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Beyond the Four Walls

10/25/2017

The Nobel Prize winning physicist Nils Bohr once famously commented, "Prediction is very difficult, especially if it’s about the future." Those who ply the retail trade can certainly relate. Difficult though it may be, trying to see what the future holds is a significant part of driving retail operations, which, according to WalMart’s CEO, needs "people to lean into the future."

What lies ahead for the retail industry, and how are retailers shaping their companies to prepare for it?Beyond the Four Walls

At this point, nearly all retailers understand they need to think beyond the traditional four walls of their business, an orientation being driven by rapid consumer change. Consider the following developments in the past year:

  • More than three-quarters of consumers regularly price-check against competitors, up 15 percent.
  • The number of consumers who research online before making a store visit has reached 94 percent, nearly a 10 percent increase.
  • Eighty percent of consumers say they are less inclined to visit a store when its website does not provide current product availability, an increase of 42 percent!

As technology changes, consumer behavior changes with it: 82 percent of consumers are influenced to complete their purchases by product reviews, and 93 percent review product ratings before making a purchase. Naturally, this information has exploded through social media.

While retailers may be aware of how technology is affecting their business—just ask them about Amazon—a recent study by Morar Consulting shows that only 17 percent believe that business transformation is important to their success. Quite frankly, that statistic is astonishing.

 According to a recent report by PwC, 
The trends are not good for store-based retailers, which generally complain of challenging conditions and frugal customers. Although overall retail performance is quite strong, during the last several years essentially all the inflation-adjusted gains in retailer revenue have been driven by online channels, which enjoy growth rates as much as 7 percent higher than retail sector growth as a whole.

Steve Sample, administration manager at Canadian-based BURNCO Landscape Centre, a retailer of hardscape and bulk materials, crystallizes the current retail environment: "Today's consumers are used to shopping and comparing prices online, and businesses have to be online to be in the game. If you don't have the ability to sell, or at least feature your products online in an informative way, it's going to be tough. Our e-commerce solution allows customers to buy their landscaping supplies 24/7 from us online."

To be sure, retailers are increasingly incorporating outreaching strategies to reach their customers beyond the store itself. Principal among these:

  • eCommerce
  • Social media
  • Gift and list registries
  • Texting

The PwC study posits another interesting approach: using showrooms to alleviate the hardships of inventory management.

Whatever techniques retailers are adopting to reach potential buyers, increasingly they’re coming to understand the importance of personalizing the customer experience. For store-based retailers, this perspective is particularly important. According to TimeTrade’s State of Retail 2017 report, consumers state they would boost in-store spending if they were getting better and more personalized service; yet nearly half of consumers say they "never" or "just sometimes" receive personalized service.
    
Speed and Information
Another area of retail focus is increasing the speed of checkout as means to improve the customer experience. As the chief digital officer of Toys R’Us notes, "It’s all about a seamless, frictionless experience for our customer, so that ability to make the payment online, go into the store, scan the product, get the product, and be out of the store in minutes, is very important."

Important as well is having an informed staff. Customers want information—more information, more frequently—before they buy. Half of customers seek an expert when they enter a store, and nearly three-quarters say product knowledge is what they need most from sales associates. Consequently, both training and provision of tools that arm associates with information about how to solve customers’ problems are increasingly important for retailers. So, too, is providing mobile technology that enables customer service wherever and whenever a customer seeks it.

How We Can Help
Epicor provides an array of retail-specific tools to help retailers respond to the changing retail environment, both within and beyond the four walls. For more information on our broad portfolio of retail technology, you can go here

 

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