Falcon Invoice Discounting: Empowering Your Business Growth
Ten Emerging Trends and Business Strategies Leading the Future of Retailing
1. Ten Emerging Trends and Business Strategies
Leading the Future of Retailing
Implementing the Future of Retailing
http://retailintelligence.wordpress.com/
2. The Evolution of Retailing
“The best way to predict the future is to create it” (Abraham Lincoln)
The history of the future of retailing is being created today by leading
innovative companies such as Amazon, Apple, Disney, Google, Nike and
Zara. Each is leading the way forward, pioneering specific initiatives that are
defining the future of the retail landscape. Amazon is leading in the mining
of deep customer insight and in creating personalized shopping experiences.
Apple is leading in the development of “smart” personal devices, Disney is
building interactive stores, Google is developing Web TV, Nike is integrating
live customer input into product design and Zara is redefining the supply
chain process.
On the consumers’ side, customers are living in a fast-paced, wireless,
continuously connected culture and they are looking to easily manage and
control their lives through time-shifting technology and smart media devices.
A large portion of their life has become “digitized” through emails, instant
messages, downloads and virtual social interaction with friends, family and
their favorite brands. They are actively engaged with their favorite brands
and they are interested in creating their own customized shopping
experiences which allow them to shop efficiently on their own terms, at the
time and place of their choosing.
These two worlds are quickly converging, with the retailers’ technological
and process advances enabling them to precisely target and engage the
demanding customers who want to shop on their own terms. The leaders
and winners in the next generation of retailing will be the brands that fully
integrate these technological and process advances across the organization,
while empowering and developing a personalized connection with the on-
demand, digital customer.
~ ROI: Retail Operating Intelligence ~ 2
3. The Evolution of Retailing
The consumers’ acceptance of internet shopping in the prior decade led to
the development of multi-channel retailing, with leading companies
broadening their marketing reach and integrating operations to maximize
cross-channel synergies. The next five years will see the on-going
convergence of smart technology, consumer insight, interactive-multi-
channel marketing and an express supply chain, all providing real-time
insight and access to the digital customer. These brand driven advances in
marketing, technology and the supply chain, along with the progression of
the customer’s digital lifestyle, will create a dynamic customer to brand
relationship and interactive shopping experience. The customer will have
creative input and a social connection with the brand, while the brand will
have extensive real-time knowledge and precise targeting capabilities of the
customer. A comprehensive retail strategy that integrates these initiatives
across the organization will support and empower the customer to design
their personal shopping experience and shop on their own terms: when,
where and how they wish. This puts the shopping controls in the hands of
the consumer.
~ ROI: Retail Operating Intelligence ~ 3
4. #1 On-Demand Shopping
Trend: Consumer Choice & Control of Shopping Preferences
Strategy: Empower Consumers Shopping Options
The customer, through smart media devices and engagement with the
brand, will have the ability to create and control their own personal shopping
experience. They will hold the remote control of their shopping experience;
choosing when to shop, where to shop, how they want the product
presented, even designing their own product, all from their Web-TV, smart
mobile device or smart retail store. The brands that understand, anticipate
and respond quickly to the customer’s shopping preferences will flourish,
while others will play catch up. With live, multi-media brand access, the
customer will have personal control over their shopping experience, just as
he/she has control over the TV viewing experience today. This is the future
of retailing; interactive, real-time, mobile, customer controlled, on-demand
retailing with brands providing responsiveness through targeted,
personalized marketing.
There is an entire generation maturing now that was brought up with the
internet and digital world being a formative part of their lives. They take
“Googling”, socializing and shopping on-line for granted. They are
accustomed to the instant gratification offered through the digital world;
shopping, downloading and instant messaging at anytime. They have grown
to expect to have their world structured on their own terms, on-demand.
This “wired” group entrusts and relies on the digital world to transparently
augment their daily lives. Society in general is also adapting to new
technology at an accelerating pace, re-shaping the retail landscape. Video
stores are quickly disappearing with the shift to movie downloading.
Bookstores will continue to evolve from print sellers to social gathering
places with the mass adoption and price reduction of e-readers and personal
tablets. Smart phones are readily accessible, allowing consumers a constant
connection to their social contacts and valued retail brands. The imminent
web/TV convergence will allow for seamless web access, strengthening the
web as an informative and entertaining marketing channel, directly in the
consumers’ living rooms.
