Is retail an industry on the verge of a meltdown, or is it an industry ripe with opportunity?
The answer depends on two things:
- your stance on unified commerce and
- your willingness to innovate.
It’s a dog-eat-dog world in retail, both online and in brick & mortar stores. With consumers having more and more purchasing power and less and less loyalty, many brands are contemplating how they can adapt. Often watching from the sidelines as Walmart, Kroger, Costco and Home Depot gain market share, Amazon continues to push limits and change the retail landscape.
These giants have the resources to invest heavily in technology, upgrading legacy systems with modern commerce platforms that unify operations and customer experiences. Their digital maturity also enables them to grow faster by integrating acquisitions into their ecosystem and testing new business models across channels and touchpoints.
Let’s be realistic, most retailers don’t have anything close to those deep pockets. But not competing and not innovating to meet new retail demands, is not an option. In a recent BRP survey, CIOs agree, all they want for Christmas is a unified environment, and 85% of retailers agree that transformation is key and creating a true unified commerce environment is their top priority.
The 4 main challenges facing modern retailers
1. The reinvention of the retail store
Contrary to the picture painted in the news about the death of brick and mortar, in reality the role of the store has never been more vital!
Customers still love an in-store, physical shopping experience, but it’s tough to beat the convenience of online shopping.
The challenge is combining the physical and digital, and offering the customers a seamless experience between them – start anywhere, end anywhere shopping. That’s only possible with unified commerce.
Adding mobile experiences for shoppers and associates, making it easier and faster for customers to find what they want and get it into their hands.
In addition, retailers are rethinking how to leverage brick and mortar investments using stores as fulfillment centers, adding online pick-up counters, or replacing inventory on the floor with more interactive displays for product discovery and self-checkout.
2. Legacy systems and investing in rapidly evolving technology
Websites, mobile apps, POS systems, ecommerce platforms… most retailers have invested in some or all of these solutions over the last few years to meet evolving customer expectations. These systems were added in silos, and now there’s a bigger problem – fragmented and often redundant data, inefficient processes where employees must access multiple systems to complete tasks, inconsistent product information, multiple customer profiles, inaccurate inventory.
Without a single source to unify this commerce data and processes, it’s impossible to deliver the seamless, consistent shopping experiences customers expect. This is why many retailers are turning to unified platforms like Episerver Commerce, which provide better experiences at a lower total cost of ownership.
3. The significance and consequences of transformation on the organization
Like most businesses, retail is becoming a digital-first industry. Without an approach and commitment to digital maturity, a company risks more than losing customers, they risk losing leadership and talent.
A recent report on achieving digital maturity concluded that VPs and Directors are 15 times more likely to leave a company within a year if they it doesn’t adopt a digital environment. Similarly, almost 50% of sales staff said they’re far more likely to leave without opportunities to succeed in a digital environment.
Adopting a digital-first approach is the difference between retail leaders and laggards. Between those on the growing list of big-name brands filing for bankruptcy protection, closing stores and laying off thousands, versus those stealing their customers with digitally-empowered employees and unified data to better serve customers.
4. Disrupters in an unpredictable retail landscape
Disruption changes consumer behavior and expectations. Case in point Uber, Airbnb, Amazon and Netflix, which are becoming the norm now. Rather than trying to anticipate what comes next, the best weapon for a retailer today is being able to rapidly adapt to the consequences of disruption and continue offering their customers experiences that drive loyalty.
Loyalty runs deep. The 2017 PwC Total Retail Survey reports that 71% of customers are staunchly brand loyal, preferring to shop with their favorite brands, versus 29% who are more eager to try new products.
Customer experience, online and in stores, is the key to success. Meeting evolving expectations better than the competition is the winning recipe for any retailer. The ingredients to start with and build on are:
The future of retail is clear, resistance is futile!