Retail driven towards multichannel

The success of e-retailers is forcing traditional retailers to re-evaluate their business models, writes Glynn Davis of RetailInsider.com, exclusively for RetailTechnology.co.uk

The threat of online-only operators, notably Amazon, is prompting traditional retailers to improve the instore experience for their customers in order that they can remain competitive, according to Glynn Davis of RetailInsider.com, writing exclusively from Monaco for RetailTechnology.co.uk.

Speaking at the IBM Smarter Commerce Global Summit 2013 in Monaco, Jill Puleri, vice president and global retail leader at IBM's Global Business Services division, suggested the trend for 'showrooming' was leading bricks and mortar retailers to "try and get their act together and have a link between their stores, website, and mobile that makes them as nimble as the online-only retailers".

Removing barriers to a sale

She believes this is leading to a trend of 'save-the-sale' whereby customers in a store are actively encouraged to buy a product from that retailer rather than using their mobile and potentially making a purchase from a rival.

Recommended steps to take include: teaching the store employees to recognise showrooming behaviour; providing them with mobile devices to help improve the customer experience; providing free Wi-Fi instore; and committing to match rivals' best price in the store.

Fundamental to this activity is the ongoing rise of mobile device usage in the shopper journey, which is also resulting in retailers placing a greater focus on data. Puleri said: "Retailers have [traditionally] optimised around prices and products, but now it's around customers – how long they've been on the web and how have they interacted? They are trying to get their heads around this change."

Optimising business around customers

As well as using internal data, they are increasingly combining this with external sources notably social media because Puleri suggests this is the way to communicate with the Millennial generation who are, "using technology differently" and will become increasingly powerful. "We are at the cusp of leveraging this data, pulling social media information in and identifying influencers and working out how to reach them," she added.

This is all part of a broad trend to "understand the customer not as a segment but as an individual", according to John Iwata, senior vice president of marketing and communications at IBM, who believes more retailers could follow the example of France-based retailer Galleries Lafayette that has been moving away from the traditional segmentation model to instead adopt a behavioural model. 

"The CMO [chief marketing officer] has abandoned the old model of demographics to [instead] cluster on behaviour. They do not care if they are a dog or a woman, if they behave the same then they are put in the same group," he explained.