The pace and complexity of managing digital retail businesses will increase over the next 12 months — and most retailers aren’t prepared. That’s just one eye-opening finding from the Incisiv report Digital Complexity: Thriving in Unpredictable Times. The research goes on to note that less than half of retailers believe they can effectively manage every aspect of their digital operations in the coming year.

“Retailers are challenged because they don’t have adequate technology to create, manage and scale content with demand,” said Neha Sampat, CEO for Contentstack, a content experience platform provider headquartered in San Francisco, Calif. “With the right tools, retailers can address the challenges detailed in the report and modernize every aspect of their business.”

Sampat and her colleague Jasmin Guthmann, Vice President and Executive Board Member, The MACH Alliance and Head of Corporate Communications for Contentstack, presented the findings of the report in their session, “Retailers Speak: New Research Unpacks the Toughest Digital Challenges of the Next 12 Months.” They spoke during Simpler Media Group’s recent virtual Digital Experience Summit (DXS, now CMSWire CONNECT), which Contentstack also sponsored.

We spoke with Sampat and Guthmann about the rising complexity in digital retail operations and how retailers can prepare themselves to keep up with the growing demand for content and personalized experiences.

What’s Driving Digital Complexity

Simpler Media Group: During your presentation, you discussed findings from the Incisiv report covering digital complexity. Would you please discuss the top key findings and why it’s important that retailers sit up and take notice of them today?  

Contentstack: The biggest takeaway from the report is that most retailers aren’t prepared to handle the increase in digital complexity coming their way over the next 12 months. For example, 67% expect the number of digital assets they have to manage will increase. That’s anything from product descriptions to content marketing. But only 32% say they’re ready to handle this increase effectively. 

In addition, the research showed that only 17% of retailers can launch a standard online marketing campaign within a week. This number drops by more than 4x when launching a new marketing campaign. 

SMG: According to the research, retail complexity is driven by three key areas: digital merchandising, shopper engagement and personalization, and store transformation. For each of these, where would you say retailers are today, and where should they strive to be? 

Contentstack: For digital merchandising, retailers reported that the number of SKUs they sell online will increase, and that they’ll need to support this growth with more digital merchandising assets and better inventory management. To do this, retailers must look to technology that will allow them to scale their content and composable architecture that enables integration between inventory systems and the rest of the e-commerce digital stack. 

A personalized shopping experience complete with content tailored to shopper needs is a base expectation for consumers. For example, consumers expect to find their favorite products (and related content) on Instagram, TikTok, the company’s website, in-app, and everywhere else they frequent. They also expect to buy those products on their preferred channel as part of a frictionless buying experience. Retailers know this, but they need the right technology to effectively manage and personalize all their digital content across their omnichannel strategy. 

As for store transformation, retailers are realizing that brand and store experiences, operations, and technology must be re-evaluated to better unify the physical and digital shopping experience. To do so, they have to prepare their operations and technology to support higher digital volume such as online purchases fulfilled in store, and a digital shopper experience including in-store apps and self-service tools. In-store technology investments will continue to increase as retailers try to find their version of a blended store experience.

Barriers to Creating Frictionless Experiences 

SMG: The report shows that less than half of retailers believe they can effectively manage their digital operations over the next 12 months. One of the areas in which they’re struggling is bringing digital and physical experiences together. Please discuss where retailers are falling short and what changes they can make to get ahead of the competition.

Contentstack: Retailers anticipate struggling with new store technology, self-service tools, online SKUs, and the number of digital assets to manage — all of which will certainly grow in the coming months. The inability to blend physical and digital experiences poses a significant business risk in the face of growing customer expectations. Retailers that are unable to improve their performance across these dimensions could lose customers to the competition. 

One thing that will help retailers is re-evaluating their existing tech stack. Pivoting to composable architectures will allow retailers to leverage tools that make digital content easier to create and scale without day-to-day IT involvement. This makes it easy to quickly build out and test new customer experiences until retailers find the combination that resonates with their audiences.

