Retail & Trade
Challenges for the 21st Century
Business conditions for retailers and traders have never been this competitive. Substantial growth, or even just survival, in some highly competitive areas will not come about by running businesses the same way they were run a few years ago.
Margins are being squeezed, customers are more knowledgeable, and customer retention and loyalty is harder than ever – customers have increasingly more choices of who to buy from and many more channels through which to buy. Add to that increased operational costs (increasing cost of goods sold), longer supply chains, shrinking demand cycles, and decision making that needs to be done much faster and more proactively; and on top of all that, the current environment and sustainability issues are now starting to influence where shoppers pledge their allegiance – with all the major retailers doing their bit, such as opening new eco and energy efficient stores, M&S ambitiously declaring their aim to be the world’s most sustainable retailer by 2015, and the Wal-Mart sustainability index, which will ultimately affect all products sold and influence the whole supply chain.
It’s clear, then, that brand new retail standards are being created for the 21st Century.
So what will it take to be a leader?
The target for any retailer/trader has, firstly, to include an absolute determination that each and every customer has an excellent in-store or online experience. This means retailers must make sure that they provide the right product (the one that is more efficient, that lasts longer and performs better), at the right price for the customer, and that it is always all in stock. Get this right, and sales will increase.
Secondly, retailers must have a firm commitment to totally understand their customers. Increased understanding of customers’ needs and wants leads to increased satisfaction and loyalty, which in turn means more profitable customers.
The winning 21st Century retailer knows how to create demand through better visibility; this is far more than loading up shelves based on what was sold this time last year and much more about obtaining a deep understanding of customers in order to anticipate their future needs. Additionally, successful retailers need insight into promotional effectiveness; every piece of promotional material needs to appear exactly where and when it will be most beneficial in terms of reaching a maximum target audience.
Another aspect that retailers/traders need to address is stock; ensuring that the right levels of stock are always in the right place at the right time – a frustrated customer is very hard to win back! Furthermore, by being sophisticated with their product mix, the savvy retailer can ensure that targeted assortments meet the needs of all shopper groups, thus helping to maximise sales per shopper.
Delivering operational excellence
Today, successful leading retailers have real-time visibility to enable them to deliver operational excellence across all channels; this includes real-time visibility to their enterprises’ inventory position as well as real-time information across all orders, deliveries, products, locations, shoppers and channels. Having this constant flow of up-to-date information ensures that they:
- Understand the impact of fluctuating costs
- Make increased sales at a reduced cost of goods sold, leading to more profitable sales
- Ensure appropriate and timely fulfilment across all channels
A complete insight into customers and operations is what the leaders in retail and trade will be looking for and achieving!