Successful retailers are those that understand the changing needs of consumers and adapt to their changing buying habits, according to management consultancy McKinsey & Company. Customers now make price and product comparisons in stores using smartphones, for example. Others have come to prefer the convenience of online shopping. And customer loyalty can be hard to maintain, according to the Accenture Global Consumer Research Study, which found that only one quarter of respondents claimed to feel loyal to the companies they dealt with.
Understanding Consumer Behavior
Retailers have the opportunity to access masses of data on product sales, the impact of promotions on sales and individual consumers’ purchase histories. They must analyze and use that data to plan the product lines they will carry, in-store promotional activity and relationship programs aimed at consumers. Loyalty cards, for example, provide data on consumers’ individual purchases, enabling retailers to make personalized offers and strengthen customer relationships. Using data will enable retailers to track and understand consumer behavior, and align their business to changing consumer needs.
Operating Multichannel Strategies
Offering consumers a choice of buying in-store, online or from a call center improves convenience for the customer and gives retailers the opportunity to capture a higher share of the customer’s wallet. Retailers may also open different types of stores to meet local shopping needs. Supermarket operators, for example, may open neighborhood convenience stores or shops within gas stations to capture last-minute or impulse purchases. McKinsey notes that e-commerce transactions accounted for 8 percent of U.S. retail sales in 2013, while online retailers were making their services more attractive to consumers by offering free, fast delivery in addition to competitive pricing.
Improving Operational Efficiency
Consultancy KPMG points out that operational excellence is a key factor in retail success. Retailers must aim to optimize store layouts to maximize display space and increase the productivity of their staff through effective training and supervision. Streamlining checkout processes and introducing facilities such as mobile payment and self-scanning can realize further efficiencies, as well as improving convenience for customers. Inventory databases enable greater control over stock levels, simplify ordering and help retailers plan effective promotional programs. By improving operational efficiency, retailers can also maintain or reduce their costs, enabling them to offer lower prices and compete effectively against other outlets.
Enhancing Customer Experience
The quality of customer experience is critical to the success of stores and online retailers. Consumers in stores expect clear layouts, convenient parking and opening hours, prompt service at the customer service desk or checkout, and clear policies on refunds and warranties. Mobile technology offers retailers new opportunities to improve the customer experience. By capturing data from smartphone users who browse their websites, retailers can provide relevant product information and personalized offers when consumers use their phones in store. Online shoppers want a clear website structure, with navigation that is easy to follow and an ordering procedure that is simple and secure. The website should also include contact details for customer service, including facilities such as chat or instant messaging.