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Retailers struggle to balance efficiencies with experience

Retailers struggle to balance efficiencies with experience
Wednesday June 26 2013

Survey reveals industry at crossroads between driving operational efficiency and improving customer experience

A new survey has revealed that retailers are struggling with an intractable dilemma – of increasing operational efficiency while also improving customer experience.

Worryingly it also suggests that across Europe retailers feel that achieving both – the balance between improved efficiency and customer experience – is just not possible.

The survey of European retail management commissioned by Fujitsu found that almost 60% of respondents placed the same value on both efficiency and customer experience in an increasingly multichannel environment, underlining the fundamental challenge facing retailers with a store presence.

Retail's trifecta challenge
 
Findings from the Fujitsu Pan-European Retail Survey 2013 confirm the future of the store in a changing environment. Managers face challenges such as driving sales and managing people. Simultaneously they must maintain a unified view of customers across all channels.
 
Among multiple indicators used to evaluate store efficiency, those relating to sales margin were used most widely by 60% of respondents. The survey confirmed that retailers recognise their biggest challenge is to sell more, and to do so more efficiently, with 63% of respondents identifying sales as their principle concern.

However sales pressure was also more keenly felt by 72% of UK retailers, compared to the global average of 63%. A further 59% of UK directors interviewed believed that the value of the store value may increase provided it shows a joint interest in customer experience and store efficiency. Yet only 13% of respondents captured information about both these key indicators without using it.
 
Technology as an enabler

Almost three in every five retailers expect to benefit most from technology solutions supporting online-based services – most notably for international companies and larger food retailers. Mobile phone sales capabilities are considered equally important by international retailers.

For 72% of UK retailers, technologies will be decisive in revolutionising instore purchasing. The top-three projects among them to improve store efficiency included mobile phones (66%), online-based services (59%), loss-prevention tools (56%).

The biggest ‘efficiency versus customer experience’ gap is emerging among larger food retailers, which consider all self-service and hybrid technologies as contributing greatly to store efficiency (over 60%), while simultaneously adding value to the business (around 65%). 

Measuring business value effectively

In comparison, other retail sectors consider these technologies as contributing more to the customer experience (50-60%). And, as such, they said these technologies generate less value to the business (around 30%), possibly as it is more difficult to trace ‘cause and affect’ in such projects.

Richard Clarke, global retail vice president at Fujitsu, commented: “Being a retailer – buying and merchandising, supply chain, retail operations, transaction management – is no longer defined by having a store, merchandise to sell and a cash register. 

"It has become defined by managing customers through their shopping ‘journeys’ on their terms, and often via their own personal assets, such as a smartphone, and their own capabilities – based on their product knowledge or social networking connectedness.”

Tagged as: Fujitsu | store | shop | survey | management | Europe | future | multichannel | efficiency | customer | service | sales