By Kevin Connor, director of product strategy, Retail Pro International.
The tongue-in-cheek phrase 'first-world problems' was coined to describe an issue that people in the 'first-world' take for granted. This certainly strikes a chord in this era of increased customer expectation and the failure of many companies to keep up.
Though this is often a phrase used in jest, failing to meet these demands could bring big problems to retailers. 'First world problems' facing the contemporary consumer include the accuracy of stock information (or lack thereof), 'click & collect' options and their regular failures, or delivery limitations such as inconvenient lead time or high prices. Francis Bacon famously remarked 'knowledge is power'; and now that the customer has the knowledge, they have the power.
Consumers are more aware of the options available to them than ever before – smartphones and tablets have equipped them with huge amounts of data at their fingertips, and they can play one retailer off against another from their sofa in a matter of minutes. They can quickly evaluate price, availability, and the available promotions and add their own personal judgements into the mix. For example, previous experiences with the retailer will come into play for many customers; whether it's personal, or from searching social media for feedback on their shortlisted retailers.
Omnichannel: Don't miss the boat
As a result consumers can easily head elsewhere if they are unhappy with a retailer's service. It is business-critical for retailers to adopt omnichannel solutions, or else they run the risk of falling behind rivals, or falling out of the market entirely. From the retailers' perspective omnichannel ultimately means that your customer has the flexibility to view a product, buy it, receive it, and return it in the most convenient way for them.
Companies that are ahead of the curve on this tend to find themselves at the front of the line in terms of reputation; G-Star RAW is one such example, with slick service becoming a key brand differentiator which yields financial rewards.
It is not just the customer that can make use of these banks of data, however. Over the past few years businesses have grown increasingly aware of the benefits data can bring to everyday operations, and industry analyst Gartner has even been championing the rise of the Chief Data Officer position within enterprises.
Retailers are well-placed to take advantage of the influx of information omnichannel can herald. But this won't happen unless they have an omnichannel strategy in place. Here are four areas that must be addressed:
- Data convergence: Data received from customers must be effectively consolidated. This means putting data from every customer, on every platform, in every store, into a single repository
- Omnichannel selling: Sales strategies should be built around this data. A customer should be able to seamlessly purchase an item if they have found it to be out of stock in a brick-and-mortar store
- Flexible fulfilment: Retailers should operate intelligently and adopt a think-on-your-feet approach to fulfilment. Smooth running of the supply chain, a readily-available 'click & collect' experience, and greater efficiency when shipping all contribute towards this
- Personalised customer experience: Recognising that each customer is different can be incredibly advantageous to retailers. Learning a customer's likes and dislikes allows a more holistic shopping experience and increases retention
The technology surrounding the modern retail market is becoming increasingly sophisticated and more complex by the day. We are starting to see some top retailers using Big Data and developing facial recognition and beacon systems for engagement and marketing. At the other end of the scale, some don't have a platform to deliver a unified view of all aspects of the business in order to get to build an omnichannel strategy.
It is important for retailers to be realistic - lay the foundations of data convergence, omnichannel selling and flexible fulfilment, then later turn attentions to a personalised customer experience that's fitting of the age we live in.