The future of the retail industry will rely on an identity-centric strategy
Over the past few years, the retail industry has experienced rapid transformation, supercharged by technologies from QR codes, through to the metaverse gaining popularity. The pandemic was a catalyst to much of this transformation, with online sales growing by up to 40% and some companies doubling online capacity in months. Consumers expect personalised and seamless digital experiences now – and customer digital identity is key to delivering on this.
People want retail experiences to be speedy and convenient, regardless of whether they are shopping on their laptop, on a smartphone or in store. Both online and off, frustrations can easily lead to abandoned shopping carts. Consumers are caring less about being able to choose from a large variety of products, and more about being able to buy right now, using whatever technology they want. Take the new TikTok shop – within one click, consumers can buy straight from a video incredibly easily, and the ads are highly personalised, relevant and targeted.
These expectations have put digital identity front and centre for retailers hoping to remove the friction that can scare customers off. Digital identity is critical for creating seamless omni-channel shopping experiences that today’s consumers value, where they can shop however, whenever and wherever they like.
Robust digital identity offers a unified view of customers
Digital experiences are now expected in-store as well as out. In 2019, Gartner predicted that by 2023, ecommerce would cease to be a differentiator for retailers – because it would be ubiquitous. Customers now expect to be able to search, find and consume products across a retailer’s ecosystem. For example, easily checking on an app if an item is in-store, if they’re able to reserve it, and where to find it. This requires investment in customer experience technology, and identity is at the heart of this. In fact, almost three-quarters of retail tech leaders are planning to spend more money on in-store technology this year, according to Gartner’s research.
If retailers are unable to create a ‘unified view’ of their customers, it will lead to dissatisfaction. Therefore, legacy, on-premise approaches to identity management have become redundant. Ensuring all the moving parts connect together requires robust digital identity, so customers don’t face friction whether shopping in-store, via an app, or a mix of both.
Customers also expect a high degree of personalisation. Delivering tailored experiences is no longer a ‘nice to have’ in retail. Customers want brands to know them and reward them for their loyalty: serving up favourite choices when logged in, and delivering personalised technology-enabled services both in-store and online. Failing to deliver on this can be fatal for retailers, with up to eight in ten customers saying that they would abandon a well-loved brand after a bad experience, according to research by PwC.
IDG’s collaborative research with Okta found that almost all IT managers recognise that identity management will be central to this digital transformation, with 91% saying that it would be a key enabler. Now, the responsibility falls to retailers to harness this opportunity by implementing the technology required to deliver the personalisation that customers desire.
Security at front and centre
Personalisation means that customers often trust retailers to protect their private data in return for convenience and more tailored services. With an increasing number of breaches hitting the headlines, retailers need to put security front and centre to protect customer data without making the experience so frustrating that customers head elsewhere. Managing digital identity is fundamental to doing this effectively.
Whilst consumers have a better understanding of the value of their data, it doesn’t mean they’re unwilling to share it. Okta’s 2022 Digital Trust report found that 64% of people would be willing to trade their personal data for benefits such as discounts on a purchase, or admission to a public venue such as a bar, restaurant or pub. Essentially, people are more inclined to exchange their data for money, goods, services or other benefits when they believe they’re getting something worthwhile in return.
Identity can also streamline supply chains and improve the way that retailers deal with their suppliers and partners, offering the businesses they work with easy access to their systems, or enabling them to deliver cloud-based IT to partners, sharing common applications. Robust digital identity strategies help to protect businesses against security breaches coming from the supply chain.
Going forward, retailers should be looking to leverage identity management and a strategic approach to identity to help them deliver stellar customer experiences. Offering frictionless and personalised journeys that the post-pandemic consumer craves, while ensuring data stays secure, will be key to both keeping customers loyal, drawing new customers in and ultimately allowing retailers to innovate and grow.
Ian Lowe is director of industry solutions EMEA at Okta
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