Retailers’ top 5 challenges for the year
Retail is a fast-paced, challenging and high-performance industry. The balance of power has truly shifted, away from sellers and toward the well informed, mobile, socially connected consumers.
Most retailers have not kept pace with the digital disruption that is transforming every industry. “The rules have changed,” says Anita Dorwald, COO, City Beach. “You have to be fast or you won’t survive. The key question we need to answer today is – how do we provide customers with a seamless experience regardless of the channel?” Many retailers are still burdened by repetitive, manual processes, legacy systems preventing them from focusing on fighting for the customer’s dollar and building great customer experiences while doing so.
Before you can solve a problem, you must recognise and understand it. We asked key retailers in Australia and New Zealand about the key challenges that impact their business.
1. High customer expectations
While storefronts are still a primary avenue of purchase, more and more customers are engaging with retailers on mobile first. Customers expect a seamless experience across all channels. Andrew Cromie, chief financial officer, Beaumont Tiles, says, “Customers want to do their research before they buy instore and our scan-and-play feature on the website allows them to see what would fit best in their home and we can call that information up instore and provide advice and assistance to buy.” City Beach’s younger customers often shop online and their expectations are constantly changing. “What is critical for us is understanding exactly where customers are at any given point in time and what they are looking for – whether it is the experience or the product or the price. All of it has to be on point for customers to stay loyal to your brand,” Dorwald adds.
2. Different channels have siloed data
An online presence is a necessity in today’s world, but many retailers host their online data on disparate platforms or legacy systems – completely siloed from physical stores’ data. This makes it difficult to track business in real time across the channels and retailers have to sync inventory, sales trends, and customer profiles between disparate systems, often with complex integrations. To truly operate an omni-channel operation, a retailer must be able to see and predict inventory issues quickly. “When we started this journey, we focused on building beautiful stores and stocking them with great product. But there was a lot of guesswork involved without the benefit of insights about what customers want,” says Dorwald. New Zealand-based retailer Citta Design has benefitted from integrating its systems to enable its ambitious growth plans. “A key benefit for us is improving our own internal processes through using the system, getting all our core data that would live in spreadsheets as best as possible into the system, so that everything can be managed and monitored,” says Grant Taylor, chief operating officer, Citta Design.
3. Too much data, not enough knowledge
Retailers have always had a wealth of data – but without analysis there is no insight to be gained from transactional and master data. They need to store, sort and analyse it and many retailers are not equipped to store and analyse data effectively, wasting an opportunity to turn the cost of managing data into business intelligence. A recent IDC report, pointed out, that by 2017, retail companies that take advantage of all their company data can potentially realise an additional $94 billion in revenue over companies that don’t. City Beach recently implemented Sable37’s retail management solution, built on the Microsoft Dynamics 365 platform. “We’re not flying blind anymore. We now know where our customers like to shop, when they shop, how frequently they shop, what they’re purchasing – all of that is crucial in making sure we service the customers’ needs and get the right product to them.” says Dorwald.
4. Sales associates lack access to customer insights
To be a leading retailer with best in class service, sales associates should be able to provide value-added personal services by using the information at their fingertips. Sales associates often lack access to the product information that is available to customers online, which diminishes their ability to have an informed, real-time conversation. Face-to-face contact in retail outlets is part of Michael Hill’s DNA, but Matt Keays, chief information officer notes “digitalisation should foster doing things faster and more efficiently” with staff provided instant access to information to support the sales process. He says the efficiency derived from using the cloud based Dynamics 365 for Operations retail solution means transactions can flow faster, with less human input.
“The transparency that an integrated retail management solution provides enables our sales staff to sit on the floor and talk to somebody about the quality of cotton sheets versus polyester sheets, the different characteristics that our products have, and use that as a tool to up sell, or just find the products that they actually want,” comments Taylor.
5. Staff are playing catch-up with backward looking information
Any issues in retail execution can impact the bottom line of businesses significantly. The manual processes that retailers still use prevent them from having the visibility and up-to-date data they need to proactively address problems. “Customers want things now. If you cannot give them the product, they will go elsewhere and find it,” says Cromie. With real-time access to data, retailers can react immediately to predict and prevent issues like stockouts or products available at the store failing to make it to the shelf. City Beach focused on a point of sale (POS) and customer relationship management (CRM) overhaul keeping the customer front and centre. “Dynamics allows us to gather data in a practical sense and really target our communications – EDMS and social interactions – and map out our website in 2017 to be more customer focused with that new insight,” Dorwald adds.
How, then, can retailers wade through these challenges? With a consolidated retail management system, retailers can bring their customer and merchandise information together. Staff can meet customer expectations by recommending the right products to the right customers, at the right time. A connected POS system can quickly connect customer history, loyalty status, product, and promotional information and provide the targeted insights employees need to have great interactions with informed customers. Advanced analytics enables retailers to quickly view key performance indicators and drill into data across channels to gain real insights and take actions.