To be a smart competitor, many retail businesses have realigned their investment strategies in the past 10 to 20 years. From expanding their footprint via new sites to investing aggressively in all areas of the business, retailers across the globe have made significant moves. For instance, they have introduced the new digital sales model, restructured fulfillment operations, and acquired new businesses.
Unfortunately, it has soared the cost to boost market share, and that has left retailers in a catch-22 situation because they are finding new ways to fight battles on different fronts. So where should retailers shift their focus in order to hit the right nail on the head? Those who want to strengthen the organization by creating harmony may seem best prepared for the future.
To help retailers, Deloitte—one of the Big 4 accounting organizations in the world—has charted out six strategies to navigate the treacherous waters of retail.
Transactional vs. Emotional Loyalty Programs
It’s time for retailers to look past tiered programs that focus on reward points, gifts, dollars off and traditional loyalty cards. Today, the retail industry is moving towards experience-based models. Bearing this mind, retailers must strive to build true emotional connection with their customers. Rather, solely building transactional connections.
Optimizing their loyalty programs will help create more value and enable retailers to drive customer loyalty genuinely. An ideal way to do this is by aligning your programs in the light of consumer conversations. For example, the focus of such programs is now shifting towards convenience (issue resolution and home delivery) and improving customer experience (offering limited-edition products and arranging exclusive events).
Leverage Emerging Technologies
Those days are over when the information technology strategy was limited to enterprise resource planning (ERP) systems, modernization, and architecture. Today, retailers should work out how they can harness the power of emerging technologies and integrate them into their way of doing business. The ever increasing use of technologies in the retail industry has made it pretty challenging to navigate in competitive environments.
To make the most of the next-generation technologies, retail businesses should make some substantial changes. They should consistently collect and examine large consumer data to gather valuable information. But, it requires them to transform their operation processes so they can deliver on the brand promise and get used to the new way of doing things.
Team Up with Digital Startups
The digital startups aren’t operating in the dark any longer. They are out to disrupt the traditional ways of doing business. And retail isn’t an exception. In fact, these startups are aiding the retail industry to overcome chronic issues through innovative solutions, differentiated fulfillment, personalization and authentic engagement. Consequently, a huge amount of capital is now flowing towards these retail tech startups because they are enabling businesses to compete with leading market players.
To outweigh the early gains made by these retail tech startups, traditional retailers have to step forward to blur the lines between corporate strategy and business development. To find the next big idea, they should seek guidance from specialists or adopt a scouting approach.
Supply Chain for Differentiation
The supply chain has become a new way for retail businesses to offer customers differentiated services. However, managing and making your supply chain more predictable, faster and inexpensive is not an easy feat.
As retailers gear up to face the challenging times ahead, improvements in the supply chain process can prove to be a notable growth driver. But instead of solely investing in automation or smart packaging by following your competitors’ footsteps, retailers should work to gain a competitive advantage in the long term by devising wider supply chain strategies.
Protect Consumer Data
Protecting consumer data is a must for retailers. For years, the retail industry has struggled to create and leverage data. With regulations persistently hitting the market, it’s time for them to have their privacy compliance in place.
Implementing a compliance program will also allow you to reinvent personalization and have frank conversations with your consumers. In addition, it will help drive loyalty, particularly when you are using personal identity to connect with buyers.
Take Cues from China
To gain a competitive edge, retailers in Africa and the Middle East should take cues from the Chinese retail industry and embrace trends and capabilities that can help them shape customer experiences. For instance, the modern-day tech in the US industry is yesterday’s technology in China.
Being a retailer, you can learn a lot from the established businesses in China. You can explore several untapped areas like online-to-offline, supply chain as a service, last-mile delivery, social commerce and effects of the latest public and private infrastructure.
Sources
- https://modeeffect.com/5-website-challenges-retail-stores/
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