this two part article on some of the predictions that were made back in December 2012 for the next year. What we know now is that there was increased buzz around digital, Omni-channel, social media, digital marketing, and data. Some of these will certainly form some of the predictions for 2014. Part one can be found here: Retail Predictions 2013 Part One
So here again were the predictions for 2013 followed by the review.
6) Cutting out the middleman: To compete in an ever increasing online market and floor discounting environment expect retailers to cut out supply channel layers where possible. Look at Kmart who now go direct to the manufacture, bypassing the importer to achieve the best possible price point for the consumer. There will be more specialised brands like Zara entering the market where the retailer can control the price and protect their margin.
Year in review: What we did see in 2013 was how many overseas companies were prepared to invest in the Australian market and how established brands were ready to open concept stores. From William & Sonoma, GAP to Samsung and Nike with their fabulous examples of how to make retail a destination experience. Even if you don’t shop at these new additions to the High Street they are certainly setting a positive example of how bricks and mortar retailers have evolved in enticing the customer. More are on the way as this trend continues in 2014.
7) Social networking platforms: ‘Joining the conversation’ is no longer for “those people with too much time on their hands”. It’s now seen as the preferred method of communication for Gen X&Y. Smart retailers will embrace this more in 2013 by listening, engaging, attracting and converting their customers into loyal followers. The goal is to look for advocates that speak your message to their friends.
Year in review: Just have a look at what is being said about Generation Z: These are the kids that are now looking to influence and drive purchase channels. Social networking sites and instant messaging are all part of a daily activity as Generation Z matures into leaders, so they have little concern for privacy and no problem sharing even the most intimate details of their lives with virtual strangers. They carry smartphones like cowboys of the new millennium. They tweet, post and shoot images faster than a gunslinger. They are the true "digital natives”. If we don’t speak to them on their terms we might be in trouble.
8) Brand focused: Customers like to be part of a community, one that they can relate to and makes them feel included. Look for product branding to increase in 2013. The number of companies that now have branded stores is increasing. Retailers will be looking to create ‘brand fans’ not just customers.
Year in review: US fashion brand J Crew revealed its September catalogue via picture-sharing social media website, Pinterest. With nearly 60,000 followers on Pinterest, J Crew clearly views the site as an ideal marketing vehicle, and it has this week been encouraging its fans to pre-order any fashion items before they went on sale. Because J Crew is a brand that has a loyal following, points of differentiation are seen as key to their take to market strategy.
9) Omni-Channel supply chain alignment: For those retailers that have yet to streamline their supply chain touch points to be in line with their Omni-Channel strategy, 2013 will be remembered as that critical year. Customers are becoming increasingly impatient and unforgiving. They are looking for fast, efficient and confident purchasing, consistent promotions and hassle free exchanges and returns regardless of which channel they use.
Year in review: Supply chain consistency and alignment are still posing a challenge for retailers, with integration between the channels sighted as the key inhibitor. In a study by RSR retailers are prepared to allocate resource to get the job done but are still not reaching the desired result. The study found that 54% don’t have a single customer view across the channels, 42% are yet to have inventory and order management working across the channels and 37% claiming that their POS systems are too difficult to adapt or align with the larger Omnichannel strategy. The study also reported that 35% of IT systems were not designed to incorporate customer’s insights into the business processes. The result was that businesses are still spending more time on operational issues than on strategic planning initiatives.
10) Data is king: Forget about what you think you know, this will be the year to prove it. With larger enterprises spending heavily on capturing, analysing and making the most of their transactional data, 2013 will be a big year for ‘Big Data’. Regardless of the size of business or the number of transactions, look for retailers to be putting strategies in place around business intelligence (BI) systems. Look for BI to be a big buzz for middle tier retailers.
Year in review: Data is no longer key, this year it was branded as “The New Oil”. A recent study by US group Infogroup discovered that nearly half of retail executives claimed that effectively using their current customer data is their biggest marketing challenge. In addition, 47 percent of retailers are unable to use real-time data to generate customer offers. Only 23 percent are sending out real-time offers. As pressure builds on retailers with so many diverse purchasing channels becoming available, look for 2014 to be even more of a data consolidation year as retailers look for innovative way to collect and aggregate consumer and transactional data.
So with a new year ahead, the challenge continues to improve sales, increase market share and improve path to purchase options to our customers. 2013 was a year of social market discovery, purchase channel improvements and a customer that is demanding our attention on their level, altering our visual aspect on the market.
Bring on 2014, Happy Retailing!