Customers are the king and queen in retail and they are valuable to the business. On the flip-side, customers are also seeking value in what is being offered to them. Retail brands across the globe are fiercely pegged against each other in this value game, and the one who offers the best value as perceived the customer will be the clear winner.
Let’s try to understand this better. In this day and age of technology driving the industry towards innovation and disruption, there is no ambiguity anymore in the current and future roadmap for retail businesses to survive and thrive. One thing is clear, the retail brands who standout on their customer experience expectations will taste success. However it is important to understand the customer experience paradigm.
Traditionally, retail was transactional and product focused, but that is no more the case. As the focus of the business pivots on the customer, the customer experience paradigm has undergone a significant shift since the early retail days. This shift has largely been the result of technology enabling customers equipping themselves with more information and decision making power, thus putting them in the driver’s seat who are now calling the shots. Fundamentally, the customer experience is all about the value the customer perceives in two ways – i) their interactions with the retail brands, and ii) the offerings they receive from those brands in terms of products/services. Thus, it all boils down to the value the customer receives from their relationship with the retail business.
For retail brands, the best part is that now they have multiple opportunities to provide perceivable value to their customers. As retail has moved from transaction focused to being more customer centric and other factors have influenced the sector big-time, the shopping journey has evolved. Here is where retail brands can seize their opportunities to establish their value offerings. For example, while the customer is researching, a retail company can provide the necessary information that the customer seeks, even though the customer is not seeking information with the intention of purchase. Another example is where a customer can be offered an additional discount while their product is replaced due to issues in the products they had initially purchased. These are some of the many instances of how retailers can offer value – either qualitative or quantitative. These valued offerings will cement the brand-customer relationships in the long-run and thus prove to be a mutual benefit for both the retail company and the customer.
ETP Omni-channel CRM solution is integrated with the ETP Omni-channel Store Solution and it connects the business back-end operations with the supply and demand channels. This ensures the customer can peruse, pick, purchase, like, promote, review, search, seek information and provide feedback from anywhere at any time.Using the omni-channel retail CRM software, channel-based promotions can be developed, tracked and modified while capturing valuable customer feedback. It provides seamless visibility with a dedicated OMS engine to optimize customer order fulfilment. Customers are delighted with personalized offers and empowered with multiple retail channels, modes of payment and delivery options which further aid sales frequency.
ETP Omni-channel Retail CRM software integrated with the ETP Omni-channel POS solution ensures improved brand visibility, sustained engagement, easy access to products and cross/up-selling promotions to increase the revenue per customer steadily.
And yet again the festive season is here. This is arguably the best time of the year for many, as it is also considered to be the holiday season in many regions. Ultimately, this is the time of festivities, color, new beginnings, gifts, and also the best time to shop. This is the right time for retail brands to capitalize and score big to add glitter to their festive season. One important query that retailers seek to resolve is to know the right time to start the festive sales
Officially speaking there is no specific start date for retailers to begin launching their festive season sales. In fact, every year, new standards are set by different retailers, making this shopping season a dynamic one and which continues to evolve further. Having said that, deciding the start of the festive season sale should be typically based on 2 factors:
The nature of the business: The best starting point would be to look at earlier trends of the business and understand what the competition is doing as this will give retail owners a benchmark. Then applying those learnings to their business will help them in taking the right steps towards launching the campaign. Also, it is very important to consider business objectives and align efforts accordingly because the business’ long term goal should be.
The market the business serves: It is important to understand and sense the market trends and the sentiments of the consumers. Various factors such as season, geography, ethnicity, and others, largely influence the target markets’ shopping behavior.
A good example of considering the above to factors for starting the sale is a scenario where a retail business deals with selling products that are generally perceived to be of high value and exclusive, with a limited stock. In that case it would be better to start closer to the festival as the bonuses come in and thus there may be demand for high range products then due to the increase in purchasing power.
Taking into account the nature of the business and its market will really help retailers make the right decisions towards launching their festive season sales.
The retail industry has evolved over the past few decades and the customers have now become the prime focus. With the advent of omni-channel retailing, the entire ball-game for businesses has been about getting to the customer wherever they are and whenever they are available. This has driven the necessity of creating and offering shopping experiences that can have a positive and long-lasting impact on the customers so that they do not move away from the brand.
