These days, it’s a consumer market, which means retailers are challenged, and global economic uncertainty has only served to add further pressure.
All this considered, Pricewaterhouse Coopers said now that we’re well beyond the simpler times of fewer consumer demands and less competition, there are certain necessary investments retailers need to make.
“Consumers are in the power position, as 2017 is a golden age of choice, convenience and demand for value, powered by the mobile phone and the global bazaar just a click away,” PwC global retail and consumer leader John Maxwell said. “Retailers are in a tough spot, however, often lacking a global brand and facing technological upheavals that have left them in the throes of constant reinvention.”
The stakes have never been higher for allocating investment dollars, according to PwC, which says there are 10 areas where retailers need to invest if there’s any hope of staying ahead of the competition.
Invest in the mobile site, not the mobile app
With mobile’s increasing popularity among shoppers, the functionality of mobile commerce should be key for retailers. Daily shoppers are already spending just as much time buying on mobile as on personal computers.
And the focus should be on improving and optimizing mobile sites rather than apps because, according to PwC, app usage is “cratering” as consumers grow increasingly less keen to load up multiple apps they don’t use that often. Last year, the top U.S. app publishers said they saw downloads decrease 20 percent year over year.
“We’re at a tipping point with mobile,” PwC’s U.S retail and consumer leader Steve Barr said. “Consumers are becoming extremely comfortable using their mobile device not only for searching for prices and product availability, but for actually completing the transaction.”
More and more retailers are starting to realize the importance of investing in this channel. In a shop.org survey of retail executives, when asked where they’d be dedicating their dollars this year, 39 percent said mobile and just 6 percent said in stores.
Retailers should be doing things like letting shoppers link directly to their mobile sites from Facebook or finding their way into social sites like WeChat as JD.com did by becoming the exclusive shopping channel in the WeChat mobile wallet. This will be one of the best ways for retailers to drive growth.
Invest in talent
Despite popular belief, shoppers are still heading to stores, and the percentage of them visiting a store at least once a week has increased over the last two years. That’s why talent should not be overlooked.
“The store is not disappearing, and the need to improve in-store talent is only going to get more acute,” according to PwC.
Seventy-eight percent of retailers said sales associates with a deep knowledge of the product range is the most important factor for the in-store shopping experience. What’s also vital, however, is a brand’s social media interactions. Forty-four percent of consumers said they spent more with a brand they had social media interactions with.
“We believe that investing in social media talent as part of a retailer’s marketing arm could generate a healthy ROI,” PwC said.
Invest in big data insights, not just data collection
Many retailers have gotten good at collecting data, but few can glean much insight and determine how to go about using it.
Thirty-five percent of retailers said they are struggling to put a strategy in place that would give them a single view of the customer. And shoppers have their own gripes: while 68 percent of consumers stressed the importance of stores’ ability to check another store or online stock quickly, only 58 percent are satisfied with how stores are executing on this.
“The truth is that most retailers’ systems are not robust enough to reflect minute-by-minute inventory, much less communicate it accurately, real-time, to shoppers,” PwC said. But investments will have to be made in short order, because patience with things that don’t work isn’t a trait today’s shopper really has.
Invest in an amazon.com strategy
More than 90 percent of U.S. shoppers frequent amazon.com for their purchases, and in the face of Amazon’s ballooning success, retailers need to have a great reputation in their niche, be able to hold costs down and be agile enough to offer a range of innovative products, according to PwC. But what they must also do is invest in real-time supply chain.
“The Amazon effect has raised everyone’s expectations about how fast products should arrive at our doorstep,” PwC said. “To keep up and provide that excellent purchasing/shipping/delivery experience that all customers expect, retailers need information that is current to ensure their online, logistics and supply chain operations are operating at peak efficiency.”
With those investments, retailers will be better able to manage their product, track inventory, promote efficiency and improve customer service. They’ll also need to direct some investments to ease of checkout in stores so that it gets as close as possible to Amazon’s one-click ordering in terms of convenience.
Invest in the “story”—not traditional advertising
Now that we know traditional marketing doesn’t work the way it used to, retailers need to rethink how they’re sharing their story with shoppers.