The responsive, innovative retailers will implement a business strategy that
embraces the consumers’ freedom of choice and empowers them with
personalized and flexible shopping options.
~ ROI: Retail Operating Intelligence ~ 4
5. #2 Customized Shopping
Trend: Consumer Input Into Design & Shopping Configuration
Strategy: Personal & Customizable Shopping Options
The consumers’ increasing capabilities to interact in real-time with retailers
through the web, television or mobile devices will certainly transform the
way shopping is transacted. Brand insight of extensive consumer activity
will intuitively recommend relevant product offerings and empower the
consumer with the ability to craft his or her own personalized shopping
experience. Technology will enable virtual, personal stores with products
and a shopping format based on previous shopping history, interests and
preferences. Amazon’s “wish lists” and Zappo’s “favorites” will evolve into
personal storefronts, accessible by the specific consumer and invited friends,
family and social networks.
Consumers will also have the ability for much more input into the actual
design of their product choices. On select products today, Nike allows the
customer the option to customize the design of their own shoe. On-going
advances in consumer behavior analysis and interactive communication flow
will allow personalization capabilities to become a powerful competitive
advantage.
A strategy that provides the consumer with targeted choices and
customization options will enable the consumer to create a truly personal
shopping experience of their own design.
~ ROI: Retail Operating Intelligence ~ 5
6. #3 Deep Customer Insight
Trend: Micro-Targeting Customer Segments
Strategy: Multi-faceted Customer Insight & Analysis
With the increased use of the internet, there is an ever growing database of
consumer activity being accumulated. Advances in marketing intelligence
data-mining and purchase behavior modeling will enable the brands to
accurately utilize the cloud data to predict and target a specific customer’s
purchase interests. Customer targeting will become much more intuitive
and accurate as segmentation models are enhanced. This process will allow
for efficient costumer contact strategies with relevant and actionable product
suggestions targeted to specific customers. Today, Amazon supplies
customized selections and suggestions based on a customer’s prior or similar
purchase history. Enhancing this in the future with improved data base
analysis and statistical modeling will allow for a relevant, targeted product
presentation and a personalized shopping experience. The on-demand retail
customer will access their multi-media device of choice and see a customized
shopping presentation, targeted according to their personal shopping
preferences and potential interests. The accuracy of the targeting and
product suggestions will determine the customer’s loyalty and propensity to
bond with and support the brand.
Consumer privacy rights are a sensitive issue as there are serious personal
security implications resulting from misuse of consumer information. This
will be an on-going topic in the future as consumers inundate the web with
personal data, and organizations work to gain access to better understand
and target potential customers. To navigate this sensitive issue, retailers
will have to earn the trust and respect of the customers they communicate
with. A trusted relationship will allow the customer the benefits of a highly
customized shopping experience while the retailers will benefit from a depth
of rich historical data.
~ ROI: Retail Operating Intelligence ~ 6
7. #4 Multi-Channel Digital Retailing
Trend: Various Alternative Shopping Methods
Strategy: Multiple, Interconnected Shopping Channels
The prior decade saw the consumers’ acceptance and migration to web
retailing and the implementation of multi-channel retailing as the dominant
growth strategy. Retailers realized the synergistic marketing and
operational benefits of presence in more than one selling channel, along with
new methods to reach consumers. Web presence, email and web search
contact strategies became required business standards. Multi-channel
retailing enabled the brands to efficiently engage the customer across
multiple channels; stores, web and print, uniformly driving brand awareness
and purchase motivation.
The multi-channel retailing strategy will continue to be the foundation for
consumer retailing over the next decade, however, the channels will evolve
to include various forms of interactive multi-media, distributed through
smart devices and digital media. The future multi-media retailing channels
will be merged web/TV, mobile phones, tablets, interactive retail stores,
social media and digital kiosks. These multiple selling channels will be
interconnected and allow the customer a seamless shopping experience
across all channels. The leading brands will operate through a diverse
variety of selling channels, while the infrastructure remains transparent to
the customer.
A great example of this multi-channel digital strategy today is Crate &
Barrel, which has a robust store, catalog and on-line presence and is also
aggressively promoting mobile shopping, social commerce and location
based coupon offers.
