Consumer expectations set to skyrocket
Confidence in Australia remains relatively high, with consumer spending in Australia continuing to grow year on year, and the latest Christmas shopping period hitting record spend levels.
It is estimated that Australians spent $45 billion in the six weeks leading up to Christmas, accounting for approximately 60 per cent of Australian retail sales for the year.
Despite this, consumer expectations are changing. A study by Manhattan Associates in Australia has found there is a growing gap between consumers’ expectations and retailers’ capabilities when it comes to delivering a great shopping experience.
This is increasing pressure on retailers to offer new services to customers in order to retain market share.
Raghav Sibal, MD Australia & New Zealand, Manhattan Associates, said that today consumers are firmly in the driver’s seat.
“They expect to receive and collect goods how and when they like, and no longer hold the same loyalty to a brand they once did. These circumstances suggest a sea change in the industry,” said Sibal.
“This year we believe there are five key areas that retailers must think about in order to meet the market head on and emerge profitably, come 2016.”
These five focus areas are empowering the retail assistant, creating a virtualised single stock pool, reducing wastage on returns, embracing millennial driven innovation, and putting a face on every order.
Solving these issues will strengthen retailers’ customer relationships, which will drive loyalty and revenue.
Empowering the retail assistant
Customers use all available sales channels to buy products and expect continuity of service and information across them. Whenever there’s a problem, however, they will most likely head to a store and ask a retail assistant for guidance. Very few employees on the shop floor have visibility of inventory beyond the store stockroom or of a customer’s transaction history and buying preferences.
But once back end systems are connected, it’s easy to extend this information out to the shop assistant through a smartphone, tablet or instore computer terminal. This information can help answer a customer’s questions and deliver a resolution at the same time as presenting a cross sell or up sell opportunity – all while the customer is still in the shop.
Creating a virtualised single stock pool
Too many retailers experience the pain of false out of stock and 40 per cent of retailers still have inventory silos. If customers can’t buy inventory that’s really available, everyone loses.
A single inventory pool combined with a customer order management system allows stores, warehouses, logistics services providers, and manufacturing suppliers to work closely together to get products into the hands of consumers at a time and location that’s convenient to them, and in a way that’s also profitable for the business.
Reducing wastage on returns
Trying to effectively manage the returns process, arguably the biggest determinant of profitability of online sales, can be frustrating. Many saleable goods sit in the reverse supply chain, invisible to the rest of the business and unavailable to the customer, no matter how much demand there might be for that product. The single inventory pool, and an order management system that draws upon it should extend to the reverse side of the supply chain. Once that is in place, it’s an additional way to offer up a sale that would otherwise be missed.
Embracing Millennial driven innovation
The winners in the years ahead will be those companies that are best positioned to capitalise on wherever the commerce revolution leads next. Retailers will need to use every tool available to jump on new purchasing channels as they appear and make them profitable. Catering to the digitally enabled lifestyles of Millennials will be one of the paths to success in the coming year. The consistencies of knowing where your stock is and being able to present it, sell it and deliver it to the customer are never going to change.
A face on every order
Customer centricity is the primary route to success in the current retail environment. As consumers become more and more tech-savvy, they expect to have information at their fingertips. As such, retailers will have to perform in new channels, offer more options on delivery and returns, and be held accountable for their customer service and communication. Now there is so much revolving around the customer, it’s important to make the process and experience as convenient as possible.
Retailers often establish a process and think that it’s job done, however, if someone collecting an order instore has to wait for 40 minutes in a queue before they can get it, they won’t click and collect again.
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