By Manish Grover, Senior Director at Mindtree Ltd.
Are there some lessons retailers can learn from the United States? According to Retailing Today, integrated retail or omni-channel commerce paid off handsomely for US sports clothing retailer ‘Finish Line’. They attributed their strong quarter performance to their strategies in omni-channel commerce and research shows that 37 percent of US shoppers preferred to shop both online and in store.
As retailers worldwide adopt the integration of online and offline, they are rewarded by customer preferences that clearly trend towards a multi-channel approach.
The latest and most widely adopted trends in integrated retail have been omni-channel commerce integrating both store and online for pick up and purchase, flexible payment mechanisms, brand specific programmes, store loyalty cards and of course mobile checkouts. While these have been great for customer experience, what will fuel the next wave of innovation?
Indeed, if we consider the maturity of omni-channel commerce, consumers are looking for a more contextual experience. In fact, all the frenzy over social and mobile, combined with intense competition for consumer attention is actually making it more difficult to get through to the consumer. Techniques that worked in the past no longer do. In addition, for the consumer, the research and comparison shopping sites are faster than ever before and even instantaneous through the omnipresent smartphones.
The next wave of innovation appears to be a problem that must be tackled on two fronts:
Development of context
Integrated insights to drive personalisation and support a multi-channel consumer interaction pattern is the first problem to solve. Even as big data technologies are gaining acceptance, their integration with digital and in-store consumer engagement is a problem that has not yet been fully mapped. Technology implementation is still in isolation, as is the linking of various customer touch points. And, not only must data be integrated, but it must be meaningfully used to establish a dialogue with the consumer, instead of having to restart the conversation every time the medium changes. Always on – that is the mantra for retail today.
While personalisation and the multi-channel retailing experience will provide the necessary foundation to positively boost performance for early innovators, the advantage must be sustained by solving the problems of attention deficit and competitive comparisons, especially as they come down to price.
How will retailers escape the “me-too” syndrome to reduce the incentive for consumers to comparison shop? The retailers’ dilemma extends to brand organisations as well, who must constantly spend more to build brand loyalty even as their unit margins see continuous decline. Segmentation and customisation seem to be potential solutions, combined with reducing the friction in the commerce process through an omni-channel approach that places emphasis on the consumer’s broader context. Both of these will improve stickiness, improve how a consumer identifies with their retailers and ultimately enable competition on factors other than price and free shipping.
Consumer preferences haven’t changed. Consumers are just adapting to the new mediums of interaction, and enjoying the flexibility that the increased competition is providing them.
In a rapidly evolving industry, there will always be innovators and followers. What’s crucial is to begin thinking about the ecosystem we want to build with our customers.