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How to Rock The Future of Retail – 2020

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How to Rock The Future of Retail – 2020

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Consumers today are more ‘SoLoMo’ –Social, Local and Mobile. The article discusses about the key global trends and benchmark practices that would help retailers to build seamless consumer experience and long-term profitability in the near future (2020). Using Big-Data for predictive analytics, leveraging technology to create Omnichannel customer experience, implementing effective Supply-Chain, using prompt methods payments, enforcing efficient employee training and other success factors mentioned in the article, will definitely shape the future of a successful retailers to manage the complexity and diversity of retailing in 2020. All topics covered all supported with concrete examples of worldwide benchmark in the industry.

Consumers today are more ‘SoLoMo’ –Social, Local and Mobile. The article discusses about the key global trends and benchmark practices that would help retailers to build seamless consumer experience and long-term profitability in the near future (2020). Using Big-Data for predictive analytics, leveraging technology to create Omnichannel customer experience, implementing effective Supply-Chain, using prompt methods payments, enforcing efficient employee training and other success factors mentioned in the article, will definitely shape the future of a successful retailers to manage the complexity and diversity of retailing in 2020. All topics covered all supported with concrete examples of worldwide benchmark in the industry.

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How to Rock The Future of Retail – 2020

  1. 1. HOW TO ROCK THE FUTURE OF RETAIL – 2020 Omnichannel Customer Experience | Big Data | Supply Chain | Digital Technology The future of retail isn’t what you think! Consumers today are more ‘SoLoMo’ – Social, Local and Mobile. Globally, there is a shift of multichannel retailing to ‘Omnichannel Retailing’, which describes a channel- agnostic view of how consumers-experience impacts the retail brand. Shoppers expect retailers to deliver a seamless brand experience online, in-store and across multichannel media, both consistently and continuously. This article would discuss some of the key global trends and benchmark practices that would help retailers to build seamless consumer experience and long-term profitability in the near future (2020). Brands today are controlling, enabling and contributing in online discussions. Social media assists consumer’s choices and even perceptions. Retailers very soon would try to empower purchases as soon as a potential customer shows interest, with ‘one-click’ transactions to convert browsers to shoppers straight from social platforms. For example Amazon Dash is an excellent benchmark for ‘Buy Now with One Click’. There is a clear shift from ‘Push Marketing’ to ‘Client Marketing’. While doing an extensive research on my assignment at IESEG, I was inspired to write this article and share my findings in form of a concrete article. Having seen the dynamic change in marketing; now, lets understand ‘How an rock the future of retail-2020’. 1) BIG DATA - In the past retailers focused to get consumers to love your brand and then make them buy the products. But in the future, the approach will be much more personalized with the help of “Big Data”. Companies would rather virtually go to consumers to sell their products using data analytics tool like
  2. 2. predictive modeling. The problem today with hypermarkets, supermarkets or any retailer is that they collect data about consumers at multiple touch-points but cannot leverage that into predicting their purchasing behavior. In comparison to the offline retailers, online retailers like Amazon.com set benchmark in predictive modeling. Amazon.com gives recommendations such as ‘Inspired by Your Wish List, “You recently viewed Items and Featured Recommendations’, “People Who Bought This Item Also Bought ” and a lot more. Most often than not, Amazon knows what you want to buy before you search for the product or sometimes even before you know it. In the years to come top retailers will use predictive ‘Big Data’ to leverage their sales and profitability. My recommendation for the same would be that before collecting data of consumers, brands should have clear objectives of “Why are you collecting each specific data?” and also have concrete processes on “How will the company use that data to fulfill their objectives?”. This would serve as a Key Performance Indicator (KPI) to evaluate success matrix.
  3. 3. 2) Omnichannel Customer Experience - The successful 2020 retailer will build a true omnichannel operation that allows consumers to interact through any channel of their preference on a 24/7 basis, anywhere and anytime. However, it is sad that none of the retailers in India (my country) are following omnichannel approach. Yet, this can be an opportunity for any existing/new retail brand to market itself in the ‘Blue Ocean’. For example, Sweden-based Company, IKEA, unveiled the new app in conjunction with the release of it 2015 catalog, which focused on bathroom and bedroom furnishings and is themed, “Where the Everyday Begins and Ends”. The app allowed users to designate items as favorites with a ‘star’ and then add those items to shopping list. This was synced to the data-warehouse of all channels through which the customer interacts with the company. The shopping list was linked to individual store locations to check-in store levels and promotions. The customer could order it online or visit the nearest store where the salesperson knows exactly what the customer wants through the ‘data-centric’ approach of the customer research out of the store. The app upgraded the promotions on loyalty programs to build an IKEA Family.
  4. 4. The IKEA Family app users had access to extended sharable content by scanning designated pages of the printed catalogue. The extended content includes an augmented reality “Place in Your Room” feature that allows users to virtually place and view products in their own homes. There is a lot more to it; features such as ‘Do-It- Yourself’ tips, stories behind IKEA products, 360-degree views to look around the whole room and a lot more. The best part is that everything is very simple to use and easy to understand. IKEA has created benchmark of Omnichannel Customer Experience in its industry. Today consumers cannot imagine a brand or a retailer without a website and social-media pages. Tomorrow (i.e. in years to come) consumers will definitely want brands to have a
