The New Reality of Retail
The start of every year sparks speculation around “the latest thing”, the “must-have” or the “winning formula”. As customer expectations continue to grow at an unprecedented rate, retailers need to understand which areas to focus on if they wish to keep shoppers loyal.
Consumers are only going to get more discerning. A majority of shoppers (57 per cent) are already demanding more click-and-collect services and many (48 per cent) want same day delivery. Unfortunately there is no magical formula to meeting these expectations. Retailers must invest their resources in the right areas if they wish to keep up with consumer momentum, and not be left by the wayside.
Below are five areas that retailers could strengthen in their mission to impress the consumer, and drive revenue.
1. Empower the retail assistant
Customers use all available sales channels to buy products and expect continuity of service and information across them. However, as soon as there is a problem, expect them to head to a store to discuss it in person. Retail assistants can make the difference between a reassured customer or a truly dissatisfied one, and a loss of a sale. Once back-end systems are connected it’s actually not that difficult to provide visibility of inventory beyond the storeroom or insight into the customer’s buying history to those on the shop floor. Every customer interaction must be seen as an opportunity to provide informed customer service, up or cross sell and build loyalty.
2. Importance of creating a virtualised single stock pool
False ‘out of stock’ notifications are the thorn in the side to retailers looking for sales. Orders must be fulfilled from any inventory source whatever its location, but 40 per cent of retailers still have inventory silos. The entire lifecycle of a product must be transparent and visible, whether it’s in the warehouse, on a lorry, in a stock room or on a store shelf. A single inventory pool combined with a customer order management system allows stores, warehouses, logistics services providers and manufacturing suppliers to work closely together to get products to customers in the most convenient and cost effective way.
3. Reduce wastage on returns
Managing the returns process is possibly the trickiest aspect of retail but also one of the biggest determinants of profitability. Many saleable goods sit in the reverse supply chain, invisible to the rest of the business and unavailable to the customer. The reverse supply chain must be enveloped in the same order management system and single inventory pool. After all, availability leads to sales and more sales at full price leads to more profit!
4. Embracing Millennial-driven innovation
The fundamentals of being a successful retailer revolve around knowing exactly what your customer wants. This will never change. Success in 2015 is for those that embrace the on-going commerce revolution and cater to the digitally enabled lifestyles of Millennials. Retailers need to be prepared – with a modern, flexible and constantly evolving technological capability. Whether it is for real-time data analysis, adoption of clienteling solutions, opening more concept stores or welcoming new delivery and drop-off capabilities; retailers must be proactive not reactive when it comes to embracing innovation.
5. Putting a face on every order
The old adage, ‘the customer knows best’, is as relevant now as it ever was. Retailers that forget this, do so at their peril. As customers become more tech-savvy and are better informed, the retailer has no-where to hide. Retailers will need to perform in new channels, offer more options on delivery and returns, and be held accountable for their customer service and communication.
A winning strategy for 2015 must be an all-encompassing mixture of back-end investment to ensure a visible, single pool of stock, and a proactive approach to new channels, customers and innovation on the shop floor. If retailers are to meet customer expectations they must start to deliver on every aspect of the shopping experience. If not, customers will be quick to look elsewhere.