Retail will be one of the most disrupted industries over the next 10 years. Period.
We’re seeing it play out before our very eyes, as Covid-19 continues to transform consumer behaviour. Locally owned stores, closed due to government-imposed restrictions, quickly adopted a digital strategy for order fulfillments. “Buy online, pickup in store” (BOPIS) and/or home delivery were deployed by many retailers around the world, across most industries, not only in fashion but also in grocery, home furnishing, DIY and department stores. The retail industry was already ripe for disruption, but this global health crisis certainly brought about major disruption in a much shorter amount of time than anyone was prepared for.
Who is most fit for change?
It is fair to say that the consumer-retailer relationship underwent a transformation due to the rise of e-commerce, introduction of new payment methods, and the peer-to-peer sharing economy (i.e. collaborative consumption). This introduced uncertainty for retailers, but also created new business opportunities.
However, I personally believe it’s only the tip of the iceberg, and the start of a much larger and fundamental transformation of the entire retail industry. Think about using new innovations like…
- Artificial intelligence (AI) to boost consumer loyalty and to optimise logistics
- Augmented reality (AR) to improve consumer experiences
- Facial recognition as soon as someone enters a store so staff can offer highly personalised services
- 3D printing to fully customise products on demand
- Drones to improve efficiencies for home deliveries
- The full deployment of digital services in everyday operations to communicate in real time with consumers wherever they are.
We are only on the eve of a massive transformation.
This leads me to the conclusion that the single most important differentiator in retail will be “adaptability”. The retailer that is the most adaptable will be the most likely to increase market share and grow their business. The extent to which a retailer is able to continuously adapt to new innovations and changing consumer demands ultimately decides who stays in business – and who fades away. That’s exactly why Forrester Research stressed in a recent report that retail leaders should focus on adaptability, i.e. “the ability to understand and anticipate market dynamics – and exploit opportunities big and small as soon as they arise”.
Prerequisites for adaptability
Logically, the next question becomes, how do I do this? There is no silver bullet that magically turns a traditional retail organisation into a highly adaptive one. However, there are a couple of considerations that will be critical to long-term business success:
1. Focus on the consumer
In the age of the consumer, every single strategic initiative must begin with the consumer at the heart of the process. Enabling robust data collection and analytics, with both in-store journeys and the channels used before and after, helps retailers build more in-depth consumer profiles and gain a better understanding of what a ‘consistent shopping experience’ looks like.
2. Digitise stores
Embrace a modular approach that includes the complete ecosystem of hardware, software and related services to reduce friction in consumer and staff journeys and at the same time lower total cost of ownership. We’ll see retailers continuously adapt their checkout mix to better serve a consumer base that’s more familiar with various checkout options, ranging from self-service and assisted service to mobile scan-and-pay, click-and-collect, curb-side pick-up and even drone-based home deliveries.
3. Foster openness
Offer consumers the end-to-end connected shopping experience they expect, regardless of whether the journey starts at home, on the go, or in-store. An open technology platform, with a set of standardised APIs for faster and easier integration, will allow retailers to adapt to upcoming technological innovations more easily, employing a collaborative multivendor strategy.
4. Be ‘always on’
Ensure that consumer and staff journeys are always up and running, and that they are secure. This requires a combination of remote and proactive service models. This includes proper system monitoring and extensive data sharing on system availability, and an intelligent correlation engine to connect the dots and facilitate root cause analysis in case something does go wrong. Combined with remote support services, this will maximise your gains and ensure you can guarantee a very high availability of your online and offline customer interaction points.
At Diebold Nixdorf, we have combined these four elements into one coherent business philosophy and change program, called Storevolution™. Continuous change and adaptability are embedded into the philosophy. Based on a vision in which consumers and their shopping journeys are at the forefront, Storevolution sets the parameters that provide retailers with a framework to be highly adaptive while maximising store efficiencies and improving consumer experiences. It offers retailers all the necessary tools, data and processes to design, enable and operate relevant consumer and staff journeys on a daily basis. As such, we believe Storevolution offers retailers everything they need to stay successful in the age of the consumer.
Curious to learn more about Storevolution and adapting your retail business for the future? Download our whitepaper “Storevolution – Retail in the Age of the Consumer”.