With today’s consumer becoming ever more demanding, companies are rushing to ensure that they don’t get left behind in the new world of e-commerce, marketing and big data which will allow firms to personalise offers to customers on a level never seen before. Malcolm X said: “Tomorrow belongs to the people who prepare for it today.”
Three directors from Britain’s leading outlets tell Retail Gazette what they think the future of shopping will be.
Graham Stapleton, CEO, Carphone Warehouse UK
As technology evolves, retailers are constantly striving to find new ways to capitalise on the opportunities which technology can bring, and it’s exciting to think about what is ahead for the UK’s high streets.
A few years ago we saw a huge boom in online retailing, and whilst the success of e-commerce continues, what we are starting to see now is a resurgence of the high street. This is good news for the UK economy and retailers alike but what should retailers do to maintain this momentum?
In order to attract footfall to the high street, retailers have realised that they need to give customers a real experience, as consumer demand for brand engagement is paramount. Technology is a key driver in this trend and will continue to impact the direction of the retail industry, as increasingly sophisticated tech hits the market. We’ve already started to see competition hotting up between retailers as they compete to give customers the most innovative experience possible, creating brand differentiation and driving customer loyalty, and we’ll definitely see more of that in years to come.
What will be really important – and potentially challenging – is that retailers will need to strike a balance between technology and face to face expertise. Our consumer research shows that, of those customers who are in the market for a new mobile phone, 51 per cent want to talk to someone face-to-face, while 52 per cent want to touch and feel a handset, prior to purchase.
Even though technology has impacted the retail industry in ways in which we could never have imagined, the high street is still very relevant. At Carphone Warehouse, we recently launched our award-winning customer retail experience, Pin Point, which is a tablet-based tool designed to give customers a personalised recommendation based on their own individual needs. It combines state of the art tablet technology – bringing elements of the online experience in-store to create a true omni-channel journey – with face-to-face expertise, which we know customers want. We’ve seen our customer satisfaction soar to 90 per cent since the launch which proves we have the right balance.
Consumer behaviour is changing rapidly, largely due to the way in which technology has permeated our lives. The survival of the high-street will be down to retailers responding to these changing needs and creating a seamless online and offline journey, as we have done with Pin Point, to give customers a complete onmi-channel experience of their brand.
Chloe Macintosh, Co-founder and Creative Director, Made.com
Whilst there are many changes impacting retail, the one thing that won’t change is its number one focus; the customer. We’re dawning on a golden age for consumers as they become more powerful than ever – and retailers need to stay ahead.
Online Marketing is an area that has to evolve alongside the consumer trends. Good brands are increasingly focusing less on acquiring new customers but instead adopting an end-to-end approach which shine a spotlight on their existing customer base. We use existing and new customers to identify needs for specific products and get them to decide what we should sell.
Consumers have really found their voice and are taking the lead. With a new collaborative economy, consumers are now prepared to share their belongings with others whether this be their home, their car, their clothing or even their dogs – brands need to understand the philosophy behind collaborative consumption and move with it. At Made.com we’re planning a major project that will connect new and existing customers with their own homes for example, giving context and feedback through a unique new experience.
Customers will also increasingly benefit as more retailers streamline their operations. The internet has allowed a lot of efficiency and a cost effective approach but we are getting used to better prices and better service. Being able to build a brand and offer a unique proposition is the survival game for new online e-commerce companies. There is a big move toward curated experience where directional selection rather than quantity is creating customers retention as well as customer acquisition.
In support of this need for efficiency, our vertically integrated process means we achieve exactly that as we control and own all processes, from design to distribution. We not only pass on cost savings to the customer, but can bring products to market much quicker. Consumers want new products and fast so more brands will need to streamline in this way to remain competitive.
Donna Chen, International Online and Digital lead, Alliance Boots
Subscription services will grow because it taps into the convenience element as we are living increasingly busy lives. We, as retailers, have to be aware that a lot of what we sell are commodities. Certain things like toothpaste, toilet roll, bin liners and milk – why not use subscription services to deliver? What the consumer will buy week-in-week-out will be the same things so a lot of those commodities will be automated.
Google Glass, which I’ve had the opportunity to wear, is adding more of a fun element and convenience into our lives but I think for Google glass to become part of retailers’ fundamental operations it will take some time. It’s almost like having a hands-free mobile phone as consumers can ask “How much will Chanel face cream cost in a Boots store?” so that will push retailers to be much more price transparent.
Click and collect is currently developing due to a need from the consumer for convenience. We talk about omni-channel as a buzz word but its true meaning is to deliver end-to-end, seamless customer experience across the channel. Whether it is convenient for a customer to pick up their online order from their local post office, tube station or near their home - click and collect will stay.
Across the board in retail, self-service check outs have to be improved, especially the accuracy and the functionality of the machines. The payment aspect could also improve to feature mobile payments, digital wallet and touch cards etc.
Supply chain will become the key issue in the retail sector. For example, if I have a headache or flu I can’t go out so I need a product with me in the next couple of hours. If a retailer cannot do this then they will fail in the future.
If you go to a Topshop in Oxford Street they now sell cupcakes in-store while in Europe some of the grocers and health and beauty stores have a beauty salon concession. This shows that across the board, retailers are trying to engage the consumer and keep shoppers in-store. It’s about building an ecosystem that provides a need and that is thinking on their behalf.
I don’t think the store will completely disappear and that e-commerce will completely take over. But some categories will change. Online penetration in the health and beauty category is quite low compared to books and DVD’s but has the potential to grow faster than any other category.