Modern Retail are proud to share the ‘Retail Crisis or Retail Evolution’ series, by Naeem Arif, Vice Chair of the Midlands Retail Forum. Naeem shares the ways in which successful high street retailers are adapting to overcome new challenges and thrive, proving the importance of evolution and technology in retail.
To read from the start of the series, click here.
It is really important to remember that technology does not create profit itself, but it creates opportunities for you to earn a profit. Technology is not new, but the current rate of change is unprecedented and that is what many organisations are struggling to cope with.
It is evolving at a faster rate than some of the bigger brands are able to cope with. It is no longer acceptable to have a business strategy that does not evolve or pivot on a regular basis. The rate of change of the current state-of-the-art technology is changing the rules of the game so fast, that organisations need to be more agile in their thinking and ability to adjust.
“There is a need to create a leaner business that better serves the rapidly changing behaviors of our customer base”Frank Levin – Chairman, House of Fraser
When Amazon started to make their mark with online sales, Toys R Us set up a partnership to deliver all the toys to them, which did not last long. Amazon is setting the standard for many of our customer expectations with their wide range of products and quick delivery service. Why would you wait for days for a delivery, when you can order it today and get it tomorrow?
Also, do you notice how Amazon prompts you for products based on your buying patterns? This is not only helpful for the customer, but also a great upsell opportunity for the seller. This is using technology in a proactive way to analyse trends and propose things. Notice how, when Amazon does this, no-one complains.
Amazon prompts you based on your habits
Many people only link technology with social media. Despite having millions of followers across their various social media platforms, Toys R Us and Mothercare were unable to convert that into a sustainable business and had little engagement with their followers. Mothercare’s YouTube channel has had 21 million views since 2011 but that has not guaranteed them a pro-rata level of sales.
Technology adoption is not only about social media, it is much wider. The power of social media is not in the tech, but in the content. Customers value their time and to keep their attention, you cannot just be making noise… you have to be making their lives better.
Invest in your online capability as well as the technology to support your online and in-person presence. Having a click and collect option is expected by customers today and this is something that Argos, PC World and Next are enjoying.
Argos has shown great numbers since harmonising their online and instore experiences. Whereas many retailers are averaging 10-15% with online sales, Argos’ averages closer to 40% when you include their click and collect service. Technology allows customers to check stock before they make their way to the store and then complete a quick transaction when instore. There is no personal service or exciting experience in Argos. Instead, there is the speed of the transaction, which is valuable to customers.
The retailer Next use their app to provide a next-day home delivery service, which is a great solution for working adults who have household needs and a busy schedule. Again, it is a quick and easy service, backed up with a returns policy that means customers can order different shirts online, receive them and return any items which they do not want to keep. The important thing for Next is that they are supplying their own branded products, whereas in Maplin’s situation, they were selling products that we could all get from somewhere else.
It is not just about taking money from your customers… their desire for information has never been greater. Whether you have an app or just a website, your customers want accurate and detailed information which will help them make a buying decision. Many will use their smartphones to read reviews, or check competitors’ prices whilst instore to support their decision-making. They don’t want to have to come into the store and ask a sales assistant about a product range or which items are in stock. Your customers want to make buying decisions based on their own research where possible and not have to rely on a sales assistant.
A major change that technology has brought to retail is the ability for customers to share their stories and reviews with the public. Customers will regularly check in online to tell their friends about the services they have used and their experiences, whether it was good or bad.
Immediate feedback from Customers
Reputation management is now a real issue for retailers because customers can quickly complain about a bad experience and the message can spread very fast. A major issue for Carpetright has been their reputation and now this reputation can be shared online for all to see.