#1 Challenge of retailing today - It ain’t what it used to be
As I’m preparing for teaching a Retail University class in Singapore next week, I asked myself the question I always get asked: What is the #1 challenge in retail today? The answer use to be different by region. But today, retail has become a multi-channel reality worldwide. An interesting study by Gartner predicts that by 2015, 80% of retailers will fall flat in a multi-channel world. What will retailers and suppliers need to do differently worldwide in order to succeed in retail by 2015?
Consumers voted – Multi-channel is not going away
In my travels last year, I reported on how much retail has changed in all countries, even in the smallest countries like Malta. In our post, I described how pervasive the competition from e-tailers has become worldwide. In the case of Malta, consumers can often order products cheaper online from England than buying them in store at their local retailer.
Web retailing is just one retail channel catching on worldwide. Social media is alive and well, not just for connecting friends, but as another channel of commerce outside of the retail store. Indeed, some retailers have put their entire former catalogs on Facebook pages. And, if you look at mobility as a channel, consumers are aggressively using their mobile phones and tablets to shop anywhere, including in the retail store aisle.
One of your best FREE resources for retail today
Another thing I get asked often in Retail University classes is where do you get all of your information on retailing and trends? I have posted before about the number and quality of “Smartbriefs” available on a variety of retail topics and trends.
One of my current favorites is a web resource that publishes very salient articles on consumer experience in retailing is: RetailCustomerExperience.com. I would highly recommend that you subscribe, or add it to your feeds. It is a tremendous resource on retail, and as the name implies, focuses on the consumer experience. The best part is that is FREE, and it has a great archive of past articles and posts. They also have great headlines and one of them caught my eye for my post this week.
Are you 1 of the 80% that will fall flat in retail by 2015?
How can you possibly ignore that headline? And, the one that follows is just as good: 4 Ways to avoid failing at multi-channel. These headlines come from a post by Cherryh Butler. She does a great job of underscoring the crucial nature of multi-channel retailing and what it will take for retailers to succeed going forward.
Butler begins her post by quoting a Garner report. It predicts that by 2015, 80 percent of retailers will find that their solutions are falling flat. The premise of the Gartner report is that a majority of today’s retailers were founded in a store based world, and are still focused on trying to improve old-school product-centric strategies. In today’s world of online retailing worldwide, social media, and mobile shopping … it truly has become a consumer centric world, and the consumer is not going back!
According to Mim Burt, a Gartner analyst:
"It's about trying to understand more about customer behavior ... customers, now more than ever, are telling retailers how they expect them to operate all their channels — old or new. Any company looking to profit must listen.”
How to avoid failing in multi-channel retail
There are just as many challenges for suppliers as retailers in a multi-channel world. In fact, retailers are already facing the reality because they live the pressures of sales shifting across multiple channels every day. Suppliers by their nature are product centric and tend to focus on how to push and optimize features. So perhaps the single greatest piece of advice for success in a multi-channel world is to realize how consumer centric it has become!
In her post, Butler offers 4 pieces of advice for retailers and suppliers:
- Try new things
- Purge what’s not working
- Put the experience design ahead of the business design
- Get connected
I wouldn’t disagree with any of Butler’s points. But, old habits die hard, especially for #3, which requires a monumental shift in both strategy and execution.
The key shift – Focus on your Consumer’s Experience!
Based on retailing heritage, the most significant challenge for today’s retailers is point number 3 – Putting consumer experience ahead of the business model. In these pressing economic times, retailers are hard pressed to make their numbers. They will do almost anything to get the sales, including trying to compete with web only retailers on price.
In times of crises, the danger is to retreat to what you know best – and for many retailers that is product centric merchandising in stores or on an e-commerce site.
Today’s consumers shop any time and everywhere. They are just as likely to use their smartphone or tablet as their computer. And, they are using new forms of social media like Pinterest to connect products with life styles and their networks. How many of today’s retailers’ online assets work equally well on a smartphone with easy to use social connections, scan bar codes, and enable location capability?
The Bottom Line: Retail systems and metrics are geared to past business models focused on selling products in stores and on web sites. As consumers are shifting to experience across many channels, retailers and suppliers may be too slow to invest without new metrics and approaches to measure results from consumer centric retailing.
Your time to tell us, click on the link:
Who do you think is the best multi-channel retailer today?
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Sources:
- Retail Customer Experience: Are you 1 of the 80 percent? 4 ways to avoid failing at multi-channel, January 23, 2012
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