The retail industry is experiencing exponential disruption. With new technologies coming in and transforming the way consumers interact and feel about a brand, retailers must respond by engaging customers seamlessly across all touchpoints with dynamic supply chain and agile operations.
According to a CNNMoney report, more than 7000 stores were closed, and 662 retailers filed for bankruptcy in the US alone, in 2017. Ever since Amazon began its pervasive dominance of the online retail market, the battle has always been perceived as ‘eCommerce vs brick and mortar stores.’ And for a while, that was indeed true. However, that clear dichotomy might no longer hold, as we take a closer look at customer behaviour.
Customers’ inclination towards eCommerce and the availability of mobile phones are continually evolving their behaviour and expectations.
The answer lies in the rising phenomenon of a new retail landscape, with changing consumer behaviour, which is a blend of online and offline retail experience bringing in a whole new level of convenience for customers.
The New Retail Landscape
Every retailer has a unique business situation, challenges, resources and strengths, and advantages to the marketplace. Before understanding the universal aspect that every retailer must get right, let’s look at the changing trends in the preference of the consumer.
Modern consumers prefer to buy through channel of their choice per their convenience. A PWC Study shows that 24% of consumers regularly used mobile to shop in 2019, compared with 11% in 2014.
Early analysis from Internet Retailer show online retail sales in the U.S. crossed $517 billion in 2018, a 15.0% jump compared with 2017. The growth in retail sales in physical stores reached 3.7% last year.
This means that eCommerce now accounts for 14.3% of total retail sales when factoring out the sale of items not normally purchased online, such as fuel, automobiles and sales in restaurants. And it also means that in only a decade, the web has more than doubled its share of retail sales. Ten short years ago, eCommerce was at 5.1% of total retail purchases.
In order to achieve great results, retailers must focus on some imperatives.
- Customer convenience: Engaging them seamlessly across all touchpoints
- Customer preference: Differentiate through superior and personalized offerings with dynamic supply chain
- Agile operations: Innovate for agile operations, profitable business models and empowered employees
New technology capabilities help retailers achieve these imperatives.
Mobile and social engagement technologies allow contextual and relevant connections with consumers, employees and suppliers.
New capabilities such as machine learning, cognitive technology, and advanced analytics can decode patterns, preferences and trends that enable better and quicker marketing, increased operating efficiencies, transparent processes and agility in retail, to deliver the products and services consumers expect.
Businesses across industries, including retail, are increasingly looking to leverage cognitive technologies to innovate and position themselves for accelerated and sustainable success in the digital world.
In retail, this presents an opportunity to understand things more deeply, faster, to become more relevant to consumers and to run businesses more strategically and more efficiently.
Retail Challenges and Solutions
Despite significant investments and efforts by retailers to drive digital transformation and exceptional customer experience over the last decade, challenges continue to abound across omnichannel strategy and operations functions, such as:
- Moving away from traditional planning process to automated trading with newer technologies
- Engaging customers in real time to deliver excellent experience and consistently stand out
- Productize business and IT to improve operational efficiency
Addressing these omnichannel retail strategy and operations challenges calls for innovative use cases driven by cognitive abilities such as dynamic pricing, virtual product trial, and on the go notification.
Srijan can help retailers respond to challenges and influencing decisions.
|Retailer’s Priority||Retailer’s Efforts/Initiative||Challenges where Srijan can help|
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|Engagement & Retention||
Such challenges span both business and IT, and may have varying degrees of impact on customer experience, operational excellence, revenue growth, and cost reduction
All of this aligns perfectly with today’s business demands—to do ‘more with less’ at speed and scale, and sustain growth within the constraints of business, technology, and human capabilities.
These challenges have a direct impact on customer experience and therefore should likely be early adoption approach. These include delivering a personalized and frictionless experience, identifying factors that deliver conversion, reduce acquisition cost, break-free operations, and optimizing supply chain and fulfillment.
Solving these challenges and realizing their benefits is no longer the stuff of fiction. Consumers are already using cognitive technology enabled products and services in their daily chores.
How Srijan Can Help
These challenges and solutions are driven by the context to foresee and solve problems, simplifying and managing complexities, predicting the future, and responding to changes in real-time.
Some of the common new models to explore are:
- Virtual product try-on: AR-enabled virtual try on lets buyers experience the product look on them with just screens in front of them. Eyeglasses, lipstick, eye shadow, nail colour, jewellery, even clothes - customers can try and buy entire collections without leaving the try-on screen. That’s where the idea of ‘new retail’ comes in, bringing in a whole new level of experience for the customers by blending the digital and in-store retail experience.
- Digital price tags: Merging a brand’s online shopping app and its physical store can help offer variable pricing to customers based on their purchase intent and behaviour. As databases gather more data on buying patterns, frequently bought items or items lying in the cart for a long time can get highlighted with available offers and discounts at real time, as the customer passes by them on a store aisle. This could be helpful in inducing an on-the-spot purchase.
- Digital signage: An old marketing practice of drawing customers with interactive and engaging digital signage solutions. It can be used in a distinct way by fusing it physical shopping to create a cohesive multichannel experience. Digital signage at brick and mortar store in fact open up a myriad of new options increase sales, operational efficiency and brand awareness.
- On-the-go-notification: Similar to dynamic pricing, shoppers can receive pop-up notifications on their phones as they cross certain stores in a mall or even products within a store. This could be information on new collections, new products, deals and offers, all based on past behaviour - browsing patterns on a shopping app, time spent and aisles visited in a particular store, frequency of visits etc.
- Just-in-time-inventory stocking: While virtual product trials are one way to reduce logistics expenses, retail stores can also enable the just-in-time stocking to cut costs. So instead of having a huge stock of merchandise, they can selectively have pieces that customers have booked for an in-store trial. This could be especially applicable for merchandise like footwear, accessories, cosmetics, electronics, and apparel.
However, established supply chain processes will also need to change for retail enterprises to truly benefit from the just-in-time stocking. A combination of digital warehouse management, automated delivery scheduling, and adoption of low-volume, low-cost delivery methods will need to be incorporated into supply chain management.
The time for debating retail vs. in-store investments is over. The smart choice is to merge the two into a tightly integrated platform that offers an enhanced customer experience. Contact our experts today to get in touch.