Don't Become the Dodo Bird of Retail
Evolve or die: It's the Darwinian mantra for the Earth's flora and fauna. It's also the mindset retailers must adopt to stay ahead of competitors and remain enticing to consumers. Staying true to "the way we've always done it" thinking will lead to a fate akin to the Dodo bird.
Retailers have to ask: What is my business? I don't mean, shoes, fashion or grocery; I mean retailers must question the reason for their business. Are you the vendor's selling agent, taking product from your supply chain and figuring out the best way to sell it? Or are you the consumer's buying agent, focused on a specific client demographic and identifying the products and services they want, then finding sources for those products and services? If you are a vendor's selling agent, then many of the current retail practices apply, however, if you are the consumer's buying agent, you should have different concerns:
Manufacturers as retailers. As the consumer's buying agent, your brand adds value above and beyond the products themselves. There is a reason consumers have a relationship with you, and they will go out of their way to do business with you. They may travel a longer distance, pay a higher price (within reason), or even change products based on your recommendations as their buying agent. The price-conscious consumer, however, will always look for alternate paths to buy products.
Refreshed retailing. Retailers must work constantly to stay ahead of the curve for providing right-priced products and services when, where and how consumers want them. These include both internally focused changes such as supply chain efficiency, work-flow tools, and externally focused changes such as analytics technology used for consumer engagement, store layouts and to aid the shopping experience for both consumers and sales associates.
Reinvented malls. Just as the retailer needs to change to stay current, so must the shopping mall itself. In many urban environments (outside of the inner city), driving is still the dominant mode of transportation. Consumers make a trip to the mall to accomplish multiple tasks simultaneously, and it's imperative that the mall provides the right mix of retailers and services.
The big box effect. Big box retailers are in some ways a mall within a store. They have multiple, specialized departments and often their customers only need to shop at one store to get what they need. It should also be noted that many of the big box retailers are opening new, smaller-format neighborhood locations to provide additional choices and convenience for consumers.
Online all the time. This is the one factor that doesn't change when you move to a buying agent perspective. Almost everyone is online today and has the ability to research and buy online. This change requires retailers to connect with their consumers and understand their wants and needs like never before.
These changes demand that retailers understand consumers and how their shopping and buying habits are changing. With analytics, they can make sense of available internal (customer, product, sales) and external (census, growth patterns, demographics) data, and turn it into insights that drive action.
Darwinian retail? You bet. Without continuous adaptation, a retailer could find themselves on the endangered species list.
Alan Lipson is the Retail Industry Strategist with SAS, learn more about SAS Retail Analytics.
Retailers have to ask: What is my business? I don't mean, shoes, fashion or grocery; I mean retailers must question the reason for their business. Are you the vendor's selling agent, taking product from your supply chain and figuring out the best way to sell it? Or are you the consumer's buying agent, focused on a specific client demographic and identifying the products and services they want, then finding sources for those products and services? If you are a vendor's selling agent, then many of the current retail practices apply, however, if you are the consumer's buying agent, you should have different concerns:
Manufacturers as retailers. As the consumer's buying agent, your brand adds value above and beyond the products themselves. There is a reason consumers have a relationship with you, and they will go out of their way to do business with you. They may travel a longer distance, pay a higher price (within reason), or even change products based on your recommendations as their buying agent. The price-conscious consumer, however, will always look for alternate paths to buy products.
Refreshed retailing. Retailers must work constantly to stay ahead of the curve for providing right-priced products and services when, where and how consumers want them. These include both internally focused changes such as supply chain efficiency, work-flow tools, and externally focused changes such as analytics technology used for consumer engagement, store layouts and to aid the shopping experience for both consumers and sales associates.
Reinvented malls. Just as the retailer needs to change to stay current, so must the shopping mall itself. In many urban environments (outside of the inner city), driving is still the dominant mode of transportation. Consumers make a trip to the mall to accomplish multiple tasks simultaneously, and it's imperative that the mall provides the right mix of retailers and services.
The big box effect. Big box retailers are in some ways a mall within a store. They have multiple, specialized departments and often their customers only need to shop at one store to get what they need. It should also be noted that many of the big box retailers are opening new, smaller-format neighborhood locations to provide additional choices and convenience for consumers.
Online all the time. This is the one factor that doesn't change when you move to a buying agent perspective. Almost everyone is online today and has the ability to research and buy online. This change requires retailers to connect with their consumers and understand their wants and needs like never before.
These changes demand that retailers understand consumers and how their shopping and buying habits are changing. With analytics, they can make sense of available internal (customer, product, sales) and external (census, growth patterns, demographics) data, and turn it into insights that drive action.
Darwinian retail? You bet. Without continuous adaptation, a retailer could find themselves on the endangered species list.
Alan Lipson is the Retail Industry Strategist with SAS, learn more about SAS Retail Analytics.