21st Century Retailing

The 21st Century is here. Yes I know that statement is obvious, however, as a retailer have you really considered its full impact on your organisation? You’re competing in a world where the phrase ‘multi-channel’ became irrelevant five years ago – retail is multi-channel! You’re marketing to a consumer base that is probably more technologically advanced than your IT department and more price savvy than your grandparents were during the depression. You might think that you’re an early adopter of certain technologies and best practices but have you really considered what it actually means to compete effectively in this new, dynamic retail landscape where not only you but the customer is living with uncertainty?
The 21st Century is redefining the traditional retail pillars of Price, Product, Service and Customer. In this article we’d like to offer you our views on the subtle - and not so subtle - changes in definition of each of these pillars and hopefully provide you with some food for thought on how we believe you now need to look at each.

Product

Multi-channel - or ‘Retail’ as we would like to redefine it - combined with easier global sourcing offers retailers a huge opportunity to extend their range. Two issues arise here. Firstly, an extended range means increased supply chain complexity and, secondly, you need to ensure that in extending your range you remain true to your brand values. The grocers offer some prime examples here in terms of how far you can stretch a brand yet remain true to and deliver on what it represents as you enter new territories both in terms of geographies and competitive ventures. Take for example the “Tesco Finest” range. The introduction of this range has seen huge increases in market share for the grocery giant and given the retailer the opportunity to compete within a new set of demographics.

Service

Now more than ever retailers have the opportunity to compete on service. For over 30 years we have voiced the words but not lived up to their meaning that “our people matter”. In the 21st Century, if we are not careful, this chicken could really come home to roost. When it comes to your brand, your people are the strongest or the weakest link in the chain. If “value” is the watch word, it can only be delivered through the services provided by your people. How are you going to make human contact count? Whether it is in store, in your call centres or in the DC’s, your brand experience has to have a human face or it will be reduced to a price proposition.

Price

Last year’s recession saw a rush to value (otherwise known as bottom price) by many retailers. Whilst it would appear that the discounters ruled, on the whole the luxury brands and top-end retailers sustained healthy profit margins. So what does this tell us? In the 21st Century, pricing is taking on a new significance. As prices become more visible, you are being forced to define the value proposition your brand represents through the products and services you offer in line with the prices you offer. There needs to be a clear connection between your price proposition and your brand and you need to stay true to it – no matter what channel you choose to go to market through.

Customer

We read a blog recently calling on retailers to adopt an “Office of the Customer”. We couldn’t agree more. Retailers work in an incredibly siloed environment but must not forget that there is not one part of their business that does not affect or touch the customer in one way or another. In the 21st Century, customer demographics are increasingly blurred and customers’ wants and needs are continuously changing. For the retailer this implies increasingly high and continuous levels of customer engagement and a flexible and agile business that can quickly respond to change.

The areas I would love to have your feedback on are:

1. International expansion
2. Customer engagement
3. Localisation
4. Value add services
5. The role of scientific forecasting (or not)
6. Deals & promotions
7. Strategic pricing

If you think I have missed anything out or would like to share your views on what 21st century retailing means then please add to my thoughts.