Future Of Retail Industry

The retail industry is in the midst of a customer revolution.
The collision of the virtual and physical worlds is fundamentally changing
consumers’ purchasing behaviours. Consumers are seeking an integrated
shopping experience across all channels, and expect retailers to deliver
this experience. Failure to deliver puts retailers at risk of becoming
irrelevant. The key drivers of this customer revolution are the rapid
adoption of mobile devices, digital media and tablets equipped with
shopping apps. In fact, the number of smartphone users in the United
States will rise to 159 million by 2015 from just 82 million in 2010.2
Traditional retailers must find opportunities to seamlessly embed the
virtual world into their retail strategy by developing in-store and online
technologies that allow them to create and maintain meaningful and
sincere connections with customers across all channels.
The Future of Retail Has Arrived
The retail paradigm has shifted from a single physical connection point
with customers to a multi-pronged approach that crosses both physical
and digital channels. The traditional bricks-and-mortar retail store is
no longer the dominant medium for purchasing goods. Instead, it
serves as one of many potential connection points between customers
and a retailer’s brand. As one industry observer has noted, “While
physical stores may have once enjoyed the advantage of crafting cool
shopping experiences, the aesthetics of the iPad and all the social
sharing surrounding online shopping today are now shifting that
advantage to online retailers.”3 However, many retailers are struggling
to take advantage of the increasing number of channels available to
them for connecting with customers. Further, they are neglecting to
make appropriate investments in technology, operations and talent
that would better equip them for seizing control of these channels.
Retailers’ technology can be disparate and fragmented, and multiple
physical locations can drive an unsustainable cost structure that is not
flexible and often underperforms. Additionally, employees often lack
the knowledge, training and tools necessary to facilitate a shopping
experience that engages customers across a variety of channels and
extends beyond the traditional shopping experience. As a result,
many retailers are falling behind in the race to offer a unique and
comprehensive experience with their brand that keeps pace with
customers’ ever-evolving attitudes and expectations.
Retailers are faced with the challenge of engaging customers on more
than just price. They must make shopping across all channels a more
stimulating and satisfying experience, rather than simply a way to find
the lowest price for a particular product. New competitors are disrupting
the market and capturing valuable market share through innovative
business models. Many companies are now seeking to become
vertically integrated by controlling the whole supply chain. As a result
of a vertically integrated value chain, a new generation of e-commerce
players is bringing high-quality products from the warehouse directly to
consumers at significantly lower prices.4 Hence, retailers must respond
to new competition by enabling digital experiences that improve both
the store and virtual experience for the customer. Equally important,
they must find a path to success that not only addresses the needs of
their customers today but is also flexible enough to continually evolve
with customer interests and expectations. The customer revolution
and the future of retail have arrived. Retailers must respond now or risk
facing obsolescence.

Retail’s Path to Relevance

Adopt a single strategy and vision across channels
Today’s consumer is increasingly connected to both the physical and
digital space and able to interact with retailers through multiple channels
simultaneously. To stay competitive in this ever-evolving landscape, it is
imperative for retailers to deliver a seamless customer experience across
all channels and provide the right services and products at the right time.
Specifically, retailers must develop an integrated strategy that aligns
talent, physical space, processes, marketing and merchandising to meet
consumer demands. This strategy should be supported by emerging
technologies and continually adapted to remain relevant to the customer
of tomorrow.
A robust retail strategy must include:
• A strong vision of the experience the customer desires across all
channels
• A nimble operating model that can adapt as the retail environment
changes
• A deep understanding of how to support the vision through inventive
digital solutions and retail technologies, such as playbooks to
operationalise the omni-channel strategy.