Weitere ähnliche Inhalte Ähnlich wie Innovation in the Retail Sector - Denave (20) Kürzlich hochgeladen (11) Innovation in the Retail Sector - Denave2. An industry which stands at approximately US$25 trillion
in 2018 and is expected to rise to approximately US$28
trillion by 2020, is undeniably a big slice of the global
economy pie.1
And that’s what global Retail industry is all about – a
vibrant and exponentially evolving industry which is
defying all claims of reaching dead-end owing to
advancement in e-commerce and is setting newer
benchmarks with its charismatic transformation.
With companies like Apple, Amazon, Microsoft breaking
norms in the space of traditional retail, one can also see
the mom & pop stores still surviving. The crests and
troughs of the sector have led the ecommerce division
to embark upon an altogether new growth journey. So,
all in all, the segment is wide and varied with even
drastically different branches of it still thriving, proving
the strength of the domain.
BUT
We can’t deny that transformation is the survival mantra
in today’s age and the industry can be seen well-bitten
by the bug of innovation.
UNDERSTANDING
THE LANDSCAPE
©Denave
3. While as ambitious beings, humans have a fantastic ability to accept and even
celebrate change (though eventually perhaps) but the curious nature bequeathed by
nature has always led us to dissect the change and understand its origin.
The million-dollar question – what caused the retail industry to make this shift to
modern retail? What led to the replacement of that comfortable friendly
neighbourhood seller with that discounted online deal?
The generic answer may be the evident technological revolution which has not only
impacted retail but every industry sector and even the life of mankind in a major way.
The more domain-personalised reason can be stated as the transformation of buyer
into a digitally empowered creed – the hyperconnected consumer and the dynamic
Retail landscape fuelled by competing innovation strategies.
With both these conditions, it was a question of getting on the wave of
transformation or succumbing on the side lines. Retail chose the first option and the
result is in front of us today – a reinvented & technology enabled industry.
LOOKING
INSIDE
THE SHIFT
©Denave
4. The world of retail has become an experiential springboard today. However, the
sector has gone through various ebbs and flows in its journey to its present stage.
While commerce has been there since the existence of mankind with barter and then
various form of currencies becoming exchange metrics for goods and services, the
break of dawn of modern retail can be traced back to late 1800 and early 1900.
First cash register (can be said as the first seed for POS systems) came into existence
in 1879. The other major milestone was the launch of shopping malls which the
1940s-1970s era brought in. Another major breakthrough was the introduction of
ecommerce in the 1990s and the road ahead from there is an enough proof of one of
the fastest-paced innovation catch-up ever.
Omnichannel existence, personalised
experiences, retail becoming
retailtainment and so many
other trends graduated overtime
to become a norm eventually.
The New Rule:
If You Don’t Innovate
– Then Stagnate
– And Perish
CATCHING UP
WITH THE PACE
©Denave
5. Retailers have risen to the challenge of innovation as the understanding of perils is
clear with several big brand names disappearing from the market lately. Also, the
ability to infuse intelligence into data has shown the industry the grand picture of a
reinvented retail.
Let’s look at some numbers validating the stance
• By 2025, in-store sales will still make up 75% to 85% of retail sales.2
• By 2023, the global gamification market is expected to reach US$19.39 billion
and retail holds the largest share in this market.3
• By 2021, over three-quarters of retailers plan to invest in big data solutions for
IoT data and 72% in cognitive computing and machine learning.4
• By 2021, 70% retailers will install in-store beacons for location-based marketing.
5
• By 2021, 65% of retailers plan to invest in inventory and supply chain
automation.6
STATISTICS
SHOWING
THE WAY
©Denave
6. • By 2020, 50% of retail customer service requests will be conducted, at least
partially, through conversational AI applications. 7
• By 2020, retailers’ spend on artificial intelligence is expected to increase by
53% by 2020.8
• By 2019, about 40% of retailers will develop a customer experience
architecture supported by AI, boosting conversions up to 30% and revenue
by 25% through hyper-micro personalization.9
• 62% of smart phone users have made an online purchase via a mobile device
and by 2019, there will be more than 5 billion mobile users in the world. 10
Industry Speaks
• Expanding unified commerce initiatives (omnichannel) as well as leveraging
social media engagement is a priority for 54% retail brand CIOs.11
• 93% of online retailers believe mobile innovation affects profitability.12
• A frictionless mobile experience is an essential part of the commercial
offering for 75% of retailers – 51% are now investing in it.12
• 71% of retailer software decision makers believe that agility is a critical
benefit of moving to cloud-hosted software-as-a-service.13
©Denave
8. The biggest leap of retail – the one which is the
reason for all the other shifts, is none other than its
transition from a product/service centric industry to a
consumer-focussed one. Brands are designing
experiences around the products instead of focusing
all their energies on the product or the stores or the
online portals only.
Constructing
Experiences 1
2Another big move has been the increasing acceptance
of collaboration-driven ecosystem. With due respect to
competition, brands are readily exploring avenues to be
able to benefit from each other with the provision of
bundled products/services – after all, the consumer of
today demands convenience at any cost. Increasing
collaboration between manufacturers and retailers is
also another leap in optimising a product journey to a
consumer’s home.
