Connecting to LinkedIn...

Comment: Is 2012 a tipping point for Total Retail?


A new year has revealed old challenges for the retail sector, and not for nearly two decades have I seen economic conditions as tough as they are on today’s high street. However, I am looking toward 2012 with optimism because of a trend I trailed back in September 2011’s column: Total Retail.

Total Retail is an extension of multi-channel retailing, going beyond a smooth interchange of data and intelligence between click and mortar operations to merge multichannel supply chain, marketing and sales into one continuous shopping experience.

The explosion of mobile-based platforms, such as smart phones and tablets, is changing the retail market – we no longer need to walk to a shop or turn on our laptop, we can now buy a product while sat on the bus with our mobile phone. Shopper’s in-store can now browse the virtual shelves of the online store, as well as browse the shelves of various competitors.

Multichannel is now the norm and this was reflected in 2011 Christmas sales, with £7.9 billion spent online during December, showing strong 16 per cent year-on-year growth, according to the e-Retail Sales Index figures that we at Capgemini analyse on behalf of IMRG. Within this analysis, there were two revealing trends that I believe will come to define 2012 as a tipping point for Total Retail.

The first trend is the ubiquity of mobile devices and the influence of mobile phone payments. Over 10 per cent of our hits and 4 per cent of e-retail sales in the UK currently come via a mobile device, and this is set to boom as mobile devices increase in penetration and mobile payments becomes mainstream.

Although the technology is relatively young, we have seen household names such as McDonalds and Starbucks, which already accept contactless mobile phone payments, incorporate location-based services into their overall marketing strategy; bridging the gap between the virtual market place and the high-street.

The introduction of QR codes has to date been a dominant part of this movement, allowing retailers to commercially track consumers, provide ticketing and in-store labelling, as well as develop effective loyalty schemes. The inclusion of NFC in more and more phones, removing the need for a clumsy photo interface, will boost this still further. Mobile phone manufacturers have caught on to this growing market, with the likes of, Android and Nokia producing devices equipped with the technology; I am confident that Apple will soon follow.

A second trend driving Total Retail is the expansion of services allowing customers to order online and collect from their local store; luring shoppers back to the high-street and giving online retailers a physical presence for the first time. ‘Click and Collect’ has been a part of multi-channel retail propositions for nearly a decade and for some retailers, like Argos, they now make up 50 per cent of their e-retail sales. Debenhams has recently invested in in-store kiosks, branded Debenhams Extra, which is a new service that enables customers to access product information, check stock levels, and order and pay for goods while on the shop floor.

Customers can enjoy a new, diverse shopping experience with universal access to information and an infinite shelf – a convenient alternative to trawling around a shop in pursuit of a shop assistant, or waiting in line when the tills are busy. The idea of convenience shopping has been further developed by Collect+ – a parcel services company with a network of over 4,500 corner shops – that allows online shoppers to buy online and collect their purchases from their local newsagent.

The concept of a ‘Total Retailing model’ has encouraged retailers to embrace social platforms, such as Facebook, YouTube and Twitter, as an attempt to drive customer loyalty and increase conversion rates. ASOS, the UK’s largest online-only fashion and beauty store, is a great example of this. The retailer leads the way in many respects to online, with a section of its website dedicated to its ‘ASOS community’ – a socially diverse, interconnected hub of internet communicators and shoppers, with fashion blogs, forums, and viral marketing driving conversation and customer loyalty. A smart move for the retailer, with increased sales profiles, strong online position and growing customer base, ASOS has an evident edge over its competitors.

Today’s shopper is information-rich, choice-saturated and penny-conscious. Consumers are fickle, offering products they want is simply not enough – retailers need to go above and beyond to attract and retain customers – they need to adopt Total Retail.

Forecast figures released by the IMRG Capgemini e-Retail Sales Index predict that e-retail will continue to grow by a further 13 per cent in 2012. With this in mind, it is crucial that retailers take advantage of technology and consumer trends to ensure they deliver real value. The winners this year will keep their finger on the pulse, and their decisions based on the demands of their customers who will be merging the in-store and online shopping experience.

Chris Webster is Vice President, Head of Retail at Capgemini

Published on Monday 23 January by Editorial Assistant

Articles similar to Capgemini

Articles similar to Chris Webster

comments powered by Disqus
Top Feature