The kind of transformation the retail industry is undergoing is nothing short of an overhaul. We see that the primary drivers of this transition have been technology, shifting consumer behaviours, and intense competition. The retail ecosystem is one such diversity where different systems, including point-of-sale terminals, e-commerce platforms, inventory management software, and customer relationship management systems interact with each other, daily.
At the heart of this evolution lies data. From understanding customer preferences to optimizing supply chains, data has become the lifeblood of modern retail. Now, while there is a constant (read, every second) production of both humongous and complex, but valuable, data, it is very easy to lose it if not managed smartly. And the reality is that, unfortunately, it is often siloed, inconsistent, and inaccessible which hinders decision-making, hampering operational efficiency and eroding profitability. One intelligent way to dodge these challenges is by deploying iPaaS and allowing data integration. iPaaS, aka Integration Platform as a Service, is a game-changer by all standards. By providing a unified platform for integrating and managing data, iPaaS empowers retailers to transform data into a strategic asset. It helps in gathering and compiling data from different systems into one place to be processed, analysed, and shared. Stay with us as we dive deeper into this.
A Word from The Retail Grapevine
The retail industry is going through one of its most reinvigorating phases. Retailers are grappling with the lightning speed of technology-driven changes, uncompromising customers and whatnot. It is both the best and the most challenging time to be in the market. Acuver has been delivering retail technology since more than a decade, and we talk to global, retail leaders every day about their needs, their customer’s needs and the road ahead. We are privy to the dynamic environment that is characterized by rapid technological advancements, shifting consumer expectations, operational strategies and increasing competition.
Market reports say that the global smart retail market size is expected to grow at a CAGR of 29.1% by 2030. Let’s understand this – research says that the retail sector in India contributes 10% of the GDP, with an estimation to reach a valuation of $2 trillion by the end of 2032. For reference, the Indian retail sector is the 11th largest economy in the world, superseding nations like Russia, South Korea, Australia, and Spain, among others. It’s not difficult to sense the data energy of this industry, at least not from a lay-of-the-land view. What may be difficult to fathom is just how deep the complexity runs among all this.
So, we’ll say this one more time – The retail industry is a complex ecosystem characterized by a complex web of interconnected systems that generate a massive influx of data every second. This data deluge presents both opportunities and challenges for retailers. While data holds immense potential to drive growth and improve efficiency, retailers have to outmanoeuvre the hurdles. For instance, discrepancies between inventory levels recorded in the POS system and those in the warehouse can lead to stockouts and lost sales. Similarly, inaccurate customer data can result in ineffective marketing campaigns and diminished customer satisfaction. A recent McKinsey study revealed that retailers struggling with data integration incur operational costs 20% higher than their counterparts. Clearly, suboptimal data is best avoided.
iPaaS: A Conduit for Operational Excellence
By providing a centralized platform for integrating disparate systems, iPaaS transforms raw data into actionable insights. Consider inventory management. Real-time visibility into stock levels is key. An iPaaS solution can seamlessly integrate data from warehouses, stores, and suppliers, enabling retailers to optimize inventory levels, prevent stockouts, and reduce carrying costs. Again, in customer experience, iPaaS can unify customer data from various touchpoints, creating a 360-degree view of the customer and using it to fulfil the demand for hyper-personalized customer experience, increase customer lifetime value, and foster loyalty. We have seen, firsthand, how Aekyam users overcame data silos, improved data quality, and streamlined their business processes.
When discussing the benefits of iPaaS in the retail industry, it’s crucial to go beyond general statements and provide concrete evidence of its impact. Because the advantages extend far beyond operational efficiency. This is where quantifying the impact on key metrics becomes essential. What are the key metrics? Think sales, inventory turnover, customer experience, operational efficiency, return on investment (ROI).
