Overall the investments in digital commerce, merging the channels and blurring the lines for customer experience will increase including a focus on social media, digital marketing and achieving a single customer view. Here are 5 key areas where we will see an evolution;
1) Online ordering with ‘drive through pick up’: As an initiative to promote the benefits of using multiple channels supermarkets in Europe have started introducing the option for customers to pre order online and pick up at dedicated drive thru environment (similar to a loading dock). This style of commerce makes practical sense for Australian FMCG business. With many supermarkets located within centres it would be a more efficient option for those with limited time to allocate to regular shopping. Last year Woolworth’s provided the option for Melbourne airport passengers to order fridge and pantry supplies up to a week ahead then grab them on their way home via a location outside the Park Royal Hotel. This initiative is expected to be trailed in 2014 at suburban locations as the group try and increase convenience to customers.
2) A renewed focus on supply chains and stores: It’s easy to get caught up with the buzz of online commerce and forget that 90% of consumer sales are made in store. This means that evolutions in the supply chains of Omni-channel retailers will be a key consideration for 2014. Ensuring there are channel consistencies and operational efficiencies in place will enable retailers to be more strategic in their planning and less reactive. Retail System Research recently conducted a survey that discovered that 42% of retailers 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 Omni-channel strategy. Many SME’s will be looking closer at integrated solutions that can provide a consolidated platform to streamline operations.
3) Stores layouts are turning digital: A number of retailers indicated that they would be looking at altering the structure of their stores in 2014 with David Jones actually opening their first ‘Village Style’ store in September 2013. This Village Store is a new format that will feature digital charging stations, complimentary customer Wi-Fi, an interactive tweet mirror and customer dwelling areas along with dedicated in-store areas to purchase merchandise online as well as collect online purchases. It’s unlikely that there will be a big bang uptake from all level of retailer, but look at 2014 to be a year of adoption.
4) Online research is evolving: With so much information available online, 2014 is not only becoming noisier but making it increasingly difficult to source creditable, non-bias facts about product and services. Smart retailers are now starting to provide more thought leadership content through customer blogs and free programs providing value back to the market, without the direct marketing pitch. For example Lorna Jane is growing their customer base by building up advocates through their free personalised improvement programs. Websites like howstuffworks.com just put the facts out there, empowering customers to ask the appropriate questions. Look in 2014 for more retailers to evolve their message to the market.
5) Data is the new enabler: A number of key influencers in the retail industry have been bouncing the phrase that data is our new oil. Supporting this is Gartner who have made two supporting predictions for the coming year. Business intelligence and analytics will be the No 1 priority for CIOs next year, followed by mobile technologies and ERP applications also that sales representatives that leverage data on a day-to-day basis stand to increase revenue productivity by 17%. Look for Omni-channel retailers to come to terms with what data structure and possibly big data means to their business. Whether it be through capturing more tactical localised intelligence or implementing a business intelligence solution.
So with an exciting year ahead, the challenge to improve sales, increase market share and better service customers won’t change, but there is a more knowledgeable, information savvy customer evolving so the landscape is changing. In 2014 technology will become a great enabler as retailers we find ways to advance our methods of listening, adapting and revealing more insightful experiences to our intelligent customer.