I recently attended Wired Retail 2014, a place where retailers large and small, start-ups, consumer goods organisations, and industry experts gathered to hear about the latest innovations in the retail space, and find out what's in stock for the industry in the following year.
Retailers who do not change the way they work in the following 12-18 months face extinction in a market where simply responding to customer demand is not enough.
Over the next few posts I will share the key takeaways from the forum and give my views on how and why the retail industry is changing, and what retailers must do to survive.
In this post I will share, what I believe to be, two fundamental ways that retailers must make better use of technology.
Having a data strategy is key
For retailers more than anyone, a solid data strategy is fundamental to competing better. As well as improving targeted marketing, it can help with stock management, demand prediction, or help surface trends you might never have otherwise found. Simply responding to customer demand is not enough to remain competitive.
To use a real example, one retailer who uses their data model to the full potential found that a red dress in a product’s online preview image offers on average twice the conversion rate of a black dress. Investment in real-time predictive analytics is important for retailers to give a constantly updated set of insights that can be used uniquely to their advantage. This technology should be fundamental to how the business operates, and not a simple add-on.
The right mobile strategy removes friction for customers
Each device is a different point of a customer’s buying journey, and understanding this journey is important for creating the right experience for a retailer’s customers.
The typical device journey might start from a mobile for quick catalogue browsing, move up to a tablet to dig into more detail and options, perhaps to the physical store to view the product in person, and finally arrive at a desktop browser to buy online with a discount code or cashback tracking for the best deal.
Consumer’s trade up for bigger screens the closer they are to buying – tablets have twice the conversion rate to mobiles.
Retailers must understand their customers’ buying journey, and work to offer the best experience each step along the way.
A strong data strategy which decisions are drawn from, and a carefully designed mobile strategy are two approaches that retailers must ensure are part of the way they operate. In my next post, I will look at a controversial claim discussed at great length at Wired Retail: the internet is not killing the high street – the internet will be its saviour.