RE-Tail & Invent The R’s Of Retail
RE-Tail & Invent
The R’s Of Retail
The outlook for the retail industry has changed due to the COVID pandemic. While the industry has been customer-centric since its inception, the shift to consumer relevance is subtle. The new normal is a place where customers feel safe, transparent, and empathetic. This means that they expect personalized, tailored shopping experiences that are more relevant to them. Businesses must transform their operations if they want to remain relevant.
These trends are driving the fundamental principles for consumer relevance for Retailers. They revolve around the 3 R’s of success Recalibrate, Define, and Reimagine
As consumer preferences change, so does the analysis and baseline understanding of their profiles. Retailers need to reevaluate their understanding and analysis of consumer behavior and go back to basics when it comes to Big Data and new data streams that drive consumers and markets in real-time.
Businesses need to adapt to this new reality by introducing new technologies that enable them to sell and differentiate their products. Now brands have the ability to access new profiles of shoppers that they had not previously.
Convenience is the key. Shoppers are increasingly turning to social shopping platforms for their shopping experience. Businesses should consider offering seamless services that they can use on any device. Innovative customer journeys are made possible by innovative payment models and themed shopping experiences.
We are moving towards the next stage of recovering from the pandemic as well as forging new partnerships. Stay tuned for more information about how to stay relevant in the age where the new normal is being established
Three ‘Rs’ of loyalty
Every generation needs a revolution. And loyalty marketers are in the midst of their own revolution. We are at an important moment. This is a time of financial, technological, social, and industry changes that are transforming the industry.
Although the opportunities are endless, the challenges are overwhelming and the risks daunting. The keys to success can sometimes be confusing. There is no single way to be successful, but there is one simple formula that will help you get there. It’s the Three R’s.
The first R stands for Reward
It’s a tangible way to say thank you to people for their efforts in changing their behavior. Also, it allows you to gain insight into consumers’ values.
The second R is Recognition.
Apart from issuing hard loyalty currencies, you can also show appreciation to your customers with gestures such as “We appreciate that you gave us your business” or complimentary upgrades or preferential booking status. You may also give them access to special events or first-class access to other benefits. The expectation of recognition is higher for today’s “best customers”, who have grown to expect recognition.
However, loyalty’s future is centered on the third R – Relevance.
Traditional channels of communication have become increasingly fragmented and sidelined by mobile and social media, making it difficult to connect with consumers. Consumers are bombarded with information and multiple messages. People feel overwhelmed by information. You can make this environment more engaging by making connections that demonstrate you are interested in their lives and the things you care about. You can be, in a simple word, relevant.
In today’s economy, where attention deficits are rampant, the ability to maintain relevance is what will determine who wins and who loses. A COLLOQUY study revealed that only 32 percent of U.S. consumers rated reward programs communications as an 8 or higher on a 10-point scale to measure their personal needs. This shocking statistic means that far too few of the emails, mails, and Facebook messages we send our loyalty reward members are reaching the right audience.
What can we do to improve our performance?
The relevance revolution is happening when we listen to the heartbeats of our members. Today’s consumers are keenly motivated by sustainability, wellness, and the desire to live a meaningful life.
I see loyalty programs as a powerful tool for encouraging consumers to make responsible choices that are good for the environment, themselves, and their communities. By expanding into new areas that have member relevance, such as non-profits and government, loyalty can reach a wider market and drive social consciousness. These partnerships open up companies to large membership groups that weren’t possible a few decades ago. However, thanks to new database technologies, they are now easily accessible. To reach consumers effectively today, it is necessary to expand into these non-traditional sectors and into the public conscience. This allows customers to engage in strategies that not only address their immediate problems but also reflect their larger ambitions.
3 R’s of Digital Retailing
What does “Right Time” mean today? Supply Chain Optimization
The ability to ensure that key items were always in stock was the foundation of huge retail businesses. These items are known as the bread of the retailer or the loss leaders. They often provide the basis for larger purchases during a customer’s shopping trip.
If a customer realizes that an item is never out of stock, he/she will continue to visit the store. This could lead to a relationship and help with sales associates who may be able to assist the customer in purchasing additional items.
This cycle starts with the “never-out” item. A customer will keep coming back to a store because they know a certain item will always remain in stock.
How can a small business owner avoid having a customer ask if they have any of ‘X?’ only to discover you’re out-of-stock?