Social media is no longer the bonus it may have been before, now using it in conjunction with all other branding to extend the company’s story is critical. Brands should have expert staff in place who understand the business and the social media arena and can map out a relevant plan for which platforms to use, frequency of posting and social media listening tools.
“On occasion the ‘noise in the system’ about a certain retailer or product is unfavorable,” as PwC explained. “Catching the clues on social media that a negative narrative is building can help preserve the brand story.”
Invest in more secure platforms
Nearly two-thirds of shoppers are worried about having their personal information hacked when using their mobile phones. More than half of shoppers said they only use websites that they believe to be legitimate and trustworthy.
“Given the scale of the potential risk, secure technology and data systems need to be a C-level concern, and there should be budget allocated to enhanced security systems, maintenance and updates,” PwC said. “They might also consider collaborating with outside IT security experts that stay on top of the developments and can advise on how to protect retailers’ systems and customers.”
Invest in keeping already loyal customers
This may seem like a given, but many retailers aren’t thinking about how to retain loyal customers beyond using loyalty programs.
Among U.S. shoppers, 71 percent said they like to shop based on brand loyalty rather than trying something new.
“Since customers seem apt to be brand loyal, reinforcing this loyalty by investing in uniquely appealing brand features—such as customized offers and special access to deals—could pay big dividends,” according to PwC.
Companies like Best Buy have started offering loyal customers premier customer-only shopping days, advanced ordering on limited edition items, an exclusive concierge service for repairs and in-home consulting services.
Building up private label products is another way to boost loyalty.
“Private label is healthier than ever, and offering customers high-quality private label goods is one of the best ways to lock them in.”
Invest in showrooms, not the entire store network
Consumers want more from their shopping experience: 68 percent said they want the ability to quickly check another store or online for stock, 59 percent want an inviting ambiance and 59 percent want to be able to see/order an extended range of products.
The solution for retailers? Invest in showrooms, or as PwC puts it, “physical locations that are designed not to push product, but instead to entice customers with all of those amenities they want from the store.”
Showrooms are often comfortable and inviting, with the added convenience of having product shipped straight to the consumers’ home. Bonobos has been leading the charge in this space. Consumers can come in, enjoy a beer, get the help of knowledgeable sales people and have their sizes and info stored to make follow up visits or online buys even easier. For Bonobos, it means costs are lower because they require fewer salespeople and can have a smaller footprint.
Invest in the authenticity of branded goods
When it comes to luxury goods, many shoppers still won’t buy these products online for fear of getting non-authentic items.
In China, where product authenticity is a major concern, demand for imported brands has soared. As such, China put new cross-border B2C e-commerce policies in place to address these legitimacy challenges, and international retailers are tapping into B2C channels for access to Chinese consumers without the hassle of establishing an entity in China.
The “stepping stone” strategy, as PwC refers to it, allows companies to build their brand, test their value propositions and gain operational experience before taking the plunge to expand into the larger domestic market.
Invest in heath care offerings
Though it may seem odd now, retailers may want to consider offering healthcare services in stores.
Consumers have consistently ranked their satisfaction with CVS Health clinics, or the like, over doctor visits, and one-fourth of those surveyed said they wouldn’t mind getting an MRI or an ultrasound at a retail store pharmacy.
“The retail store is becoming a destination for health care services,” PwC’s Barr said. “Today’s consumers are willing to go to a retailer or pharmacy for certain types of medical services in a way that previous generations wouldn’t. It’s health and wellness, and the in-store experience coming together as one.”
Layered looks and practical items come together for S/S’18 menswear trends.Read more
DownTek ZeroPFC expands with Enlightened Equipment, Applied DNA gets a major order and Gore-Tex grows its sustainable portfolio.Read more
JC Penney is facilitating a more transparent supply chain with its latest certification.Read more
Now that Trump has pulled the U.S. from the Paris Agreement, the implications for the fashion industry—one of the leading sources of pollution—are complicated.Read more
A study from the International Institute for Sustainable Development shows that voluntary environmental standards are growing across select agricultural sectors, but remain a marginal force across global production.Read more
Athletic footwear brands are stepping up to promote better working conditions worldwide.Read more
Under Armour appointed Patrik Frisk as the company’s new president and COO. Plus, Finish Line, Inc. announced its Q1 fiscal year 2018 results.Read more