What do retailers need to compete in today’s transformed market?
All of this means that digitally enabled interactions are twice as important today than physical interactions – and success in the new retail world is about using big-picture perspective to reshape individual customer experiences.
To achieve that perspective, retailers must be able to address four key challenges, including:
- Growth and competition: This involves building and sustaining market share in the face of intense competition for consumer wallet share at a local and global level. This also means managing omnichannel logistics to ensure a seamless customer experience.
- Complexity and cyber risk: Data collection and analytics must track fast-changing consumer buying preferences and monitor transaction data to ensure its integrity. To manage complex supply chains and counteract unrelenting cyber threats, retailers need to secure data and standardize hybrid IT controls across the entire digital ecosystem.
- Regulations and compliance: Increasingly, global retailers must monitor compliance with an expanding array of local taxes, data-privacy regulations, reporting obligations, regional consumer preferences and more.
- Innovation: Consumers not only respond to new forms of retailing and customer loyalty programmes but have come to expect it as standard. That puts the onus on retailers to personalize the buying experience by leveraging location-based data, creating dynamic omnichannel experiences, leveraging AI-based personalization and recommendation, and enabling real time intelligence at the point of sale.
Addressing these four challenges will help retailers stay in the game. Edging ahead of the competition, however, demands something more. Retailers must innovate to deliver an enriched consumer experience by co-ordinating their physical infrastructure and relationships with suppliers, warehouse operators, distributors, logistics providers and other partners.
In a world where nearly every retailer is competing with global retail giant Amazon’s successfully integrated physical-digital model, success relies on matching that company’s ability to monetize behavioural data with data-driven smart recommendations, upselling, and customer-centric experiences.
At the same time, retailers must ensure their physical and digital operations work in lockstep to ensure a seamless delivery of products. That involves leveraging the data and networks of physical stores and warehouses to optimize same-day or express shipping experiences by keeping inventory as close to the consumer as possible.
Such innovation is impossible without a comprehensive, data-driven approach to retailing. Yet the success of lean distribution models also requires investment in back-end efficiency, which is directly related to the quality of the analytics algorithms that match production and distribution with fluctuating consumer demand.
By the time a product arrives on the customer’s doorstep, the data related to its purchase, production and delivery will have transited an extensive supply chain ecosystem that will, in turn, have generated even more data – all of which is invaluable in optimizing the digital business.
Gartner has flagged seven key trends that savvy retailers are taking advantage of to reshape their processes using data, including:
- touchless interactions to improve customer engagement
- fulfilment execution, in which retailers continuously analyze and adjust their inventory, labour, and processes
- algorithmic merchandising optimization to match retail campaigns with customer demand
- association of enablement and effectiveness to support the productivity of retail staff
- collaborative ecosystems linking stakeholders for more efficient operation
- cost optimisation to reduce operational and delivery costs; and
- values-driven consumption, which recognizes consumers’ shift towards more meaningful expenditures