The Gap Between Retail Needs an iPaaS Solution
While iPaaS has brought immense benefits, some gaps exist between the evolving needs of retailers and the capabilities of most of the current iPaaS platforms. The needs of modern Retailers are dynamic and evolving. They require instant access to accurate and up-to-date data across all channels to make informed decisions and deliver tailored experiences to individual customers. They need supply chain resilience by building a robust and adaptable system to mitigate risks and disruptions. Consumers expect nothing short of an uber smooth experience across all touchpoints which is possible only through an omnichannel consistency. They are sensitive about data privacy and security so it is the responsibility of retailers to protect sensitive customer data while complying with regulations.
Current iPaaS solutions offer data integration, improved data quality, workflow automation, API management and scalability. But there are gaps that most solutions haven’t filled, such as:
- Real-time analytics: While iPaaS can integrate data, advanced analytics capabilities are often limited.
- Predictive modelling: Many iPaaS platforms lack robust tools for forecasting and predicting future trends.
- Artificial intelligence (AI) integration: Limited integration with AI-powered applications for tasks like image recognition and natural language processing.
- Hyper-personalization: Although iPaaS can integrate customer data, advanced personalization capabilities are often required.
- Supply chain visibility: While iPaaS can integrate supply chain data, real-time visibility and predictive analytics are still emerging features.
Based on our experience of working closely with Retailers, we believe that what they further need are enhanced analytics capabilities or advanced analytics tools to derive actionable insights from integrated data. There has to be a deeper integration with AI platforms to enable predictive modelling, automation, and intelligent decision-making. While there are real time data processing capabilities, there is a definite need for higher data processing speeds to support real-time decision-making. There is much talk about low-code/no-code development but less in practice. A true low code/no code solutions must allow users to create integrations without technical expertise. And lastly, there has to be more cybersecurity enhancements because strengthening data protection measures can address evolving threats.
Case in Point: The Rise of Omnichannel Retail
Omnichannel retail is the new frontier and Aekyam has proven itself as the linchpin for this transformation. By integrating online and offline channels, Aekyam has supported retailers to offer unified product catalogues, inventory visibility, and order management. Here are a few cases where Aekyam demonstrated its effectiveness and reliability.
Case Study 1: Apparel Retailer
A leading Indian manufacturer of luxury accessories with a formidable global footprint was grappling with inventory discrepancies between its online and physical stores. This led to stockouts, lost sales, and frustrated customers. By implementing Aekyam, the retailer achieved real-time inventory synchronization, enabling the client to transform itself from a Luxury Brand into a Premier Marketplace Seller with 0 order drops.
Case Study 2: Fashion Brand
A prominent Singaporean fashion brand renowned for its versatile and cutting-edge designs in footwear, needed a single order management system and integration platform to connect applications across different regions while following regional regulations. Through Aekyam, they integrated data from suppliers, distribution centres, and stores, helping the client break down geographical barriers with a reduction in the integration effort by 70%.
The Road Ahead
The future of retail is inextricably linked to data. As technology evolves, so too will the role of iPaaS. We can anticipate advancements in artificial intelligence and machine learning to enhance data analysis and prediction capabilities. It is impossible to wrap up without mentioning that the increasing focus on AI will gain further momentum because it addresses several challenges such as labour costs, quicker responses, optimized product assortments and faster development of applications and data solutions. The integration of machine learning and the Internet of Things (IoT) will redefine retail operations. iPaaS will be instrumental in connecting these technologies and extracting valuable insights from the data they generate. For instance, AI-powered demand forecasting can be integrated with inventory management systems to optimize stock levels and reduce waste. As consumers expect seamless experiences across different channels, iPaaS will be essential in creating a unified view of the customer. It will help retailers optimize logistics, reduce costs, and improve delivery times by integrating data from suppliers, warehouses, and transportation providers. With growing concerns about data privacy and security, iPaaS platforms must adhere to stringent regulations. Retailers should prioritize iPaaS solutions that offer robust security features and compliance capabilities.
We believe that iPaaS in retail will require ongoing innovation and collaboration between retailers and iPaaS providers. As technology continues to advance, we can expect to see even more sophisticated solutions that address the evolving needs of the industry. Retailers who embrace iPaaS will have a competitive edge because they will build a resilient, customer-centric organization capable of outperforming competitors.
The journey towards data-driven excellence begins with a single step. Is your organization ready to take that step?
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