Retail is evolving from a single channel world of yester years to a more complex omni channel environment.Single ChannelCustomers experience a single type of touch point Retailers have a single type of touch point.This is a typical yester year model of using stores as the only channelMulti- ChannelRetailers channel knowledge and aspirations exist in technical and functional silos.Customers sees multiple touch point acting independentlyCross Channel Customers sees multiple touch points as a part of same brand.Retailers have a single view of customer but operate in functional silosOmni ChannelCustomers experience a brand and not a channel with in the brand. Retailers leverage their single view of customers in coordinated and strategic ways.
Customers do not interact with one channel.. They move across channel and expect the same experience across all channelsLet us take a simple example of a typical multi channel shopping experience. Jane wants to purchase a new dress for her anniversary. She is not able to make up her mind on which among the multiple new models to go for.Jane goes to a store and browses some dresses but could not find the right dress.The store manager tries to understand her requirements and ensures that she is notified when the new stock arrives matching her taste via emailShe tries to consult friends on Facebook to get feedback, understand the brand perception of the store and quality of their customer serviceThe retailer sends her a coupon on her mobile which Jane redeems and gets the dress delivered to her home
In an omni channel set up, customer is at the center of all business processes which deems channel irrelevant.The experience has to be that of:Buy Anywhere Fulfill Anywhere Return AnywhereChannel agnosticOptimized Fulfillment
Forces impacting Retail:Largely three major forces and changing the way retailers will connect with their customers and innovate their business models.These are:Empowered customerMobilityTechnology advancementsWe will discuss each of these in detail in coming sections
Customer is the KING.. Literally… There is no denying this fact.It is the customer’s market. Every retailer is vying for the attention of its customer and that dollar in his or her wallet because there is so much competition.
The customer behavior is changing rapidly. With the advent of internet, buying habits have changed.Forrester predicts that 53% of total Retail sales in US will be either online or influenced by web.Web now has a stupendous influence on sales even if the sale is offline.Even though 4 out of very 5 purchases happen in store, half of the purchases are influenced by the online activities & online brand equity of the retailer. The inference being customers are increasingly being influenced by online world
90% of businesses say the seamless cross-channel experience is critical to their business’s success.Customers are increasingly looking at experience which is channel agnostic.As an example here, the ipad serves as scrabble board and tiles are arranged on iPhones so that other players cant see them.Shows how apps are leveraging multiple devices
Retailers are leaving no stone unturned to ensure customer has a seamless experience across devices, across platforms and across different offerings.Responsive design - is an approach to web design in which a site is crafted to provide an optimal viewing experience—easy reading and navigation with a minimum of resizing, panning, and scrolling—across a wide range of devices (from desktop computer monitors to mobile phones).We have heard of picking up reading a ebook from where we left reading last. But take the case of Amazon whispersync. Simple yet elegant way of delighting the customer - The feature lets you pick up an audio book where you left listening on any kindle device for reading in text.
According to IDC, omni-channel shoppers, i.e., the ones who use all available channels simultaneously--store, call centers, web, social and mobile--spend 50% more than single-channel shoppers and 15-30% more than their multi-channel counterparts!This is a clear evidence that omni channel is the way customers prefer to shop.Its much more intuitive for them and they spend more dollars in such an environment
Dave Gray defines social media succinctly as – “A group of media producers that is primarily it’s own audience” Social media is a unique medium in that it is the only medium which allows two-way communication and gives the power back to the consumer to set the rules of the game. It is a highly connected virtual market with ultimate information democracy where interested customers are engaging with your brand and with each other in a non-intrusive manner.
The length of the shopper’s purchase journey varies greatly by category. But even within a spontaneous category like restaurants, we see thoughtful behavior of several hours to several days leading up to decision. •The number of sources used by any shopper for any average shopping occasion has almost doubled, from 5.2 to 10.4 sources used. •84% of all shoppers use ZMOT sources in the path to purchase (f. ZMOT is a critical part of any shopper’s purchase journey and is as important, if not more, than stimulus and FMOT. •Searching online is at the same level or eclipsing friends and family as a source used in the purchase process, which is a first. •While overall usage of online social and mobile sources are lower than other sources, they are on the rise. Among the group who use online social and mobile sources, they rank the mobile information as highly influential in shaping their ultimate purchase decisions.
