Consumer-Connected Retail: Attracting, Winning and Keeping Profitable Customers


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The retail models of the past are dying rapidly and your customers will move on if you don’t revitalize the customer experience now. It is time to be a leader — not a follower — in this retail revolution. Your livelihood depends on it. In this thought leadership article, Wayne Usie, SVP of Retail for JDA Software shares his insight on the new generation of retail solutions and how they enable retailers to sense challenges or opportunities up front and implement plan changes iteratively mid-cycle. This model makes optimal use of retail systems that automate processes and offer recommended actions based on data calculations without requiring users to know and select appropriate algorithms or other necessary criteria.

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Consumer-Connected Retail: Attracting, Winning and Keeping Profitable Customers

  1. 1. Th ought Lea de rshipConsumer-Connected RetailAttracting, winning and keeping profitable customersB Y Way n e U s i e , s e n i o r v i c e p r e s i d e n t, R e ta i l C onnected, “always-on” consumers are the driving force in retail today. The information they need to make a buying decision can be found in mere seconds. Blogs, websites, online reviews, video rants — and raves — all provide instant insight that shapes what they buy, when and where they buy it, and at what price. Empowered and emboldened, these connected consumers expect personalized relationships and offerings delivered through flexible options. They are driving the next generation of retail, prompting retailers to examine all facets of their businesses as a means of survival. Retailers need to meet the demands of this new consumer while ensuring a positive, consistent shopping experience across multiple channels. In order to remain competitive, companies must adapt and center their organizations around consumer- centric processes and organizational alignment. Today’s retailers must be able to operate in real time to avoid being left behind. Then and Now Traditional retail processes have been product focused, based on consumer behavior largely driven by an in-store experience, the opinions of a few friends or family members, and possibly a mass market advertising campaign. As such, retailers made strategic business decisions using the answers to these sequential key questions: • What should I sell? • Who is my competition? • What are my constraints? • Where should I sell this? • Who is my customer? A focus on supply chain efficiencies through the years has helped some retailers keep pace. They have adopted some level of sophistication that allows for better demand forecasting, enabling new efficiencies in planning, promotion, pricing, inventory management and transportation. Integrating processes, technology and organizational structures has enabled another level of efficiency, yielding lower costs and quicker cycle times. Yet these traditional, linear processes focus on product — not the consumer — making it harder and harder for retailers to stay relevant.
  2. 2. Th ought Lea de rshipToday, retail change is being driven by the consumer who This requires a new approach — one that allows retailersexpects instant information, a multitude of choices, and to attract, win and keep profitable customers. It requiresflexible, real-time purchase and delivery options. This Consumer-Connected, empowered consumer is driven by six momentsof influence that present retailers with opportunities forsuccess — and failure. They are: The Next Generation: Consumer-Connected Retail Awareness — Consumer awareness happens in Success in a consumer-connected environment requires both traditional and non-traditional ways, including decisions based on insight into data, instead of decisions advertising, store displays, promotional emails, web based on a combination of art, intuition and system- banners, lifestyle blogs, etc. provided data. While retail systems were originally built to support activities that planners engage in, they now Exploration — With access to instant product and need to provide the intelligence to do those activities service information from hundreds of sources via their themselves. Automation is a key component in this move home computers or mobile devices, consumers can from person-specific decision making to process-centric search for products like never before. and system-enabled decisions. Retailers still want to “set the dials,” but will rely on their systems to do the heavy Comparison — Consumers can comparison shop lifting and provide recommendations — or better still, online without ever leaving their homes, or instantly execute those recommendations to completion. check out competitor pricing at the store shelf using their smartphones, making product and pricing Retailers must also shift from sequential to iterative transparency an expectation. processes, allowing for faster adjustments to market changes and supply chain disruptions in real time. Socialization — The rapid rise of social media such as Sequential processes can slow things down, often Facebook, Twitter, YouTube, etc. means that consumers requiring that retailers wait until a cycle is complete before have access to thousands of user opinions — both they can make plan changes. For example, a company positive and negative — prior to making a purchase executes on an assortment in the beginning of a season decision. but then finds it is unable to source a percentage of the assortment, and has to re-plan that portion of the offer. Selection — Multi-channel shopping offers consumers with many options for where and when a product can Thus, it is critical to evolve to the next level in continuous be purchased and delivered. integrated planning and execution. The new generation of retail solutions enables retailers to sense challenges Communication — After completing a purchase, or opportunities up front and implement plan changes customers can return to the social media sites that iteratively mid-cycle. This model makes optimal use assisted their search to share their experience and of retail systems that automate processes and offer opinions with others, promoting awareness and further recommended actions based on data calculations without influencing the buying decisions of other consumers. requiring users to know and select appropriate algorithms or other necessary criteria. These systems also graduallyWith the customer firmly in the driver’s seat, how can a “learn” and apply these lessons to help effectively manageretailer adapt and succeed? They must: the retail enterprise more dynamically and with reduced cycle times.• Manage their business with a consumer — versus a product — focus Building a Foundation on Customer• Adapt their culture to support a seamless, consistent cross-channel experience Experience, Product Lifecycle and Channel Synchronization• Gain a multi-dimensional view of the customer Success in a consumer-connected retail environment• Eliminate ineffective and disjointed planning processes starts with a strong foundation built on the simultaneous management of customer experiences, product lifecycles• Quickly respond to consumer demand with an agile and and channel synchronizations. These three inter-related optimized supply chain pillars support a company’s integrated planning and