~ ROI: Retail Operating Intelligence ~ 7
8. #5 Interactive Marketing 3
Trend: Social and Participatory Connections
Strategy: One–To-One Interactive Marketing
Advances in technology will allow for personalized, one-to-one customer to
brand interactivity. Innovative brands will present a host of entertaining
shopping options to interest and engage the digital consumers. As an
extension of the customer customization strategy, consumers will be able to
virtually model different styles of clothing or perhaps virtually see furniture
as it would appear in their own living room. Colors and styles can be
altered on the fly. Smart digital medial will allow all of this interaction to
take place anywhere at anytime.
Real-time connections will allow for communication with family or friends to
solicit their instant opinions. Shopping for many is a social event and this
remains true online as social networking virtually supports this. Retailers
who maintain a fluid, interactive dialog with these social consumers will build
brand loyalty. Ultimately, this interactive brand shopping experience is
entirely at the consumers’ choosing; transforming shopping into a truly
customer driven, personalized, on-demand initiative
~ ROI: Retail Operating Intelligence ~ 8
9. #6 Smart Retail Stores
Trend: Shopping as an Entertainment Experience
Strategy: Interactive Smart Stores
As the bricks and mortar retail stores compete for the consumers’ attention
amongst the variety of digital shopping and entertainment options, they will
more than ever need to become intriguing shopping destinations. Retail
stores will continue to be the physical manifestation of the brand, wired to
supply the information, services and options readily accessible through the
web. Retail stores will become wired “smart-stores” and “retailtainment”
centers with multi-media interactivity and virtual product demonstrations.
The Walt Disney Company is currently remodeling all of its retail stores to
include a new, playful, interactive, customer participatory concept. As is
done in the Apple and other retail stores, mobile checkout and social
community gatherings will be part of the experience.
~ ROI: Retail Operating Intelligence ~ 9
10. #7 Confluence of Technological Devices
Trend: Merging of Technology for Simplification and Convenience
Strategy: Maximize TV/Web Convergence
The pace of technological change is increasing exponentially, creating new
platforms and opportunities to reach, communicate and transact with
consumers. The leading retailers will invest wisely in new “smart”
technology and rigorously pursue innovative applications to reach the
digitally connected customers. The on-demand generation of consumers are
impulsive and lack the patience to shop through the conventional “old world”
retail processes. They require real-time, instant communication and the
ability to interact with people and businesses seamlessly. They expect
innovative, fun and functional technology to enhance their lifestyle.
The consumers’ online and offline worlds will most likely be managed by two
linked multi-media devices; the morphed web/computer/TV and a personal
mobile device. They will organize their daily lives with these two devices,
allowing them to efficiently manage all activities. With this advanced, yet
user friendly technological landscape, consumers will be expecting relevant
and personalized service from retailers.
The converged Web/Computer/TV, seamlessly linked to the smart personal
mobile device, will be the interactive connection to the digital world. This
concept is quickly becoming a reality as the technology already exists that
allows a smart phone to communicate with a computer or television.
Consumers are currently shifting viewing time from the television to the
computer, as the quality of web content and downloading options expand
and improve. Web access through the TV will soon become mainstream as
the confluence of the TV and the web is imminent. Innovative leaders such
as Google and others are working feverishly to bring these smart devices to
the mass market. The morphed TV/Web device will be the household control
center for easily accessing entertainment and information.
With the implementation of the Web/TV, the retailers’ web sites will be one
of many viewing options, along with traditional television networks, cable
networks and the easily accessible web based networks. This puts major
emphasis on the retailers’ on-going development of their web sites to be
meaningful destinations to communicate with, educate, entertain and
convert viewers to loyal customers. The increased use of video for product
demonstrations is a perfect use of the Web/TV platform.
