With changing shopping and behavioral patterns, the retail industry has to continuously adapt to stay relevant. Ashish Shevale discusses the battle of market shares between online e-commerce driven stores and the brick and mortar stores.
Retail industry always has to be quick to embrace new technology, as consumers decide the trends. With changing shopping and behavioral patterns, the industry has to continuously adapt to stay relevant.
Currently, the biggest war is between online e-commerce driven stores and the brick and mortar stores. With exponential increase in online transactions and steadily decreasing in-store customers, almost every Brick and Mortar store is asking the same question: how to beat Amazon?
This one question is brought up in almost each NRF (National Retail Federation) event too – from 2014 till today – and is still relevant.
The Challenges of the Retail Industry
- The savvy consumer: Most brick and mortar retailers – big or small – have had to create a digital store to attract the Internet savvy consumers. Latest trends show that 1 in 3 consumers do their research online before any purchase. In fact, most consumers compare prices while shopping in a store!
- Lack of experienced salespeople: When customers visit a retail store, they expect to interact with experienced and informed salespeople who can answer their queries satisfactorily. If they do not get the service they desire, they start looking at different options. However, sales employee turnover is something that has always plagued the industry. Training and retaining good salespeople is now more important than ever.
- The quick-moving social trends: Customers are increasingly exposed to various social media channels, apart from the regular media, that influences their decisions and preferences. For example, if someone’s favorite celebrity is seen wearing something on Instagram, chances are they will choose that brand over others. It is not possible for a retail store to predict such quick-moving trends and stock accordingly.
Leveraging Big Data and Analytics to Drive Digital Transformation
So how can the retail industry leverage Big Data and Analytics to transform itself?
- Personalization: As per KPMG2017 Retail Survey report, millennials use social media 5 times more versus the older generation. It is their preferred mode of collecting information about trending products and choosing brands that resonate with them. With the correct data and analytics, retail stores can leverage their digital portals to build a database of customer preferences and use analytics to predict behavior based on demographic, gender, and psychographic data.For example, a 3D virtual dressing room for virtual try on in an apparel store can attract a lot of people who want to make their shopping experience fast, while getting to touch and see the clothes.
- Product Discovery: In retail, new is normal. Introducing new and improved version of products keeps the consumer engaged and sales pick up pace. The speed of introducing products has a significant impact on overall growth and profitability of a brand. A company will gain an edge in the marketplace by not only providing what the consumer demands, but by also focusing on R&D to invent new products and services. Delivering the information of new line of products is equally important; hence executing a targeted social media strategy along with PPC or other online advertisements can help them attract more customers. Once again, data analytics can help with the marketing strategy.
- After Sales Service: The biggest advantage for a retail industry is that it interacts with its direct customer regularly, during and after sales. This interaction should be leveraged and developed into a stream of regular feedback to the PLM (Product Lifecycle Management) application bringing in positive change in the retail culture. It will make the retail industry much more accessible and in tune with customers’ needs. Once the feedback is recorded, data analytics can help extract the relevant insights and help the retail companies make the right business decisions.
Retail industry has a come a long way with huge customer experience. But time has come to connect the missing dots and leverage the fast changing landscape.
Retail pharmacy space is still very little explored. With Amazon planning to enter, we might see rapid changes in the sector too.
The real question is how retailers, who have wide range of complex business models and ever-shrinking budgets, will use of power of analytics to sustain and profit in the changing retail landscape.
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