Retailers are often used as a barometer for what is happening in the rest of a country's economy. As such, the start of the global recession in 2008 has ushered in a new era for the industry. Given the pressure that increasingly difficult economic conditions have placed on retailers to survive, they needed to find different ways of reaching out to consumers.
The world has become much more consumer-driven, which means that retailers cannot rely on traditional mass marketing initiatives as much as in the past. They now find themselves in a position where they need to be invited into the personal space of a consumer and cannot simply force their way in.
Thanks to the Internet, people are more informed about products than in the past. Nowadays, they do comprehensive research on their smartphones or computers at home before going into a store. This often places the sales consultant at a disadvantage as customers often know more about the products than they do. More importantly, if the store does not stock what consumers want then they will get it from a competitor.
Changing the supply chain
Retailers need to become more informed about what people want. However, they should also avoid a traditional strategy of just pushing a standard range of products to all their stores across the country. This increases the likelihood of a significant number of customers not being catered for. A more pre-emptive supply chain should be put in place that is responsive to the unique customer requirements at every store.
To be able to do this, retailers need to enrich the information they have by looking at geospatial and demographic data. Once this data is overlain on existing information then interesting conclusions can be drawn around purchasing trends. Retailers will be able to have faster access to information on what products sell at specific stores and which ones need to be replaced.
Also, the connected age means the value of social networking and analytics cannot be underestimated. Retailers should identify the influencers on platforms like Facebook and Twitter to see how they interact with the brand. This becomes especially important when people follow their brands or like their pages and expect some sort of direct online engagement from them.
Innovative industry
A recent Gartner study found that retailers are more innovative by nature. This is because they have (or need to have) a connection with their customers. Retailers are also open to try different things and experiment with technology to see what works and what doesn't. This is often in stark contrast to financial services companies, which are more cautious in their approach.
Cloud computing is becoming more important as it enables retailers to use the infrastructure of others while focusing on their core business. There is also a willingness to use mobile devices as engagement points for their customers.
The next 18 months will see retailers establish a multi-channel engagement environment, develop strategies around mobile, and retire legacy systems with investments going into ones that can leverage big data.
Local market leadership
South African retailers are certainly up there with what is happening in the rest of the world. New stores have an appetite for investing in the latest technology and other innovations. The environment in the country is quite progressive and there are a few who are focusing on more agile operations and improving their supply chain. This is especially important as they are expanding or looking to expand into the rest of Africa.
Technology and utilising information more effectively play an important role in this new retail environment. The ones who will be the most successful are those who are best able to incorporate these elements into their operations.
To find out more, attend the upcoming Rethinking Retail and Franchising session hosted at Microsoft's Technology Centre in Fourways, Johannesburg on 18 September 2013 from 8.30am-10.30am. Register at: http://goo.gl/xlQb4H or contact Karabina on 011 463 8155.
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