Our clients are telling us that they are focused on delivering value and quality in an evolving omnichannel world. We know that technology has a huge part to play in the future, but we wanted to understand if retailers saw this as a driver for growth or whether other areas would be influencing change.
Our research for our Future of Retail report provides the answers! It shows that while technology plays a big part, offline developments still have a significant role to play. Dominic Watkins takes a look at the areas retailers identified as the top five factors for growth.
Click here to view table.
Omnichannel is still king. Retailers need to make sure that their propositions are consistent across all channels. Click and collect may seem an old idea, but it is at the sharp end of many omnichannel experiences and continues to grow as it drives increased customer spending in-store.
E-commerce retailers are looking to set up shop on the high street. The majority of retail sales are still taking place offline and, although the retailers that participated in this survey predict this will change to a 70/30 split in favour of online in as little as five years’ time, e-commerce retailers are recognising the need to set up physical shops if they want to gain significant market share.
2. Technology systems
Traditional bricks-and-mortar retailers will need to invest to win against companies for whom data optimisation, data security and customer fulfilment are in their DNA. Mobile will continue to grow until it matches bricks-and-mortar. Yet it will also be a key driver in bricks-and-mortar sales, as customers use their mobiles in-store, and integrated digital touchpoints will be critical investments for many.
3. International expansion
Overseas expansion continues to drive opportunities for growth and increased profits. As the UK market edges ever closer to saturation, retailers are looking to mature in emerging economies, with omnichannel and supply chain technology as their passport to successful international expansion. However, expansion is not for the faint hearted, with cultural differences, mercurial regulatory regimes and differing customer expectations all presenting significant challenges.
4. Big data
Making data work harder is key. Bricks-and-mortar retailers know they have a lot of work to do if they are to catch up with their online competitors. Retailers are examining how they can better mine their data to get to know their customers, while optimising and personalising the shopping experiences across the omnichannel.
Finding better ways to protect customers’ privacy and data is also important. Every month brings reports of another retailer facing the reputational nightmare of a major data breach. Motivated by customers’ expectations, brand reputation, shareholders and the costs of dealing with a significant incident, retailers are on a path of investment and improvement in this area.
5. Warehouse efficiency
Investment will improve fulfilment. With online native retailers setting the bar for speed and convenience, traditional retailers recognise the need to invest in robust order fulfilment, stock awareness and lightning-speed deliveries.
Then, now and in the future, value and quality will remain the bywords of any successful retail proposition, but the challenge will be how to align these traditional values for a modern age of retail, where an integrated, accessible and secure customer experience is the norm rather than the exception. That will take clear strategic thinking and balanced investments that UK retailers are well placed to make.