Contribution by Ian Mooney, Retail Solutions Manager, Fujitsu Australia and New Zealand
If you’re a retailer, it would be understandable if you were feeling nervous about the future of your business. Retailers in Australia have been failing at record rates.1 Finding a way to buck the trend is therefore likely to be your top priority.
Retail isn’t just hard in Australia right now. Retailers around the world are struggling to compete effectively, and high-profile insolvencies have dominated the headlines. The latest big-name retailer to fall into receivership is the UK department store, Debenhams.2 It follows the American giant Sears, as well as iconic Australian brands such as Roger David, Marcs, Pumpkin Patch, and Toys ‘R’ Us.3
While the reasons for a business’s failure are rarely simple, it’s likely true that these retailers have struggled to compete effectively with online competitors and deliver an outstanding customer experience.4
Improving the shopping experience is shaping up to be the battleground of the immediate future
A recent study found that customer experience will overtake price and product as the key brand differentiator by 2020. Furthermore, 86 per cent of buyers are willing to pay more for a great customer experience, while 73 per cent point to customer experience as an important factor in purchasing decisions.4
Therefore, it’s clear that getting the experience right can help you avoid bankruptcy.
To compete successfully in 2019 and beyond, you need to understand how you can improve the shopping experience for your customers.
Here are five key trends that you should consider to improve the shopping experience:
1. New concepts and formats in-store can strengthen retailer identity
In Australia, discount retailer Kmart dramatically revamped its store layout, leading to backlash in the short-term but resulting in increased sales as consumers got used to the new-look layout.5 Arguably, the Kmart brand is stronger than ever in the wake of the controversial changes. In 2019, this approach is likely to continue with more retailers retrofitting stores with new, more appealing, and more experiential layouts designed to provide clear pathways for customers.
Some stores will look to mix physical retail with online elements, while others will create a collaborative or immersive experience.
2. Artificial intelligence will become mainstream
Artificial intelligence (AI) will help you leverage the vast amounts of information you have regarding shopper habits, drivers, and preferences. AI can help collect and analyse data from myriad sources, turning information into insights that you can action immediately. AI could even automate the action phase, so marketing teams can focus on higher-value activities and strategy. This will help you communicate more effectively, offer more successful deals and promotions, and attract more customers, all while reducing marketing costs.
3. Convenience and simplicity will be key
Regardless of reality, most consumers perceive themselves to be time-poor. When it comes to shopping, many are looking for low-key, frictionless experiences that let them get what they need faster. Self-service and self-checkout options are already here to stay, with interactive displays and smart fitting rooms just around the corner. With this new model comes risks, however, and you will need to improve fraud and theft detection.
4. Direct-to-consumer services could help win business from online
Value-added products such as meal kits that help people save time, for example, can attract customers because they offer something functional that is not available online. This lets you capitalise on store traffic, and leverage excess capacity by offering services that yield higher margins.
5. Physical stores will go online
If they haven’t already, physical stores will now build a digital presence. This can help capitalise on the growing consumer preference of researching items online before buying in-store. To make this model successful, you’ll need to integrate your systems so that customers are aware of what is available near them, for example. This will address the potential frustration customers feel when they see an item online but can’t buy it in-store because it’s not in stock.
Not all solutions will match your unique customer base, capabilities, or requirements. However, regardless of which of these approaches you adopt, the key defining factor will be the technology you use to unify the customer experience.
With the right technology, you will be able to seamlessly improve the customer experience and, potentially reduce costs. However, it’s important to work with an expert partner to maximise the value of any investment in technology and avoid undue risk.
Want to find out how Fujitsu can help you deliver outstanding shopping experience for your retail customers? Engage with a Fujitsu expert to learn more about our services and solutions for retail organisations.