  5. 5. responsive mobile application and in-store digital devices to improve their overall shopping experience. In 2020, there will be Physical Stores, Online Web-Store, Ecommerce, Mobile-Commerce, Catalogue (not to forget E- Catalogue) and Social Media. The importance of each of these channels of sales cannot be underestimated. The ‘King’ of retail would be none other that the brand which understands the right balance between the 6 channels to build customer experience and increase sales. 3) Supply Chain - When we talk about seamless omnichannel experience for customers, we have to consider the ‘Big-Daddy’ – Supply Chain. Most retailers neglect the importance of supply chain. And those who give high importance to supply chain management succeed. The benchmark for success in supply chain management is – ZARA. At Zara, speed and responsiveness are more important than cost. The company precedes about 450 million items a year for its 1770 stores in 86 countries. Incredible! To achieve this, Zara controls more of its manufacturing and supply chain than do most retailers. The omnichannel supply chain at Zara creates synergy between business and operation strategy. Zara adapts couture designs, manufactures, distributes, and retails clothes within 2 weeks of the original design first appearing on catwalks.
  6. 6. It literally symbolizes the idea of “Fast Fashion”. Inventory optimization models are put in place to help the company to determine the quantity that should be delivered to every single one of its retail stores via shipments that go out twice every week. Zara ensures that its customers are aware of the new collections and designs within 24 hours of its shipment to the stores. It creates a demand for a product much before the product reaches the store, so that potential customers start thinking about the products. No sooner that the product reaches the store, than those potential customers are clinged to make their final decision – Purchase. 4) Click and Collect - One-Stop shopping in 2020 will be more about one retail brand offering a number of options for order and fulfillment: home-delivery, store pick-up, “Gubur Taxi-Delivery”, or in-store payment (example: ‘Click-and- Collect” concept where shoppers buy online and pick up their purchases in the store). This opens up the potential of virtual inventory management for the best possible location-which is often the distribution center or vendor depot. Click- and-Collect gives an opportunity for retailers and brands for “Cross Selling” when customers come to the store to pick-up their products. Cross Selling is a marketing expression for the action of recommending related products or services to a customer who is considering buying something. For example,
  7. 7. when a customer buys a phone a retailer can cross-sell phone insurance, phone covers, accessories, and value-added services. Home Plus (Tesco subsidiary in Korea) sets a benchmark in this category. Whenever their customers come to collect preordered products from the store, Home Plus cross-sells complementary products at a lucrative deal to its customers. They help the customers navigate to the best offers using the “iBeacons technology”. This simple idea leveraged with the help of technology increases the average-basket size of the customers, footfalls, sales and profitability.
  8. 8. 5) Advanced Payment - A seamless shopping experience requires easy and speedy payments. Consumers hate waiting in long queues just to checkout for payments. The checkout process is changing with the evolution of payments and the
  9. 9. rise of the alternatives. Retailers in 2020 would focus on best practices to reduce the problems associates with purchase. Mobile technology helps to complete purchases and this technology will expand the use of self-check-out tools like scan-and-go, QR code payment, or an advanced technology like Square. Advanced payment systems allows consumers to spend more time on shopping rather that on waiting in long lanes, specially in supermarkets and during ‘Festive Sale Season’. Thus, prompt payments would increase average-basket-size of each consumer, decrease inventory for retailers and increase profitability for brands. The Benchmark in this category is Apple Pay, Starbucks On-the-Go payment, Tesco QR Code scan payment, and the Disneyland MagicBands. 6) Employee Training - Employee training is another significant aspect in retail industry. Well-trained staffs deliver better results for retailers and build effective customer experience. The owners/promoters of the brand are not the ones who reach out to the final consumers; it’s the salesperson who interacts with the customer during the purchase process. More often that not, well-designed employee training is overlooked by most retailers. Hence, brands fail to meet their objectives. Your staff should be better trained than your competition, armed with product knowledge, skills to sell effectively, understanding of in- store procedures and strategies to solve customer problems. Implementing these 4 Human Resource strategies will be a must in 2020 retail. There are ample examples on the Internet on how retailers and brands increased sales tremendously by training their employees.
  10. 10. Starbucks sets an impressive example of training module. It is compulsory for employees to attend certain number of hours of training. Employees receive certificates and badges for successful completion of training. The employee involvement is high as the sessions are designed to be interactive and feedback-oriented. Overall, these costs of employee training help the retailers indirectly, yet significantly.
  11. 11. To sum up, I’ve outlined the ‘Future of Retail’ is creating seamless Omnichannel Customer Experience with the use of the advancing technologies. Success in 2020 retail will be shaped by several factors, weaved together in the flexible, scalable, and agile model. Each of the factors above in the report has been explained with concrete examples of benchmark practices followed by some successful retail brands. Today retail in most sectors is highly fragmented (especially in developing countries). Conversely, there is the “Blue Ocean” of opportunities to be the leader-brand and increase long-term profitability. Using Big-Data for predictive analytics, leveraging technology to create Omnichannel customer experience, implementing effective Supply-Chain, using prompt methods payments, enforcing efficient employee training and other success factors mentioned in the article, will definitely shape the future of a successful retailers to manage the complexity and diversity of retailing in 2020. About the Author Saket Toshniwal is a freelance writer, entrepreneur and an expert in Ecommerce. Currently, Saket is pursuing his Masters in Digital Marketing and
  12. 12. Customer Relationship Management at the IESEG School of Management, France. References: https://www.tradegecko.com/blog/zara-supply-chain-its-secret-to-retail-success http://digital.pwc.com/if-stores-had-a-voice/ http://www.mobilecommercedaily.com/ikea-boosts-content-functionality-for- catalog-app

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