorten delivery times, inform engaged customers, and build brand loyalty.

4. Become agile and resilient with a composable business strategy

Finally, decision-makers have to recognise that one size does not fit all. Avoid vendor lock-in that reduces a brand’s ability to respond quickly to market changes with new, agile solutions. A better choice is to look for partners versed in the “composable” strategy. This means organisations that can rapidly build and deploy innovative solutions using tested, pre-built software modules and digital components customised for retail needs.

Why retail leaders are turning to low-code

Low-code technology has seen widespread adoption in the retail industry, as retail leaders turn to it as a solution for rapidly developing new solutions for their customers. In a 2022 Mendix study, it was found that globally, 92% of retail and wholesale trade businesses had already adopted low-code technology with one-third of these businesses crediting low-code for their success in implementing hybrid retail models and digital pick-up shopping. These areas will experience significant growth over the next five years.

With low code, retailers are able to create customised applications that seamlessly connect online and offline shopping, providing customers with a unified shopping experience across multiple channels. They also equip retailers with the agility needed to adapt to changing market dynamics and emerging customer preferences, ensuring their competitiveness in this rapidly changing landscape.

Modernising retail systems requires time and investment. By focusing on these key objectives, brands can make real the promise of the truly hybrid, bricks-and-clicks enterprise.

In this scenario, everyone hits the jackpot: Consumers enjoy in-person shopping for its heightened sense of discovery with a retail workforce that’s empowered for responsive, strategic decision making at scale. And retail executives are afforded a connected digital ecosystem that’s geared to today’s consumer behaviour using solutions that are future-ready for tomorrow’s changes and volatility.

Finbar James Brown is country manager at Mendix ANZ.