The essential advantage of having a brick and mortar retail store is to introduce the products to customer in the context of an allowing them to experience the products and related services and then build on that experience and relationship in person so that it stays with them. This will then foster loyalty and repeat business while also turning these loyal customers into brand ambassadors for the business. Having a retail store is an opportunity for retailers to allow customers experience tangibility of the products and the services as well as leverage the human touch factor by having store associates to engage with the customers directly for assistance and promoting sales. It is a matter of fact that people influence people and this is one major click that retailers can achieve to connect with their customers and build long standing relationships.
One more aspect of retail stores is when the store is not just used to display products and increase sales, rather it is about leveraging the physical space to create moments and memories that go beyond just selling. For example, in the apparel retail business, having trial rooms have always been a big booster for the business as customers prefer to try out stuff before actually going ahead and buying. So also, other retail verticals like bookstores can provide space for reading and collaborating, or furniture stores can demonstrate some DIY techniques, and so on and so forth.
Thirdly, it would not be an understatement to say that retail stores are the best place for the customer to interact directly with the brand, be it touching or trying out tangible aspects of the brands like products or even coming face-to-face with the human aspect of the brand while engaging with store associates who with the right kind of training can definitely be brand custodians. It is at the brick-and-mortar store that experiential retail can be really demonstrated and experienced.
Thus in this new age of retail, brands that continue with the old line of thinking where the idea is to optimize the floor space purely for sales purposes will definitely see their business plummet. Changing the approach by working on re-purposing every square foot of the space to build that kind of a retail experience that will truly resonate with the customers.
Luxury products have always been one of the most admired and sought after products. So much so, that consumers of such products take pride in their possessions and are often considered to be of a higher class. They and their products are the ‘talk of the town’ most of the times in social gatherings and people like to be associated with such class conscious, brand loving and luxury seeking consumers. Luxury products therefore had few options and demanded a high cost of purchase deliberately tailored to a select set of consumers.
But now times have changed thanks to rapidly changing consumer mindsets and the very idea of “luxury” is evolving. The old-fashioned ideas that defined luxury as aspirational, high status, exclusive, wealthy, don’t really paint the exact picture of what customers perceive about luxury products. One of the drastic changes over the recent years is that the new age luxury isn’t for showoff. Similarly other values that luxury brands exclusively attributed to, such as better quality and style, precise workmanship and great designs, are not exclusive any more to luxury.
Consumers’ tastes are evolving. There is an indisputable appeal for new products and services along with more choice of options yet having the flavor of uniqueness and exclusivity. This has given rise a various breeds of brands such as specialized ones and those that are highly customized to customer demands, thus increasing competition.
Further, along with changing tastes, customer shopping patterns and buying behavior have undergone a tremendous transformation. Traditionally, luxury shoppers heavily relied on physical retail to fulfill their desire for luxury goods. But now, multiple channels have come into the game and customers willingly switch between channels to get what they want. Seamless demand fulfillment across channels necessitates the reduction of various issues such as decrease in quality or other losses that are caused during the course of the supply chain. While older shoppers are still playing a significant role in the luxury market spends, millennials and Gen Zs are predicted to account for the larger growth in the coming years. Moreover, their new spending habits which are faster, more frequent, brand-conscious and trend-driven while being highly influenced by digital platforms.
All these are the modern day challenges that luxury retail businesses, especially the ones still depending heavily on the heritage and traditional processes are facing and there is one way out. They need to transform their retail businesses to omni-channel and employ the right omni channel retail software to exceed their customer expectations and fulfill their business goals.
Traditionally, the retail industry has been focused on selling products that have been produced and in order to be able to sell those products, it was necessary for retail marketers to follow the principles of the AIDA model. In other words, they had to draw attention of consumers towards new products in the market and spike their interest in those products by various methods. Their very next move was to cultivate that interest into a desire for the product and then drive consumers towards taking an action, in most cases, purchasing the product and thus completing the sale for the business.
