A fundamental shift has occurred in our collective habits as shoppers. No longer are we prepared to wait patiently for retailers to serve us, gone are the days when we were satisfied to receive a one size fits all service and the thought of having to battle through the high street, retail park or shopping mall crowds fills us with dread.
Clear evidence of this change is seen in declining store footfall and sales, with many big name brands posting results well short of their stated expectations in the aftermath of Christmas and the holiday season. In the UK alone nearly 1,000 retailers fell into administration between January and September 2018, including major names such as House of Fraser, Evans Cycles and Poundland, according to The Observer newspaper.
A number of factors are contributing to these shifting habits. Competition is at an all-time high, economic pressure has driven us to want more for our money, political uncertainty has made us more cautious about spending and perhaps the biggest factor, our expectations as consumers have skyrocketed. We now expect everything in life immediately, an attitude largely driven by ubiquitous access to information, commerce and social interactions via our smart phones and other connected devices. The result is a feeling of entitlement that retail brands should give us what we want, right now.
This is exacerbated by the rapid growth of online retail, where finding the items we desire is easier, quicker and requires zero interaction with actual humans in stores.
Of course, Amazon is a key part of the equation. Love them or loathe them, Amazon offers a huge array of choice, is easy to navigate, and for the growing legion of Prime members, delivers your chosen products the very next day.
The question for retailers is no longer whether to change, that’s now a necessity, the questions is how to change.
Real-time Retail is the Answer
Retailers can combat this threat by transforming their business into a real-time operation, simultaneously providing a personalized, high value customer experience and a slick, efficient supply chain, maximizing revenue and minimizing cost, the net result being improved customer loyalty and higher profits.
Real-time retail is the ability to anticipate and respond effectively to customer needs at the exact moment they choose to interact with you. For example, offering the precise mix of products the customer is looking to purchase, whether on-line or in store, pricing those products competitively, delivering a friction free, personalized customer shopping journey and being able to track and optimize the way products move through the supply chain, from manufacture to shelf, ensuring maximum availability.
Though there are many aspects for bringing real-time retail to life, here we focus on the critical aspects of data and insight. By real-time we mean two things. Firstly, real-time insight on vast amounts of data collected across the business over days, weeks, months and even years, on which analytics, such as machine learning, can be run to generate rich insights from which improved decisions can be made.
Secondly, capturing data as it’s created in real-time, such as streaming in data from IoT sensors, tracking products through the supply chain then analysing and acting on the insights from that data in milliseconds to make vital decisions which minimize risks and capitalize on opportunities in the quickest time possible.
The benefits of becoming a real-time retailer are multiple, high value and offer the opportunity to forge ahead of the competition. Ultimately each benefit leads to the same goal, which hasn’t changed since a competitive retail market came into existence. Deliver an easy, convenient and satisfying customer experience, at a price your customers consider to be good value.
What’s Different Now?
Coupled with the need to adapt to a rapidly evolving retail landscape, where consumers now have far greater choice of where to spend their hard earned money, is a technology landscape that has evolved to such a point where the data generated by consumer behaviour and business operations can be captured, analysed and acted upon in the blink of an eye.
Advancements in computing power, data engineering, architecture, science skills, and business leaders with an acute understanding of what data to capture, the questions to ask of it and the action to take based on the answers is making real-time retail a reality.
Those companies who can understand and respond to customer behaviour and optimize the flow of goods to meet their needs quicker than the competition that will succeed.
Many retailers believe they “don’t need to be real-time”. Evidence shows us they are wrong, and ultimately those businesses risk becoming obsolete. Real-time is already here, and if anyone wonders why Amazon deliver ease and value in the way they do, much of it is driven by the ability to continuously manage their customers and supply chain.
Over the coming months we will explore the key areas to master in becoming a real-time retailer, covering topic such as how real-time enables retailers to win by exceeding customer expectations and transforming assortment planning, how IoT sensors and time series data will revolutionize the supply chain, the case for intelligent, dynamic pricing and key steps in establishing a real-time data and insight capability and culture in your business.