Agility Will Win the Retail Renaissance
Consumer brands are working feverishly to gain a foothold in today’s rapidly evolving retail landscape. From transforming in-store experiences to offering a multitude of options for delivery and pickup, companies are working hard to meet changing expectations. Many elements play a role in the success of consumer brands, but the most important is the ability to be responsive to customer demand.
To do that, it’s essential for companies to lean heavily on digital assets to understand their consumers' buying habits across geographically dispersed stores and shoppers.
Taking a look at the retail landscape so far in 2017, we’ve seen a lot upheaval. The market is evolving at the speed of light and companies are scrambling to stay ahead of consumer expectations — I like to call it the “Retail Renaissance.” With all the change, some companies are having real challenges meeting demand. According to “Merchandising 2017: The Real and the Unreal,” a recent report by Retail Systems Research, companies cite three things that create the most concern: understanding consumer preferences, out-of-stock items, and underperforming inventory.
Specifically, many companies are having a hard time balancing the expectations of what currently is the largest buying generation: millennials. Data shows that millennials prefer to have more tailored, curated experiences — yet they're also attracted to the prices and variety offered by a bigger-box retailer. This data is confusing for brands and, taken in a broad snapshot, can lead to ongoing difficulties. To marry these expectations, it’s critical that brands take advantage of technology as a differentiator to help better understand buyer expectations and meet demand.
Specifically, they should leverage:
Better Data Quality & Availability: Many companies are still operating off fragmented systems, without a single version of the truth. Having an accurate snapshot of the entire business that can then be segmented and analyzed by market is critical. Without a holistic view of consumer demand, the organization is bound to make misguided decisions that jeopardize the broader operation. Ideally, long-term planning is then built on top of this data.
Granular Analysis: New analytic methods provide promising opportunities for more efficient control of company processes. Omnichannel transparency of sales, stock, and buying habits broken down by region helps companies recognize trends early on so they can develop demand-oriented product ranges for each channel.
Korean beauty retailer Memebox is a great example of a consumer goods brand that has used technology to help them quickly scale their business. Since launching an integrated platform with improved data analysis, the company has achieved revenue growth greater than 300%. By leveraging sophisticated data analysis, it was able to improve inventory accuracy and, as a result, decrease its time until delivery by better than 30%.
As consumer expectations continue to grow, it will be essential for companies to use technology as an enabling force. By creating an agile architecture, companies will be empowered to quickly place the right products on shelves and adapt strategy according to buying patterns. As is usually the case in competitive industries, speed will continue to play an important role in helping winning companies stay ahead of the pack — particularly during this time of dynamic change, the Retail Renaissance.