As we begin a new decade, retailers simply cannot afford to stand still – to survive they must deliver the experience that customers demand if they are going to have a successful future.
It goes without saying that 2019 was not a good year for all high street retailers. While challenging retail conditions and high business rates have played their part, there is no denying that shopping habits have changed and many retailers have simply not kept up.
One of the biggest areas of change for retail has been the usage of bricks and mortar stores. In the past, most retail stores measured success through sales made from in-person transactions. As a result, price became the key driver for retailers to attract customers and this has led to a growth in big sale events such as Black Friday and Cyber Monday. However, while these events may have delivered some short-term gains, for many it also signalled the start of the race to the bottom. With some retailers focusing on offering products as cheaply as possible, the long-term health of many businesses was severely jeopardised. Research has also shown that sale events have even been seen to devalue products and brands in the minds of consumers, the knock-on effect of this is that consumers become less likely to shop during non-discounted periods.
To break this cycle, retailers need to look at how they can improve the customer experience. Indeed, research clearly shows that if retailers are to survive over the next 10 years then they will need to focus on customer experience. With customers shifting their shopping habits and buying more and more products online, retailers need to ensure their customer experience matches these habits.
Omni-channel is the answer
The best way to meet customer expectations is with an omni-channel approach. The main advantage that omni-channel offers retailers is that it allows the data from both instore and online channels to be combined. This creates one complete view of a customer that can then be used to create and build the retail experience around them. For example, by using transactional data, retailers can understand which products customers buy, how often they buy them and which channels they use. These insights are then used to create the personalised retail experience that consumers are looking for.
However, while many retailers might feel that they already offer an omni-channel approach, the reality is often very different. For example, some have done well in promoting and encouraging shoppers to use both online and instore retail, but they have failed to connect the two together and put the customer at the centre of the experience. The result is that retailers are stuck being multi-channel, unable to benefit from the full picture of their customers that an omni-channel approach offers. To survive, retailers need to have one accurate and consistent view of each customer and not two or three merely stuck together!
Re-inventing the store
To prevent this, retailers need to re-evaluate the relationship between bricks and mortar stores and online platforms. Interestingly, leading retailers overwhelmingly reported that they expect physical stores to support online retail, with a third seeing stores as becoming showrooms and a further third expecting stores to become an online distribution hub. By combining these two uses into their omni-channel approach, retailers can make stores into a destination in their own right. This puts customers at the heart of the retail experience and it helps to strengthen the relationship between the business and consumers too.
A good example of this omni channel approach is by leading UK lifestyle clothing retailer Joules, by focusing on customer experience, the retailer has thrived at a time when many of its competitors are struggling. Simple measures such as offering a click and collect service have added additional value to its physical stores and the data that it collects on customer shopping habits can be developed into highly targeted marketing campaigns. By combining physical stores with a strong online offering, the retailer has improved the customer experience and built a stronger relationship with its customers.
Of course, 2019 was a very tough year for many retailers. However, that does not mean that the future needs to be as bleak as the media like to portray it. We firmly believe that by adopting a fully omni-channel approach which puts the customer at the very heart of the business, retailers can build the long-term relationships that consumers want and indeed demand.
To achieve this though, retailers must ensure they have one clear view of their customers. RMS are proud to offer OpSuite, one of the premier retail management solutions in the marketplace today and a firm favourite with omni channel retailers because of the suite of incredible benefits and competitive advantage that it brings.