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Capping IT Off

Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

Digital Transformation in Consumer Products and Retail Sector: QA Considerations

(1) Introduction and Current Scenario

With the increasingly competitive trading environment, consumer products and retail (CPR) companies are rethinking their global operating model. It is clearly understood that the right operating model leads to more cost-effective operating platforms and improved market insights, thereby upping overall competitiveness.

Today’s consumer products and retail companies operate in a very challenging economic environment, with traditional retail shops taking a backseat and a growing population of tech-savvy consumers participating in online shopping experiences. Many players in each of the categories of consumer products also face the challenge of weak consumer confidence within these consumer product companies. As such, these companies that cater to a specific category of consumer products compete with one another in order to deliver the best consumer experience possible.

To add to the above challenges, consumer products and retail companies have to deal with the difficulties of consolidation, discounting, and new channels based on digital technologies. Changing customer needs and the arrival of digital technologies have elevated this rivalry to a new level. However, pure-play ecommerce retailers have grown significantly despite this increased rivalry and most traditional brick-and-mortar retailers struggle to incorporate these obstacles in their business models.

(2) Physical vs. Online Stores: Key Trends

Physical Stores

The physical store still enjoys a major share of the market: customers like to feel a product before they buy it. This is particularly apparent with jewelry, glasses, clothes, and sports equipments. Most big retail stores bring all types of products together under one roof, making it a one-stop-shop for the customer. Currently, physical stores have staff to assist customers with their purchase. Retails stores have a PoS (Point of Sales) system that is integrated with all other systems.

Physical stores are continuously upgrading themselves to new technologies. Some examples of these new technologies include:

  • Carts fitted with a bar code scanner: all items kept in the cart are scanned for billing. This helps the customer know the total cost of each item placed in the trolley
  • Products tagged with magnetic strip bar codes: when the cart is scanned, the total bill of all items in the card appears instantly.
  • Beacons: to ease finding products in a store, a customer can download the retail store app, and be able to connect to the store’s “beacons” and get details of the best deals available.
  • Stores without cashiers: Amazon Go has come up with stores where billing clerks are not required. When the customers have the Amazon app installed on their mobile device, they can be scanned at the store’s entrance. Any product they pick up is added to the cart, just as the products they put away are removed from their cart. This is done using video cameras and sensors installed throughout the store. When they exit the store, the customer’s their account is billed for the purchased products. This reduces checkout lines and the need for cashiers.
  • 3D capturing facilities for clothing stores: clothing stores have come up with 3D capturing facilities for their customers, providing them with multiple visual clothing options for their images. This helps the customer pick out clothing without actually trying on the outfit. This approach can also apply to eyewear. 
  • Smart Shelves: these indicate inventory level and can and instantly update of product prices on display.

Online Stores

Easy access to the internet through multiple channels has made customers opt to buy products online, saving on both time and travel cost. Sellers need to have warehouses helping them to reduce the cost on rent, maintenance, and staff for a physical store. A seller also needs to focus on the user interface and logistics of their online storefront. Some of the trends related to logistics and delivery include:

  • The option to pick up items from the nearest physical store
  • Automated warehouses that reduce the human effort of moving items from shelves to containers.
  • The potential for home drone delivery
  • The possibility of driverless vehicles delivering products to your home, as drones might struggle to carry heavier products            

(3) Digital Transformation in CPR Industry

Digital transformation is being applied in the CPR industry in multiple areas including customer handling, content management, commerce management, fulfillment, and the optimization of performance across channels to ensure the seamless convergence of both physical and digital channels. The schematic below highlights the various domains that have benefitted from digital technologies applied to CPR industry.

With the advent of digital technologies, the Consumer Products and Retail landscape is rapidly transforming; customers are demanding more information, access, and options than ever before. As a result, being a shopper today is more exciting than ever. Thanks to new technologies, digital shoppers can approach the shopping process in a different way than they have in the past. Today’s customers or digital shoppers have access to an always-on, always-open shopping experience.
 

  • Omni-channel or all-channel retailing: Generally defined as providing a customer with a consistent research, shopping, purchasing, and fulfillment experience regardless of channel or channels, it is at the heart of this digital transformation. As a result, having a clear omni-channel strategy, where essential components are seamlessly integrated, grows ever more critical to the success of today’s retailers.
     
  • Multichannel Shopping: With omni-channel retail being the talk of the town and technological advancement touching on almost every section and age groups of society, the so-called digital shopper is embarking on shopping journeys that span these channels, and they expect seamless transitions. While different consumers follow different paths and utilize the channels for different reasons, they all expect the retailer to remember their interactions and channel preferences and adjust the service accordingly.

 

(4) The Customer Journey of a “Digital Shopper” in an Omni-Channel Environment



The customer shopping experience today is often a combination of both physical and online stores. A customer can look at an item in a store, buy it online, post reviews online, yet return an item to the physical store, etc. The schematic below illustrates a possible customer shopping journey:

(5) "Being Digital" — What value levers can it offer to CPR Industry

The CPR industry is more and more customer-centric, and operates with increased agility in terms of adapting to new technologies. With the key pillars of "Digital" being mobile and channels, marketing, sales, business process management, and omni-commerce, the schematic below provides some examples of digital transformation levers applied in these five areas to promote competitive advantages.

