The retail world is fast changing. Australian customers no longer spend long hours at the shops examining goods before purchasing. Today’s savvy customers are embracing the Web and their smart devices to explore, compare, purchase and critique everything from the latest fashions to groceries and home appliances.
With the fast pace of advances in technology, the day when consumers use their webcam to simulate the in-store experience, receive individually customised promotions or even design their own products for retailers to stock is not that far away.
|David Bowie, SAS|
Declining brand loyalty, the urge to save in a tough economic climate and the rampant use of new channels to purchase products, are pushing the boundaries for retailers and forcing them to rethink their existing strategies and brand management practices. Future retail success in this environment will depend on four critical success factors.
1. Rethink growth strategy
As more people shop online, retailers need to shift their focus from same-store sales that yield little to ‘same shopper sales’ and reach cross-channel customers with a more tailored approach. Retailers must clearly demonstrate value and offer current products, reflecting local demographics and tastes.
2. Accelerate brand strategy
With a growing trend in private label and exclusive products, retailers have greater control over their brands and are able to differentiate themselves, while enjoying higher margins. Growth and profits will eventually depend on increasing shopper frequency and offering a wide product range through multiple channels at the right time.
3. Keep a focus on the customer
Retailers can enable multi-channel browsing to aid customers’ buying decision by having a unified strategy for social media and mobile devices. To stay current, retailers need to be present in the channels that consumers patronise, listen to and engage them where they are most receptive, and provide them with personalised pricing and promotions.
4. Implement analytics infrastructure
Retailers capture large volumes of data within the enterprise and from other channel sources and this data has grown exponentially. Consumers are sharing more data as well – preferences, opinions, tastes and current location. Using customer, merchandise and operational analytics businesses can access timely, relevant and useful decision making data across all customer channels. Retailers that analyse this data to better understand, engage and react to customer needs will win the battle in the marketplace.
Businesses must remember that each of these factors needs to be aligned with strategic goals. It is relatively easy to establish a social media channel to communicate with customers, for example, but it is a wasted effort unless it is focussed on improving customer loyalty and sales, increasing profit margins and inventory turnover, and improving cash.
David Bowie is the Sydney-based Marketing Director at SAS Australia and New Zealand. SAS is the leader in business analytics software and services, and the largest independent vendor in the business intelligence market.