The retail industry is undergoing a massive change due to technology. In Asia, online retailers are flourishing because of their ability to target consumers anytime, anywhere, and across international borders. However, many traditional retailers are struggling as a result, finding it difficult to bring consumers into physical stores.
Retailers have long understood that ‘knowing the customer’ is crucial for maintaining loyalty and standing apart from the competition. Today, in the age of Amazon, it’s more critical than ever for retailers to access and leverage data to transform the customer experience.
The retail landscape is becoming increasingly competitive, with Amazon repeatedly disrupting the industry. It can seem like the retail industry is in crisis; what is actually happening, though, is that the retail industry is undergoing some profound changes and most retailers are treading water.
ECommerce is thriving in the UK. According to IMRG, £133 billion was spent online in 2016—a number expected to increase by 14 percent this year largely due to sales made on smartphones. As a result, traditional retailers need to meet changing consumer expectations and stay competitive by offering true omnichannel experiences.
Critical to offering customers seamless omnichannel experiences is a careful orchestration of digital technologies, largely explaining why 69 percent of global retailers plan to increase digital transformation investments this year.
We all seem to take it for granted now. We go to a retailer’s website or mobile application. We click on the product we want. Instantly, we have access to inventory levels, expanded product descriptions and specifications, what other people think about the product, related products or accessories, and alternatives to the product. Within a couple of clicks, we can make up our mind on a product, order it, and receive a confirmation of order acceptance.
The importance of eCommerce is expanding rapidly, especially with Amazon continuing to build its robust platform. Online sales will reach $414 billion by 2018 and mobile commerce now accounts for 21% of total digital sales. Given the growing importance of eCommerce as a channel, it is imperative that eCommerce works seamlessly with a retailer’s traditional channels.
Typical eCommerce Platforms today tightly couple their technology layers, inhibiting any flexibility to drive omnichannel experiences.
At a recent conference, Mike Schlotman, the CFO of US grocery chain Kroger, responded to Amazon’s recent purchase of Whole Foods and what that would mean for the grocery retail industry. He said, “Part of me refuses to believe that everybody is just going to sit at home and everything is going to be brought to their doorstep and nobody is ever going to leave home to do anything again.”
As online retail grows and more shoppers move to the web, retailers will face a series of challenges. How can they best prepare for the successful future of the online retail industry?
The online retail industry has witnessed significant growth over the last several decades. According to data from the U.S. Department of Commerce, online retail accounted for $136.6 billion in sales in 2007. By 2015 the number of sales online more than doubled and surpassed $340 billion.
“Retail matters”; that was the declaration last week by the Editor-In-Chief of RetailWeek at the start of their 2017 flagship conference in London. It might be biased for the leading-UK retail conference to declare their industry is important, but after two days of keynotes, breakout sessions and rubbing shoulders with the industry’s most influential figures it’s clear to see that, yes, retail does matter and that the trends mentioned actually transcend the retail industry; they’re applicable to everyone.
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