  3. 3. Th ought Lea de rshipexecution processes. Strategy and plan information can Product Lifecyclethen be leveraged in a retailer’s systems to map to eachstrategic area and process in an iterative — instead of In managing the product lifecycle, companies create andsequential — design that supports automation. The ability introduce a new product; leverage their channels to moveto manage the strategic customer, product and channel it into the marketplace; promote, manage and grow it —cycles in a continuous fashion that fosters the natural and at some point, exit with clearance markdowns. Theconnection points between these pillars is critical to empowered consumer drives the process, ensuring thatachieving success in consumer-connected retail. this cycle consists of much more than simply determining what assortment to carry each season. Offering the rightCustomer Experience products to the right consumer with the price, channel and delivery options they desire requires a true understandingCustomer experience is the most dynamic of the three of consumer demand and a personalized strategy acrossstrategic pillars and drives activity in the product and consumer insights, planning, analysis, promotions andchannel cycles. In managing the customer experience, distribution.companies must identify the consumers interested in theiroffers, market to those consumers and work to convert Channel Synchronizationthem into buying customers. They subsequently manageand nurture those customers to maximize retention and Channel synchronization consists of seamlessly managingloyalty by catering to them on an ongoing basis with their the details in delivering product to the customer. Channelsbrand and an offer that is of continuous value to them. evolve, ebb and flow — and sometimes retailers need to restructure channels and rearrange product flow.Engaging today’s consumer is increasingly centered on a Managing this cycle involves the synchronization of twopersonalized approach and direct relationship. Shoppers subcomponents:want to know that a retailer is listening to their input, is • Sales channel: Includes stores, mobile, Web, wholesaleaware of their needs and is taking action to customize and catalogofferings accordingly. With customer insight and a deepunderstanding of consumer behavior, retailers can tailor • Delivery channel: Represents the process of movingpromotions and sales tools to specific shopper preferences product from the vendor or manufacturer throughbased on what motivates particular customers. the distribution network to the store or directly to the customer as appropriate
  4. 4. Th ought Lea de rship While much effort has been made to capture customer transactions within business intelligence tools, retailers still struggle to deliver that knowledge in real time to those interacting with customers. JDA® Customer Engagement, delivered by JDA® Cloud Services, is designed to deliver a customer experience that not only builds loyalty, but is profitable too. A single solution that addresses omni- channel commerce and optimization logic in real time, it helps manage not only how retailers deliver goods to customers, but also the supply chain alignment required to effectively supply those goods. Customers Won’t Wait. Why Should You? Traditional retail processes and systems to support those processes are built around putting the right product on the right shelf at the right time and at the right price. The only problem with this “push” model is that it is built on the premise that if you get your offer right, customers will come to you and buy from you. Today’s consumers — hyper-connected and seekingOptimal management of this strategic pillar results in instant gratification — don’t have the time or patiencethe ability to consistently — and profitably — offer for this old way of retailing. They comparison shop usingcustomers the products they want across all channels and their mobile devices. Armed with information, theywith seamless delivery, whether it be buying online with feel empowered to negotiate with your in-store salesin-store delivery, expedited one-day delivery or other associates. They expect you to give them what they want,possible scenarios. where and when they want it. They expect to be able to shop seamlessly at home, in-store, in fact everywhere! They expect you to engage with them, not just put products inThe Anchor: Customer Engagement front of them.Retailers seeking customer-centricity in every interactionhave much to consider, including: Don’t become a victim of the rapidly changing world of customer engagement. The retail models of the past are• The increasing frequency and scope of demand shifts dying rapidly and your customers will move on if you don’t within planning cycles, which commands intelligence revitalize the customer experience now. It is time to be during execution to ensure customer satisfaction and a leader — not a follower — in this retail revolution. Your profitability livelihood depends on it.• How to deliver endless aisles — sourcing and delivering from the broadest network in real time to offer greater assortment flexibility and to cement loyalty Wayne Usie is senior vice president, retail, JDA Software. In this role,• The need to empower store associates with customer, he is responsible for strengthening product and availability information that is equal or executive-level relationships with superior to that accessible to consumers, allowing for JDA’s retail customers and key increased customer satisfaction prospects.• Inventory allocation flexibility and utilization control to meet growing demands | | +1 800 479 7382