Times have changed and the traditional model of retail has undergone a massive disruption where the focus has moved from selling to understanding and then fulfilling the needs of the customer. The retail industry of today has the customer in the driver’s seat, and for retailers it is all about getting to know the customers’ desire better and create products and services that are able to satisfy those needs. Having said that, the basic principles of marketing in retail – attention, interest, desire and action, still hold good but the context of application of these principles may have changed since the modern day customers are mostly aware and attuned to what they want and generally from where they are going to purchase their products or receive the service(s) they seek.
While the retail industry has treaded this journey from a traditional being to what we call as omni-channel retail in the modern day world, there is one factor that principally, still has a formidable impact on the success of any retail business. And that is ‘location’. Let’s deep dive into this conundrum.
Again going back to the past, while the retail market was product/service oriented, the essentiality of getting these to be noticed by customers compelled retailers to look for the best location to station their offerings, generally a busy place where prospective customers usually frequented. And this importance on the physical location is still a foothold for most retail brands who are running their brick-and-mortar stores. Because, in spite of the rise of e-commerce and mobile commerce, most consumers still prefer to shop at stores and many stats have proven this fact.
Now that’s just one aspect in the context of the location where in the physical location plays an essential part in the success of the retail business. Today, retail is about omni-channel and about unified commerce, and the customer is at the epicenter of the business. The rat race to win the customer is on and the location factor plays an important role to win this race. However, here is where the other aspect in the context of the location comes handy. Taking some cues from the past, getting the products/services to where the customers are is still the right thing to do. But with the advent of the internet and mobile devices and social media, the customer has now become the location as he/she is all over. So today, it is not only about the physical presence, but also the virtual or online presence of the retail brands and moreover, the presence in the right places and channels that’s what is extremely critical. Getting the right product at the right time at the right price is necessary but also at the right place is more than half the battle won. The remaining bit is getting the right message/communication across at the right time and through the right channels or mediums to the customer will enable retailers to have maximum impact and stand out from the rest, to seal the deal with their end customers.
In this day and age of omni-channel, retail is all about the customer. What the customer needs and demands, how do they research and shop, which channels do they use to interact, what is their opinion about brands and products, what are their interests and preferences, which demographic segment do they belong to, what influences their purchasing, and so on – these are the questions retailers need to seek answers to, so that they are able to understand and serve their customers better. Additionally, since consumer behavior is dynamic and so is the retail business, the same answers may not hold true every time. Thus there is a need for the retail companies to put in constant efforts so as to be able to keep pace with their consumers’ changing demands.
In order to be able to service their customers to the best of their abilities, retail brands must have a holistic approach in strategizing, conceptualizing, creating and offering experiences that can impress their customers. As such, the shopping experiences must be positive and enriching. There are 4 essential pillars of retail customer experience – personal, mobile, seamless and secure, that retailers need to focus on for optimal results.
Below is an infographic that illuminates the importance of these 4 pillars with some industry statistics that retailers need to pay attention to.
In the modern day scenario, while there are numerous elements that play a role in the success of a retail business, the most essential element is to be responsive to customer demand and meet customer expectations. However this seems to be a challenging ask in today’s digital era as the consumer behavior and expectations are highly dynamic and constantly evolving. For the consumers of today, shopping is no longer just wanting to purchase products — they also demand entertaining, convenient and personalized shopping experiences. Add to this the complexity of handling multiple channels where customers can connect with the brand or shop from.
Omni-channel retailinghas gained popularity over the years and now it has become the new norm and necessity for retail business to thrive and flourish. Be it brick and mortar retail companies or e-commerce companies – most have realized the dire need to go omni-channel and are thus adding new channels to their operations so as to facilitate their business with the opportunity to be where the customer is. However, one of the biggest roadblock for retailers achieving success in omni-channel is focusing on the channels and not on the customer. Retailers must understand that very essence of omni-channel lies in delivering a seamless customer experience across channels and hence it is imperative to focus on customer centricity. Here’s how:
Understanding and meeting customer expectations
Considering the shopping habits of today’s shopper it is clear that consumers themselves have dramatically changed. Technology such as the internet and social media have significantly expanded their horizons enabling them to consume more information, find a wide range of products and share about their experiences. Emphasis is on curated offerings that customers seek along with personalized product recommendations. Retail companies can find success by realizing, considering and understanding consumers’ shopping preferences and then using retail technology solutionsto provide more personalized experiences. In order to continue meeting the demands of evolving consumer expectations, it is very important for retail owners to follow the shopper journey and then orchestrate information, pricing, inventory and promotions as the consumer moves through to the path to purchase.