Microsoft has seen decrease in demand for desktop Windows owing to a depressed PC market. During the quarter, global PC shipments fell 8.3 percent from a year earlier to 87.5 millionThe world is going Mobile… More and more mobile devices are now able to connect to internet. Mobile has become the next platform where big wars domination will be fought now.Mobile traffic will beat desktop traffic in volume by 2015. Large retailers have still not responded well to the Mobile challenge. It’s a different ball game altogether and they are struggling to provide the best service. Even facebook is facing challenges in pleasing its mobile subscribers.Smartphone adoption is growing so rapidly that by the year 2014 more than half of 24 billion visits to the internet will stem from smartphones , a Branding brand study findsMore than 40% of Smartphone users have already bought something using the phone.More than half of all consumers have already conducted purchases on a mobile device.More than three-fourths of all retail companies plan to invest in mobile this year.The retail market for mobile devices is expected to top $12 billion by 2014.The advantages mobile provides over e-commerce to customers are: Carrying out Transactions On the Go: Researching Brands and Prices: Smart Payments:
Still there are some retailers who have responded well and using Mobile to their advantage. Here are some examples:Apple has EasyPay – Why stand in queues when your mobile can act as Point of sale for you.Walgreens has used the scan feature in ‘Scan to Refill’ and it has become the most famous of its mobile app with huge adoption rates
This is a very novel concept of having virtual shelvesCommuters use their smartphones to scan for items on an interactive billboard using retailer’s free mobile app. They can then choose a delivery schedule for their items, thereby “making the most” of their commute.Initial tests of the service in Philadelphia and Chicago proved successful, and the concept has already been in use in South Korea for some time—mostly because Korean cities have less space for huge grocery stores. But what’s really interesting about this idea is its relation to other technologies, most notably smart fridges, which have also already taken hold in Korea thanks to Samsung and LG.
The mobile payment landscape is rapidly evolving with many different players, technologies and alliances all fighting to assert their relevance and control between the consumer and his money.The companies in the fray are:Credit card companiesInternet companies like eBay, GoogleFinancial institutionsHandset Multinationals….Ericsson, AppleWith billions of dollars at stake, the mobile payment market today is still muddled with multiple players but no clear, undisputed leader. There are two approaches in play. One uses embedded hardware in the form of a near-field communications chip (NFC) within smartphones, which requires an NFC-enabled merchant device to handle the transaction. The other is an app-based cloud transaction approachWhich model will work ??
This is the infographic showing some stats on the future of mobile payments
Technology advancements are forcing the retailers to think in innovative ways to reach out and understand its customers and also ensure the changes in underlying backend processes for an optimized and exhilarating experience for the customer
Advancements in voice recognition and network speeds have enabled new ways to communicate with the world which is much more intuitve and more relevant. Companies are rethinking the way we consume, create & share information and the tools we use for that.Google glasses - Project Glass products would display information in smartphone-like format hands-free and could interact with the Internet via natural language voice commandsCorning glass – Corning is making glasses which can be viewed to connect with internet and display information on the go
In 2011 alone, 1.8 zettabytes (or 1.8 trillion gigabytes) of data will be created, the equivalent to every U.S. citizen writing 3 tweets per minute for 26,976 years. And over the next decade, the number of servers managing the world's data stores will grow by ten times. - IDC Digital Universe studyAll this data about customer behaviour, actions, preferences is a gold mine of information for retailers to understand their customer better and design offerings accordingly.
These are analytics case studies – Used to explain how companies have tapped into the wealth of data to provide relevant offerings to the customer.Dominos created offers based on weather after analyzing that during rain more pizzas are ordered - Also helped the retailer to design capacity and workforce accordingly Target was able to figure out that a teen girl was pregnant just by analyzing her buying pattern, even before her father knew about it
Cloud has changed the way technology is used to enable by large and small retailers alike. IT maintaince is not the headache of the retailers anymore and can be outsourced to a more stable, competent partner.With services like Amazon EC2, shopify, magentoetc, anybody who has a innovative business model can become a retailer without putting in huge upfront IT investmentOnline Marketplaces are a great example where infrastructure of some large retailers is used by small retailers to do business
The possibilities are unlimited and there are many areas of improvement.Challenge the status quo and change the world of Retail