~ ROI: Retail Operating Intelligence ~ 10
11. #8 Mobile Shopping
Trend: Wireless Shopping Anywhere
Strategy: Capitalize on Mobile Shopping Applications
Mobile shopping options will empower consumers with additional freedom
and a new set of tools to enlighten their shopping experience. Consumers’
mobile devices will enable them easy access to all of the pertinent
information necessary to make a comprehensive product evaluation at the
point of purchase. Brands are quickly embracing and developing this new
selling channel with innovative applications that permit easy shopping along
with marketing and promotional messaging capabilities. Location based
marketing promotions and the ability to scan any item for detailed product
data and competitive comparisons are also quickly being adapted by
consumers. Mobile access to social networks and review services such as
Yelp, allow for real-time insight and advice, making mobile shopping a fun
and functional shopping experience.
~ ROI: Retail Operating Intelligence ~ 11
12. #9 Express Supply Chain
Trend: Speed & Options of Product Delivery
Strategy: Expedite the Supply Chain Process
Another critical, but less glamorous component of future retailing success
will be the implementation of increasingly faster and responsive supply
chains. This segment of the industry will have to step-up and challenge the
accepted status quo. The leading companies that want to meet the needs of
the real-time, instant access, impatient customer will recognize this
opportunity and invest accordingly. An express supply chain is all about
speed, simplicity and efficiency to design, produce and deliver product to the
customer. Product development schedules and production lead times must
be reduced through initiatives such as domestic sourcing, flex production
and expedited delivery. Same day or overnight delivery systems will be re-
engineered to become cost favorable, satisfying the real-time customer’s
expectations and putting further pressure on the practicality of the
brick/mortar store model. Today, the retailer Zara in Europe has
engineered a supply chain that can design, produce and deliver a fashion
product in thirty days.
Another innovative enhancement to the supply chain is Sears’ alternative
delivery and pickup options currently being offered to customers. In some
markets today Sears offers the customer the option to buy online and pickup
in-store and they are also testing convenient drive-through online order pick
up locations.
Think of the possibilities when real-time selling data and instant customer
feedback can be used to indentify emerging trends. New or hot selling
products can be quickly developed and delivered, optimizing sales
opportunities. On select products today, Nike allows the customer the
option to customize the shoe design and have it delivered within a
reasonable time. Customer feedback or opinion pools can be utilized to
guide product development. This type of customer influenced design will
become much more prevalent in the future as technology, production and
supply chain advances make this feasible.
~ ROI: Retail Operating Intelligence ~ 12
13. #10 Responsive Organization
Trend: Increasing Pace of Technological and Societal Change
Strategy: Speed In All Organizational Aspects
The on-demand customer is utilizing technology to help them organize and
improve the quality of their busy lives. They connect to the digital world to
access pertinent, real-time information, and they expect an instant response
to their requests. They will build loyal and trusted relationships with the
services and retailers that provide them with the fastest response of
accurate, entertaining and relevant information.
To succeed in the fast paced, ever changing, on-demand retail world, an
organization must promote a forward thinking, fast moving, responsive
culture across all functions. This is a cohesive operating strategy that is
focused on maximizing the connection, understanding, communication and
delivery to the on-demand customer. Speed of process, data interpretation
and innovation will be required to enable the retailer to evolve along with the
customer.
~ ROI: Retail Operating Intelligence ~ 13
14. Bonus! #11 It’s All About the Product
Trend: Consumers’ Desire For Lifestyle Enhancing Products
Strategy: Focus on Innovative & Functional Products
Ultimately, an organization exists to deliver highly desired products or
services to the consumer. All other organizational efforts are designed to
support this task. This remains true whether the product is marketed at a
flea market or through a mobile device on a tropical island. Successful
organizations must first have great products that motivate the desire of the
customer. Without that, none of the above strategies will be enough to
propel an organization to on-going excellence.
~ ROI: Retail Operating Intelligence ~ 14
15. Winning In the Future Retail World
The future of retailing is interactive, virtual, intuitive, customized and on-
demand. Although the pace of technological change sometimes seems
intimidating, the brands that develop a responsive organization which
respects, understands and engages the on-demand customer will progress
and succeed in the future digital retailing world. This comprehensive
organizational strategy requires integration of the latest “smart” technology,
advanced intuitive customer insight, stimulating interactive marketing, a
cohesive multi-channel marketing network and an accelerated supply chain
to bond with the demanding and selective customer. The customer will have
more choice, control and power than ever before. The organizations that
create an authentic, personal, interactive and responsive connection with
them will flourish.
~ ROI: Retail Operating Intelligence ~ 15