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Retail Business

Embrace new practices and methodologies to deliver individualized customer experiences.

Introduction

The Retail Business Model is evolving.
Are you Keeping up with the Change?

The COVID-19 pandemic has created massive challenges for retailers around the world, with some retailers to thrive and others to struggle to survive. At the same time, COVID-19 has accelerated key fundamental trends that were already influencing the sector: business model evolution, the value of purpose, the ruthless focus on reducing costs and the increased power of the consumer.

TREND 1
The Retail Business model is evolving: The rise of platforms is changing the retail landscape.

21st Century Enterprise

Source: Global Retail Trends 2020, KPMG, 2020

LEGACY

  • Speed Market
  • Scalability
  • Smarter Portfolio
  • Management
TRANSFORM
  • Enterprise
  • Transformation
  • Leverage The Role Of New Valuable Assets: Data
  • Build New Operating Models And Collaboration

TREND 2
Purpose moves to the forefront: Customers want to buy from companies who stand for something bigger than profits

Journey to Becoming Purpose Led

Source: Global Retail Trends 2020, KPMG, 2020

TREND 3
Rethinking the cost of doing business: Retailers take new approaches to cutting costs and driving profitable growth

Impact in Retail - Global

TREND 4
Customer’s choice comes under the microscope: As customers focus on availability over selection, all signs suggest discounters and platforms will thrive

Key Challenges

Consumer’s Shopping Behavior Has Changed

Rather than being a planned, discrete activity, shopping occurs whenever and wherever the mood strikes today’s always-on consumers— and this is increasingly while they are doing something else. Seven in 10 consumers surveyed say they shop in these so-called “micro- moments,” and 35 percent do so at least weekly.
Of consumers shop in “micro-moments” (shopping while doing something else.) more than one in three say they do so at least weekly and up to multiple imews daily.
Due to changes in shopping preferences over the past five years, consumers want in how, where, and when they make purchases across product categories.
Source: Meet the 2020 Consumers Driving Change, IBM 2020

Sustainability has Reached a Tipping Point

Consumers seek products and brands that align with their values. Nearly 6 in 10 consumers surveyed are willing to change their shopping habits to reduce environmental impact. Nearly eight in 10 respondents indicate sustainability is important for them. And for those who say it is very/extremely important, over 70 percent would pay a premium of 35 percent, on average, for brands that are sustainable and environmentally responsible.
Of consumers αre willing to charge their to help reduce negative environment impact.

Values are as Important as Value

Most consumers fall into one of two segments: Value-driven consumers, who are primarily concerned with getting their money’s worth and select brands based on price and convenience; and Purpose-driven consumers, who select brands based on how well they align with their personal values and who are willing to “walk the talk” when it comes to sustainability, changing their behavior, and even paying more for brands that get it right.
Of respondents worldwide belong to one of two shopper segments: value-driven consumers (40%) who seek products and services aligned with their values.
Source: Meet the 2020 Consumers Driving Change, IBM 2020

Preference of Brick and Mortar Stores

With the sheer amount of brands choosing to move to online marketplaces, the number of brick and mortar stores is slowly dwindling.

Decline of Retail Stores

Over the past few months, there has been a startling decrease in the number of retail stores, and the number is decreasing at a rapid pace. Most the retailers are doing so in favor of online stores and marketplaces.

Price Comparisons

A large number of brands tend to offer different prices offline and in-store when it comes to their products and this is something that affects the manner in which people shop.

Integration of Offline and Online Mediums

An incredible 84% percent of customers believe that retail brands should look for ways in which they can integrate offline and online mediums to provide a heightened level of service to customers. Customers want to engage with the brand more and see this as one of the best ways to enhance that service.

Millennial Shopping

67% of Millennials see online shopping as their preferred means to buy something rather than opting for an online store where they can see or feel the clothing. This customer audience also denotes one of the largest sections of customers for the online retail industry. Millennials spend almost 50% more time shopping online as compared to individuals belonging to Gen X.

Opportunities

Operationalize Customer Centricity and Digitally Reinvent the Business

  • Leverage data and insights to deliver individualized experiences at scale
  • Go beyond traditional buy/sell models, and use consumer engagement as the driving force for strategy and operations
  • Ensure organizational structure and KPI alignment
  • Leverage innovation labs and partners to create new business and operating models

Improve Operational Effectiveness and Agility by Embracing New Practices, Operating Models and Technologies

  • Streamline business processes by embracing enterprise AI and automation
  • Develop data-driven, flexible supply chain models to match supply with demand at the local level
  • Drive agility and flexibility through XaaS-enabled operations
  • Embed innovation practices to enable continuous evolution

Increase Inter-Company Operability through the Use of Ecosystem Partners and Industry Platform

  • Build “trusted networks” through shared visibility and transparency; use partners to rapidly scale capabilities and extend expertise
  • Adopt standards-based industry-wide solutions to extend operations
  • Expand the ecosystem to include non-traditional partners; shift capital to increase efforts in R&D

Solutions

Expand your Business into an Online Platform

A huge share of purchases is now made online, but studies show that consumers prefer to buy things in person at brick-and-mortar shops. It’s common for customers to research products online only to make a purchase in person. Therefore, you should see this as an

Find Technology Solutions for Retail Businesses

Business owners have endless options for technology platforms that can streamline and help scale up their businesses. A complex and unwieldy software platform can actually increase costs and throw discord into a company that was functioning passably without it. For best results, look for software that is specifically designed for retail businesses.

Maintain your Customer Base

Traditional customer loyalty programs such as special offers and promotions are still effective, but there is now a growing trend of personalization. It’s important to maintain communications with customers in order to keep them loyal to your brand. You can get to know your customers based on their previous purchases, and your staff can engage them in conversation to get a better sense of who they are individually.

Evolve Customer Expectations

Changes in what customers want and expect can change rapidly. Retailers need to be aware of seasonal trends and sudden changes in customer shopping behaviors. A few seasonal changes to your product lineup, is usually all it takes to keep your store on track. The most effective way to approach this problem is to always strive for innovation.

Modern Marketing

Modern businesses need to reach out to potential customers via several different channels. Multi-channel marketing needs to encompass several methods, including email, social media and traditional paid ads.

Inspire and Retain Employees

One of the greatest challenges of a retail store is to keep a core of long-term staff. One way to tackle this challenge is to increase engagement with employees by providing periodic new training programs that can maximize their potential. This process can be automated with a solution such as an HR management system.

Internal Communication Solutions

As the retail market becomes more complex, organizations have more complex structures that require more sophisticated internal communication solutions. Retailers have many options available to streamline their internal communication processes. Many of them take advantage of enterprise resource planning (ERP) systems to improve and integrate company departments and business processes. ERP systems centralize business communication and information handling.
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