(6) Factors Considered by Digital Shoppers

A study was conducted by Capgemini to figure out the most and least important shopping criteria for digital shoppers today. The figure below outlines the study’s findings:

Options Via Digital Channels

% of consumers saying "Extremely Important/ Extremely Appealing"

The product price and availability are clearly marked

58%

Product delivery charges are clearly marked up front

55%

Have products delivered to your chosen location

54%

Easily return products that you are not satisfied with using digital channels regardless of where purchased

50%

Choose from several different return options

49%

 

Options Via Digital Channels

% of consumers saying "Extremely Important/ Extremely Appealing"

Mobile app to support in-store shopping (e.g. store map, special promotions) 

21%

Shop with your friends online - looking and selecting together, although physically apart

20%

Be identified through digital devices when entering a physical store (through your mobile devices)

20%

Create public shopper profile visible to other shoppers in retail digital channel

20%

Follow the retailer through social media

18%
 

(7) Multi- and Omni-Channel CPR: Quality Considerations

We discussed both physical stores and online stores. Digital transformation has increased the need for robust quality assurance. CPR industry applications require a number of verifications including the following:

  • Transaction Verification: verification of integration of point of sales terminal with cash registers, payment gateways, customer transaction history, and inventory
  • Verification of return and exchange of purchased items
  • Physical inventory verification
  • Verification of transactions in online store and payment gateway

Where a plethora of operating models and technologies lead to cut-throat competition between consumer products and retail companies, even the slightest blips in customer experience or unforeseen technical flaws anywhere in the operations chain could cost the companies dearly. Therefore, digital QA takes center stage in such times ensuring flawless operations and delightful consumer experience. In order to meet these objectives, organizations must align their digital QA strategies to the four strategic levers that enable seamless consumer-centric operations.

Inventory Visibility

It is vital for retailers and consumer product companies to enable systems and processes that accurately track and manage their inventory throughout their supply chain network. This information should be of high quality and certainty. Therefore, companies are adopting Electronic Product Code (EPC)-Enabled RFID to create pinpoint precision in their inventory accuracy in a more dynamic way. This brings into the picture the digital QA part, which needs to ensure that readers accurately interpret the RFID information and information is processed and utilized accurately. This data can then be distributed across the globe to numerous connected devices, where IoT testing must be carried out to ensure seamless operations.

Web-Ready Products

There is a demand for complete, accurate, and timely information about products and services that retailers and consumer product companies need to sell. There is a need to improve the quality of information available and reduce the time to market. This information is required across and in parallel to all the channels. For example, when the last item or product is shipped, this information needs to be updated in the inventory management system, which would then send a request or order to the manufacturer to ship the items to the warehouse. There, the number of items to be shipped is decided by doing a predictive analysis of customer buying behavior. Then, the information surrounding that product—that it is out of stock and will be available by a particular date—needs to be updated in all the channels.

This overall scenario opens up many QA activities that need to be carried out across each of these interfaces and the end points of these channels, such as mobile apps running on different platforms, PC-based apps, and the web interface of both of these. In order to cater to these QA requirements, we need to have omni-channel QA as well. Security testing is also a very vital aspect of QA, particularly when there are so many channels interacting with each other.

Predictive Customer Analysis

The overall success of the omni-channel model relies on customer information being collected, stored, and utilized to anticipate needs based on past customer behavior. Companies then utilize the information for targeted promotions, offers, and enhanced services for the products. This again requires a significant amount of QA to validate the analytics themselves. It also assures that the desired results at digital end-points of a shopping experience like devices, PCs and browsers are met.

Fulfillment Strategy

The goal is to provide the customer with the products they want when, where, and how they want them, all while enabling a seamless experience across channels. This necessitates end-to-end testing carried out to make the interactions between the interfaces appear seamless to the end customers. This requires that close attention be paid to the performance of each of these interfaces, both individually and together. Therefore, QA activities that validate the performance at each level need to be incorporated into the omni-channel QA strategy.

 

(8) Digital Transformation in CPR: Tests Required

There are number of tests or validations required that include functionality, adaptability, technology integration, accessibility, security, usability, ease of use, and performance. The diagram below provides testing considerations and testing types for digital applications. 

(9) Conclusion

Customers continue to reshape the CPR industry using technologies that are readily available to them, and this is changing how and where products are sold. Consumers want to experience an “always-on, always-open” shopping experience thanks to the accessibility offered by online shopping. Omni-channel fulfillment therefore requires an omni-channel QA strategy spanning all the digital channels and ensuring a pleasant end-to-end customer experience.

Authors:

Main Author: Renu Rajani, VP - Capgemini Technology Services I Ltd, renu.rajani@capgemini.com

Supporting Author: Palaniappan Subramanian, Solutioning Manager - Capgemini Technology Services I Ltd, palasubr@capgemini.com

Supporting Author: Varun Khanna, Solutioning Manager - Capgemini Technology Services I Ltd, varun.khanna@capgemini.com

 

 

About the author

Renu Rajani
1 Comment Leave a comment
Mam, Whoa! what a detailed article and it takes back me to all my work experience as a process consultant, as a customer experience, as a tester I have come across and also a online customer I could see /feel the transformation from Physical to Online shopping .

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