Encouraging and enhancing consumer engagement
It is not just about delivering a personalized and seamless omni-channel experience, rather it is about being able to do it consistently. This is what retailers should seek to achieve in order to be able to stay in the game. It is important for the retailer to understand that each and every part of the shopping journey is important. Therefore they must not only focus on the purchase but also aspects like information gathering, opinion seeking, post-sales services, promotions and so on as the customer moves along their shopping journey. Importantly, the retail brand must be able to stay connected with the customer across the entire journey span, transcending multiple channels. Moreover the brand should seek to enhance their relationship with customer through constant engagement that is personalized and relevant to them. Retail business’ success lies in not only realizing that whether the customer purchases or not, every touch-point across the customer journey there is an opportunity for the retail company to meet its customer but also must be seized by the retailer and efforts should be taken to keep the customer positively engaged. With the right retail software, this is definitely possible to achieve.
Creating and enriching customer experience
As mentioned above, retail is no longer about just the transaction between the retailer and customer. It is way deeper than that and retailers must go beyond their usual practices to reach that depth. As the modern day consumers are evolving dynamically, they are not just seeking to satisfy their material wants by purchasing products; they are craving experiences – experiences that will leave an impact on them and want them to come back and stay loyal to the brand. From the customers’ perspective, it is easier for them to stick with a retail brand that stands true to their expectations. Retailers must constantly look to create and deliver enriched omni-channel shopping experiences as well as ensure that these experiences are seamlessly unified and are specially curated for the customer. By creating these personalized shopping experiences across the customer journey, retailers will able to address the needs of their consumers on their own turf – eventually moving from shopping carts to the consumers’ hearts thus leading to sales, positive experiences and brand advocacy. The right mix of retail technology and innovation will make it possible for retailers to achieve success.
Changing customer expectations, the advent of multiple channels of shopping and the infusion of technology in retail have given rise to a new breed of shoppers today commonly known as ‘omni-channel shoppers’. These modern-day retail shoppers are tech-savvy and highly demanding, spoilt for choice, and seek value for their money. And they will not want to associate with single-channel retail brands as they constantly look for convenience and speed. So not only brick and mortar retail companies but online only e-commerce retail brands also have no choice but to migrate to omni-channel. However, with e-commerce companies going for an omni-channel approach that integrates both offline and online retail, there are some challenges that these retailers need to be ready for.
Online-offline integration:
There are basically, two main channels for retail – online (which includes e-commerce, mobile, and social media) and offline (which includes brick and mortar store, pop up stores). While integrating the online channels to work seamlessly would seem to be achievable due to the similar nature of functionality, adding offline to this mix and looking to achieve a seamless integration can prove to be a daunting task as this calls for necessarily aligning every process and operation of the business to meet the omni-channel objective of unified customer experience. However, the good news is, that by employing the right omni-channel for e-commerce software, retailers can achieve a seamless transition from a single channel and holistic omni-channel integration.
Customer and inventory management:
Online retailers generally provide the ‘buy online and ship to home’ fulfillment. However, when looking to go completely omni-channel from e-commerce, there are new fulfillment options that can be added such as buy online pick up in store, endless aisle, and so on. This calls for a seamless and accurate flow of customer and inventory information across all channels. Having a unified view of the inventory and a single view of the customer across channels is necessary to handle multiple fulfillment options as well as planning and executing promotion campaigns and loyalty programs for customers across channels. Having a solid omni-channel retail software with CRM, promotions and inventory management capabilities can allow retailers to offer a unified omni channel customer experience.
Supply chain and logistics management:
Moving from e-commerce to omni-channel though has benefits, it also poses multiple supply chain and logistics challenges. One of the biggest challenges for retailers while implementing an omnichannel process is ensuring product availability at the right channel at the right time and at the right price. This is necessary for handling different engulfment options so that customers can get the gratification of their purchases as per their terms. Another challenge that is a necessity in this omni-channel age is reducing delivery time-frames. This again can be tackled by having the right product at the right place so that fulfillment centers are not too far away from the customers’ preferences of where they want to receive their purchases. With the help of a robust omni-channel retail solution encompassing supply chain management can ensure retailers succeed in their omni-channel business.
