Rupal Karia, Managing Director of Retail and Hospitality, UK and Ireland at Fujitsu, shares his top five predictions for the retail sector in 2017.
These include:
1. Automation, the customer experience enabler
2. Continued focus on personalisation
3. Co-creation for a collaborative nation
4. Curating an all-encompassing one-stop destination
5. The days of tilling are numbered
1. Automation, the customer experience enabler: One of the biggest challenges retailers will face next year is the increase in the minimum wage and the impact it that will have on their businesses and the way they operate. As the cost of staffing increases, this will no doubt impact profits and potentially business growth. Retailers will want to be sensible with their spending, especially in uncertain economic times. They will be looking for ways to manage their bottom line and reduce costs, which is where we expect to see digital transformation, automation, and robotics come into play. It will enable more administrative and time-consuming tasks to become automated and efficient. Thanks to this increase in productivity, there will be more scope for employees to adapt their roles, and add higher values of service to the customer experience. This will allow more personalised and curated shopping experiences, more shop assistant availability, and an increased sensory experience in-store. With the level of expectation has reached such high levels, retailers are going to need to find ways to match them and ensure they are differentiating themselves from their competitors.
2. Continued focus on personalisation: 2017 will be the year where the shopping experience comes full circle to the days where retailers knew their customers on a personal basis. The online experience has mastered this already, and now it is the physical stores turn. With loyalty amongst customers being so poor in today’s retail landscape, retailers need to be thinking about the personalised experience they bring in store and the value that face to face adds to a customer journey. What needs to happen is a true integration between instore and online to create a truly personalised experience. An example of a company that is providing this new heightened level of personalisation is McDonalds as they now through their in-store devices permit customers to customise their orders to the last detail transforming the way people purchase fast-food.
3. Co-creation for a collaborative nation: In 2016 collaboration between retailers grew as we saw the likes of the Post Office and WH Smith team up, Tesco and Arcadia do more together, as well as the major acquisition of Argos by Sainsbury’s. In the next year this collaboration will continue, as retailers find ways to maximise the in-store footprint, and see consolidation as an effective way of doing this. Collaboration also works in reverse, with physical retailers teaming up with online only players to widen their reach as we saw with Ocado and Morrison’s. Through collaboration, whichever way retailers choose to do it, it allows them to maximise their offering to customers and ensure that they are making themselves available at every channel. By teaming up with retailers that already do in-store or online well, they are able to provide a better service offering and focus on delivering that customer experience, rather than starting from scratch.
4. Curating an all-encompassing one-stop destination: In the coming year hospitality will take more of an integrated approach with retail as more destinations are created where people can shop, dine, and even catch a train all from one place. Grand Central Station in Birmingham is a great example of the three coming together, with all three elements co-existing in a welcoming and seamless environment. As a nation we crave ease and convenience, so retail destinations where shoppers and commuters can do everything all in one place is becoming increasingly appealing. As a result retailers should look at establishing themselves in destinations where they can cater to those customer needs of ease and help serve their needs all in one place.
5. The days of tilling are numbered: Tilling as we know it needs to have a change. In most cases, shop processes have been the same for decades; and with the recent launch of Amazon Go, we have seen how retailers can again push and innovate a physical store. The instore model where customers load their shopping baskets to then unload, scan, repack, and pay all of their items as they would have done fifty years ago are limited. Amazon Go is an example of how retailers can harness technology and embrace innovation in their physical stores to create that invaluable seamless customer journey. Now that the level of customers’ expectations is at an all-time high, retailers need to find ways to match it and ensure they are differentiating themselves from their competitors. Shopping instore is now very much experiential. By bringing innovative new ways to shop, retailers can enhance the shopping experience to make it more interactive, and digitally enabled. Those that do will be the retailers that stand out in a noisy retail landscape.
By Rupal Karia
Managing Director of Retail and Hospitality, UK and Ireland
Fujitsu