Optimising the customer experience
Connected consumers armed with laptops, tablets and smartphones are transforming the traditional retail experience, according retail supply chain expert Scott Welty. Whether they are checking prices right in the aisle, using brick-and-mortar stores as a showroom to check out a potential online purchase, or turning to the web for reviews and opinions, consumers are more connected and better informed than ever
Connected consumers — armed with laptops, tablets and smartphones — are transforming the traditional retail experience, according retail supply chain expert Scott Welty. Whether they are checking prices right in the aisle, using brick-and-mortar stores as a ‘showroom’ to check out a potential online purchase, or turning to the web for reviews and opinions, consumers are more connected and better informed than ever
Today's customers expect retailers to be just as informed and connected as they are, which places new demands on the entire retail supply chain, said Scott Welty, retail vice president for supply chain vendor JDA Software.
“The good news is that most retailers have a lot of information about products, customers, shopping histories and more at their fingertips that can help them recognise and fulfil customer needs,” he said. “To foster long-term customer loyalty and profitability, retailers have the opportunity to use that data and insight to optimise the customer experience.”
Enhance the customer connection
Welty said merchandise, promotions, pricing and other aspects of the customer experience must be based on a highly detailed understanding of consumer needs that goes far beyond high-level shopper demographics, addressing the individual consumers shopping through various channels.
“Just as Amazon routinely suggests new products for its Kindle users based on past purchases, retailers should have easy visibility into information that helps them improve, upgrade and expand that individual customer's online or store visit,” he continued. “Retailers should know their shoppers' order history, recognise their preferences and deliver relevant, meaningful and personalised offers.”
To prevent consumers from using retailers' brick-and-mortar stores as showrooms before making online purchases from competitors, he also said store employees should be empowered with technology tools that enable them to easily recognise shoppers, access their personal information, make product recommendations and encourage customers to ‘buy now’ during in-store visits. “This may include the power to negotiate price, personalise offers, propose alternative delivery options and accommodate ‘on-the-floor’ checkout on the spot,” he added.
Breaking down channel barriers
Nothing is more frustrating for consumers than browsing a retailer's website, filling a shopping basket, and then discovering that items are not available or are a different price instore, Welty continued. “Adding to that frustration is the lack of visibility into item availability at their local stores,” he said. “No matter where they are physically located or which channel they are shopping at the moment, customers desire a seamless shopping experience across all shopping channels, as well as the ability to make a purchase anywhere, anytime.
“Yet many retailers have failed to create a consistent experience across their different channels. If a customer is shopping through any channel and a product is not available, helpful employees or online interfaces should support them in finding and purchasing that product if it is available elsewhere.” This can turn a common, frustrating experience into a rewarding one that motivates customers to make return visits to that retailer.
Translate loyalty into long-term success
For the past few years, most retailers have been focused on competing based on low price, but this low-price model limits strategic options. Welty maintains that retailers must instead work toward building a unique value proposition that reduces the role of price in the purchasing decision. “Shoppers must feel they are receiving the right combination of value, product and service,” he suggested.
“Retailers must focus on understanding their customers' unique needs — then work backward to craft the perfect portfolio of products and services that builds lasting allegiance. For example, luxury retailers like Louis Vuitton and Burberry are thriving, even in a challenging economy, by offering customers unique products and a special shopping experience that they perceive as valuable.”
While many retailers are accustomed to focusing on merchandise plans as a starting point, the JDA expert said retail leaders know that the consumer is the focal point: “By defining consumer profiles, segments and strategies first, achievable merchandise plans can then be developed with appropriate supply chain capabilities and constraints.”
Welty concluded: “For retailers that begin with customer satisfaction as a foundation for everything they do, many of the challenges presented by alternative channels and competitive retailers will fade away. Then their brand will emerge as the best choice in an increasingly competitive marketplace.”