While strong sales are the backbone of any retail business, its inventory management process can signify the difference between success and failure for the business. Inventory management can be generally perceived to be a balancing act between demand and supply rather than just a business operation. While retail as a business has been evolving over the last few decades due to the influence of technology and innovations, the processes involved in the retail business are also a part of this evolution. The inventory management process has witnessed the need for a significant upgrade, especially due to the advent of new channels of shopping leading towards omni-channel. However laying the groundwork for a successful inventory management strategy and process that matures along with the business is extremely important for the success and sustenance of the business. Below are the basic steps for setting up a solid inventory management process.
Set the key performance indicators (KPIs).
Setting, using and sticking to KPIs to manage inventory can be one of the best methods with regards to to measuring the impact of overall business operations. Every business and therefore their set of KPIs are different, but there are a few common ones that retailers must look at:
Gross Margin Return on Investment (GMROI): This analyzes the firm’s ability to turn inventory into cash above the cost of the inventory. It is an inventory profitability evaluation ratio, calculated by dividing the gross margin by the average inventory cost.
Gross Margin Return on Footage (GMROF): This is an important KPI that measures the inventory productivity that expresses the relationship between the business’ gross margin, and the area allotted to the inventory. This is critical, especially when stocking inventory at the store for selling.
Average Days to Sell Inventory (DSI): This is a measure of the time period taken by the retail company to convert inventory into sales, and this metric varies by industry. An important point to remember while using this measurement is that large-ticket items typically move slower than small-ticket items. The formula for calculating DSI is (Inventory/Cost of Sales) x 365, according to Investopedia.
Stock-Outs: This KPI represents the number of times a demand cannot be fulfilled due to the unavailability of the required inventory. This helps in obtaining a big-picture view of the effectiveness of the business in purchasing and production.
Rate of Return: This monitors and rates the percentage of orders that are returned and therefore need to be restocked. Tracking the reason for returns while monitoring this KPI is important to identify and address any trends in problems in the supply chain and thus mitigate risks of costly returns.
Specify the W’s.
Efficient product organization aids a smooth inventory management process and can help in other processes such as picking, packing and shipping products accurately and quickly. At the basic level inventory organization begins with where and what – for achieving profitability, optimizing costs and offering superior customer experiences – that is the ‘why’.
Where: Evaluating the storage space available and creating zones, including number of doors/docks, recording their size and location, and non-inventory storage space; within these zones, determining sections, labelling each zone section clearly for employees to see and easily navigate.
What: Accurately labelling each product to avoid confusion and time in finding what customers ordered.
Choose the right software.
As the business grows, it is necessary to have an inventory management system that scales with it. Inventory management becomes more complicated with each new product the business sells and every new customer who buys it. Thus it is important to employ the right inventory management software (IMS) to help streamline multiple processes with a single program.
In order to find the right inventory management solution, it is crucial to define the pain points that need to be solved. These pain points may include overstocking/understocking, incorrect inventory levels or sales reporting, handling omni-channel inventory. Determining these needs will help in identifying the features each solution offers and how they will address the needs. Next is to evaluate the level of customization and compatibility with other systems, especially those that are currently being used or are going to be implemented within the business. Assessing the customer service capabilities (e.g., 24/7 service, dedicated representative) of the solution providers is a must as it can make a big difference when there is a need additional support.
Check and monitor.
Frequent and organized check-ins will help streamline all aspects of inventory optimization together. Considering cycle counting programs in order to gauge the accuracy of inventory levels through routine audits can help in understanding the product sell-through rates, which can then be used to liquidate products that aren’t moving in order to optimize costs and storage space. It will also enable the retailer to introduce new products into the mix that share similar characteristics with the biggest sellers. Finally, keeping an eye on the product quality and any discrepancies in size, color or style can help increase customer satisfaction and lead to lower return rates.
Continued evaluation is key for enhancing the inventory management process. Having a well-run process in place — from inventory organization to implement the software to data capture and then review and analysis – can ably support the growing business by adding efficiencies to shipping processes, reducing fulfillment timeframes, lowering rate of returns and enhancing customer satisfaction while strengthening the bottom line.
