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Retailers struggle to balance efficiencies with experience

By Retail Technology | 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.”

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