For decades, retail executives made business strategy decisions based on current trends, industry experience, and pure instincts. But Retail 4.0 has completely altered that approach.
Everything is different. Now, consumers demand personalized service and customized offerings based on their past shopping behavior. The reality of omnichannel means consumers expect an exceptional experience anywhere they shop, be it in the store or through a device. On top of that, retailers must contend with consumers that have more to spend but hold no loyalty to brands. Dozens of other options for that clothing item of piece of electronics is just a click away.
But this new consumer mindset is only one facet that’s forced retailers to shift how they operate. The latest technological advances, along with increased competition, have caused them to change fundamental retail elements such as store formats and payment methods.
That’s a smart trend. Technology like virtual reality, augmented reality, mixed reality, Internet of Things (IoT), and AI all help to provide actionable insights that foster sales and repeat customers. Many retailers now employ a data-first strategy to understand buying habits, and to devise their sales and branding strategies. In short, they are using analytics to make more informed decisions about every aspect of their operations.
Analytics help improve every part of the operation. Using predictive data, retailers can boost optimization, improve efficiencies, predict product demand and prevent leakage. They can assess purchase histories and analyze search criteria – all to personalize their customer engagement strategy. Perhaps most importantly, analytics allow them to provide customers with the experiences they crave: They are presented with personalized offerings, multiple buying options, and proactive customer service. Even more, by leveraging historical data, retailers can make in-purchase recommendations to increase share of wallet. Retailers can also benefit by tracking social media. By assessing activity on Twitter, Facebook, and other popular social media platforms, companies can gain insights into consumer behavior, as well as their constantly changing tastes and needs.
These types of strategies improve the standing of the company and also provide an edge against competitors. Retailers also benefit when consumers see them as providing the best value. Today, with smartphones almost always in their hands or pockets, it’s become second nature for people to search for discount codes, or to do price comparisons online and in the brick & mortar environment. From that perspective, one of the best ways to create loyalty is to give the best deal possible, and even thrown in some extras. That’s why price optimization is so critical. When retailers leverage CRMs, ERPs, and pricing analytics, they can sell more today while getting repeat customers for the long term.
Retail 4.0 has also transformed order fulfillment. In the past the supply chain was perceived as merely a cog in the wheel of commerce. But now the supply chain directly affects competitive advantage and strategic growth. In fact, transforming the supply chain has become essential for survival in a landscape of global competition. Innovations such as ERPs can create agile supply chains that not only improve the pace of fulfillment, they also create cost efficiencies. This revamped supply chain provides a host of other benefits: faster speed to market, new delivery options, immediate access to products, and enhanced inventory accuracy.
Successful retailers have realized that the only way to remain relevant – and to remain in business – is to continually adapt to market forces. One on hand, they must embrace new technologies and business processes. On the other hand, they must be nimble and allow consumer trends to drive major strategic business decisions. After all, we’re not in 1995 anymore, when ecommerce first became a concept. We’re now in Retail 4.0.