Graphic that says "DX Leaders" on the top left, "Neha Sampat & Jasmin Guthmann Contenstack" on the top right, and Neha Sampat's and Jasmin Guthmann's (right) headshots side-by-side on the. bottom half.

SMG: Per the report, retailers are concerned about the rise in the number of digital assets they’ll have to manage over the next 12 months, and only one-third believe they’ll be able to manage them well. What are the biggest challenges you see for retailers when it comes to digital assets, and how can they overcome these challenges to ensure their business remains strong today and in the future?

Contentstack: Content as we have come to understand it has only been around for a little over a decade. Everywhere consumers look, there’s a new TikTok influencer, YouTube personality, or blogger reviewing or promoting a product — and the availability of content everywhere is only growing. The biggest challenges for retailers will be keeping up with the demand for content in terms of asset creation, personalization, management, and scaling to all the channels their consumers use. 

Learning Opportunities

The biggest underlying issue retailers face is that they don’t have the right capabilities to support the demand. They can start by finding tools that allow them to adapt to the future of content. Building an agile and flexible commerce portfolio and an ecosystem of best-of-breed technology is critical to ensure retail businesses remain strong in the future.

SMG: The report notes that retailers also struggle with providing frictionless experiences across channels and personalizing digital experiences with relevant content. Can you provide an example of a customer who faced these same issues and is now seeing success? 

Contentstack: Before 2019, Dawn Foods handled all their orders in person and by telephone. The retail bakery needed an agile platform that would scale as their needs changed. They made the decision to add an online option that would give their customers access to their extensive product catalog, the ability to order with one click, and a convenient online payment portal. 

They chose Contentstack for its MACH (Microservices, API-first, Cloud-native, and Headless) driven digital infrastructure and ease of use. Since Dawn Foods adopted Contentstack, content updates on the site run 80% faster compared to publishing with a monolith CMS. Together with Contentstack, Dawn Foods empowered its marketing team to create, review and publish personalized omnichannel experiences for customers, collected extensive customer usage data, and enhanced agility to publish content changes in minutes.

How the Right Technology Investments Can Help Retailers Thrive

SMG: Accommodating changing shopper preferences is something retailers have been challenged with for years. Yet the report finds that most retailers still aren’t prepared to handle these quickly-changing preferences. Why has it been so difficult for retailers to meet these consumer expectations and why is there a higher urgency to do so now?

Contentstack: Today, there’s more to running a successful business than ensuring you’re two steps ahead of having the products consumers want and need. The pandemic, supply chain challenges, inflation, and emerging solutions are driving the need for retailers to quickly respond to change and increasing customer demand. However, the biggest challenge holding retailers back is that they’re handcuffed by slow, outdated technology. All too often, retailers are working with monolithic technologies that reinforce silos for marketing, product and IT teams. To truly meet consumer expectations, retailers must be willing to challenge the status quo and look for new opportunities, especially within their technology ecosystem.

SMG: More than half of all retailers believe their current technology platforms can’t support their business needs over the next year, states the report. Where do you see the most opportunity in terms of technology investments to help organizations navigate increasing business complexity?

Contentstack: The first step we’d suggest is to identify your biggest capability gaps and match them to their corresponding technologies. For example, if your current CMS requires too much hands-on IT work for simple marketing updates, then you know that’s a place to start. From there we recommend taking the composable approach and building your ideal stack. A composable architecture makes it easier for businesses to unlock opportunities and effectively tackle challenges.

SMG: What are the top recommendations retailers should take away from the report to help them face and surpass the rising complexity they’ll face in the upcoming months?

Contentstack: There are a few recommendations retailers should take into consideration:

  1. Evaluate, measure and benchmark how you expect your core execution capabilities to grow over the next year.
  2. Quickly address any areas in which you’ve under-invested. That especially includes customer-facing technology that prioritizes speed and agility, with a composable framework that allows your business to react quickly to a changing market. 
  3. Focus on areas you can win quickly. Consider use cases where the impact is clear, measurable and reportable. Quick wins can help clear the path and create advocates that will turn into bigger resources and investments.

Learn more at cmswire.com/connect.