The quick answer is often, “We can order this for you from our site and have it shipped directly to your home.” Unfortunately, when that happens, customers are forced to leave the store and look for a substitute.
Harvard Business Review(r), has done studies in the past and found:
* Between 7% and 25% of consumers will shop but not buy a replacement item.
If customers discover an item is not in stock, they can cause retailers to lose half of their sales.
* The majority of out-of-stock issues are caused by retail outlets. 72% of all stock outages were caused by poor replenishment or in-store ordering. Refillment problems or planning problems in supply chains are only responsible for 28%.
Retailers can take steps beyond offering to order/deliver out of stock items for customers. Use your data.
How do you determine the right item? Analytics Powered Retailing
Retailing isn’t about what the retailer wants to do, it is about being able to listen to the customers. No more silo approach to retailing that offered the same product range, at the same prices, in every store. Little attention was given to localization. Localization is essential in today’s omni-channel world to increase customer engagement.
Retailers need to shift towards customer-centric strategies, assortments, and merchandising category that are based upon customer-specific behavior, preferences, and demands. Retailers must be able to use all information channels — social media, brick-and-mortar, and web — to create a customer-centric merchandising strategy.
You’ll need to analyze your sales data and track inventory data to determine which trends are being reflected in your store. Retailers should:
* Align customer preferences with inventory and merchandising strategies. Are you stocking or selling the items your customers ask about?
* Implement analytics and reporting tools that allow merchandising departments to analyze and predict customer preferences and behaviour. Not only can you track which products are selling, but also which areas of your store are generating strong sales.
New strategies are needed to help retailers determine the optimal merchandise assortments as omni-channel shopping continues to grow exponentially. Digital does more than drive ecommerce. It gets people in the brick and mortar shop.
The influence doesn’t stop once a customer walks into a store. Many shoppers who use their phones to search in-store say that they have made it an integral part of the shopping experience and product selection. Customers can now use their smartphones as their “personal shopping assistant” once they are in a store.
Understanding who your omni-channel customers is essential to help you engage them. Understanding your ideal customer means knowing their demographics, gender, location, search habits and where they shop in-store.
Once you are able to identify these important customer characteristics, it’s time to take steps to create a seamless shopping experience which leads to a sale.
How to determine the right price: Adaptive pricing
It was common for retailers to lower the price to make more gross margin dollars. But that is no longer the case. Instead, retailers are taking cues from airlines that have been pricing their merchandise differently for many years.
Are you a frequent traveler who has made a booking on an airline website and found the schedule and price you like, only to find out that the price has gone up $50.00? If you answered yes, you are experiencing adaptive pricing. Also known as dynamic pricing. Adaptive pricing means that the price adjusts precisely to the demand at the exact moment it changes in a region or geographical area or, in the case for airlines, on a given flight. This type of pricing was first introduced to retail by large-box stores in early 2015. It has since gained popularity, especially among online-only sellers.
To successfully implement adaptive pricing, retailers need to fully leverage the wealth of information they have about customers in all their databases. This includes their loyalty and POS data streams. In order to quickly implement an adjustment, retailers need systems that can instantly adjust the price. Although it takes a lot of planning and organization, this is a way for retailers to stay competitive.
In the age of e-commerce, adaptive pricing was easy to implement. Individuals’ IP addresses could localize price changes and adjust them accordingly. Before Electronic Fixture Signs were introduced, adaptive pricing was a labor-intensive process that required changing the printed signage. But, thanks to technological advances and greater flexibility, this is becoming easier.
These fundamental principles of retailing, known as the “three R’s”, are still relevant in today’s omnichannel world. Retailers today face the challenge of maintaining adequate inventory levels to support ecommerce fulfillment, Click and Pick fulfillment and the fulfillment of in-store customers looking for that “never out” item.
While that customer is shopping, most likely they are using their smartphone or “personal shopper” to compare pricing and availability. The complexity of maintaining inventory levels today is greater than ever, as these inventories have to include the omni-channel universe. These additional channels and demands require that the supply chain, as well as merchandising and allocation systems, be improved.
Retailers can use data mining applications to determine customer preferences and analyze shopping patterns in order to develop adaptive retailing plans. A strategy can help retailers maximize profits for brick and mortar and e-commerce sales.