Imperative
Collaboration
©Denave
9. The third significant stride has been courtesy the
boom in social media and mobility. There has been an
emphasized focus of the brands on assessing and
integrating real-time feedback. It’s the era of
hyperconnected consumer landscape and even a
single dissatisfaction projecting tweet has the power
to make thousands of loyalists abandon the brand.
Connected
Shopper
With millennials taking up the new TG space and the
parallel tech/online revolution, bets were earlier on the
demise of offline but the same has been proven wrong
with almost 46% of millennials14 still thronging stores for
the experience – even if they plan to buy online. Hence,
the online marketplace trend can also not be negated.
Therefore, perfecting a completely integrated and
seamless experience in the omnichannel world is
another step which retailers have taken up seriously.
Mastering
Omnipresence
3
4
©Denave
10. WHAT IS THE
ROOT OF
PUSH IN
INNOVATION
?Multiple factors can be listed as the trend drivers which
are pushing the industry towards its next big leap or we
can say the re-invented retail of 2030.
©Denave
11. • Increasing vertical integration with emergence of
newer and independent (at times, bypassing
distributors) business models.
• Extensive competition in the digital domain
coupled with entries of newer players.
• Cost leadership and consolidation aimed efforts
spurred by investors.
LET’S LOOK AT A FEW BROAD SEGMENTS
Changing Industry
Dynamics
• Changing consumer TG generation and current mass
market going into stagnation.
• Growth of fragmented niches with consumer becoming
more involved.
• Rise of hybrid shopping with attractive pricing models
(read discount).
• Increasing market for E-grocery and the competition for
digital placements.
Evolving Consumer
Behaviour
©Denave
12. • Tighter regulations pushing retailers for more
innovative approach.
• Actions to counter the impacts of fragile global
supply chains (political unrest, tariff regulations or
natural disaster etc.).
• Evolving lifestyle for not just consumers but for
staff as well.
Other External
Factors
©Denave
13. The question which every retailer must ponder upon is that if the rush
to innovate causing any crack in the foundation of retail – a bedrock
formulated by share of mind, average order value, brand engagement
scores etc.?
To understand the concern better, let’s take few reasons examples where hurried
innovations became the reason for brand’s downfall.
• Treating online & offline customer segments as two entirely different worlds
(giving more emphasis on digital channel causing a skew) instead of trying
to weave an integrated experience.
• In the age of competitive pricing based on advanced optimisation
algorithms, succumbing to the discount race instead of value-polishing the
product and keeping it discount-proof.
In both the cases, the extreme excitement to ensure that latest technological
innovation is integrated in brand strategy, instead can have adverse impact on
the brands because of an imbalanced approach neglecting the basics.
Hence, while it’s critical to constantly pursue innovation, it is even more
important to upkeep the domain basics and practice relevant and responsive
retailing.
THE BIG Q
STILL REMAINS
©Denave
14. While these elements are already been practised by
some or the other retail players and being constantly
experimented with by multiple start-ups, these trends
are all set to see an unprecedented upswing in the future:
• Customer recognition and contextualisation for
delivering a highly personalised experience.
• Conversational commerce seeing a rise with significant
advancements in natural language processing capabilities.
• Shorter delivery cycles with the help of IoT based delivery devices (drones,
robots etc.).
• Gamification seeing exponential increase in adoption by the retailers for both
online and integrated offline models.
• Chat and messenger bots becoming integral elements of retail strategies and
moving over mere engagements by turning them into sales.
• Increased analytics leverage revamping various functions of domain like
merchandising, marketing, audits etc. or geospatial analytics leverage for
carving the best omni-channel presence strategy.
A PEEK INTO
THE FUTURE
©Denave
15. • Revamped brick & mortar stores as emotion-experience centers with
added elements like AI-enabled virtual mirrors.
• Increase in voice-based searches in online retail space based on NLP
advancements.
• AR taking a centre stage for customers looking for non-pervasive yet real
experience.
• Rise of check-out free payment services with pin/ identity validation etc.
getting replaced with elements like facial recognition, fingerprint scan, RFID
tag etc.
• Intelligent supply chain models with smart tags and other digital ids on
products carrying out communication regarding stock availability as well as
sharing product info with the consumer.
• Image recognition rewriting the basics of compliance management as well
as field staff supervision.
• 3D printing seeing an exponential rise with on-demand product
manufacturing becoming crucial element of personised retailing.
• Social commerce seeing an upswing with people becoming retailer’s
incented social evangelist (Ex- companies like MeSpoke and Threads
leading the microtrend).15, 16
©Denave
16. It’s time to put on your innovation shoes and step into the race with all your
might, however, let’s look at these few quick tips before you take the big
plunge.
• Experience per square foot will be the new success measure, hence,
customer experience is the most critical element to master.
• While the customer is most important, the on-ground staff or the brand
employees are also equally crucial, hence, invest into them as well.
• Maintain the balance between offline and online stores/ sales and don’t
neglect one for the other.
• Understand the real fitment of tools and technology before getting into it –
leverage AI, Analytics, ML etc. but with full understanding of your
requirement and expected impact.
• Invest into trustworthy sales tech partners to enable you on the tech journey
of your brand and focus your energies into what is your forte.
TIME TO
GET GOING
©Denave