The retail landscape is going through a metamorphosis. Western Europe’s economic climate is still difficult, with austerity showing little signs of relenting. This poses continued challenges for retailers and shoppers. But at the same time it is encouraging retailers to explore new avenues and innovative customer-centric solutions to boost increasingly squeezed margins.
The key to success hinges on retailers delivering value to European consumers. However, defining that value in a meaningful way has become increasingly complex as shopper needs and preferences become more sophisticated and demanding.
Now, more than ever, consumers in Western Europe:
- Shop when and how they want.
- Demand value, immediacy and convenience.
- Demand that retailers – as well as suppliers – listen to them and take their feedback on board.
- Settle for nothing less than a stellar experience that’s personalised for their specific needs.
- If consumers don’t get what they want, they simply take their business elsewhere. Moreover, continued economic uncertainty means that if consumer budgets are being squeezed, then they want to be doubly sure they are getting their full money’s worth for everything that they buy.
Bricks and mortar retailers, meanwhile, are facing many of the same macro realities as consumers, including economic uncertainty, rising fuel and other costs, and urbanisation. Many are also struggling against market saturation and greater regulatory constraints. The continued rise of e-commerce – especially from players like Amazon – means that the competitive stakes are even higher.
Nevertheless, the retailers that understand and then convey the most value to consumers, stand to grow their sales and margins regardless of wider economic circumstances. To do that, they must answer the all too important question: what do their shoppers actually want?
According to latest IMF data from April 2013, real GDP growth across Western Europe remains low. The general economic situation is showing no signs of improving anytime soon. This bleak economic condition is impacting consumers’ shopping habits and demands. In turn, retailers are under heightened pressure to provide more value to their customers, looking beyond just low prices to include convenience, in-store shopping experiences and “retail-tainment”, and anytime, anywhere shopping. Responding to mounting market pressures is proving critical for Western Europe’s retailers.
To cope with an increasingly challenging, and already saturated, market landscape, retailers across Western Europe must improve efficiencies and better control costs to stave off both their competition and margin erosion. Innovative technology not only helps retailers to manage their costs, it can also convey added value to customers by reaching them wherever and whenever they feel in the mood to shop. To facilitate operational excellence, retailers can use automation and self-service technologies, as well as optimisation tools based on predictive analytics, to streamline supply chain efficiency. To better understand consumer demands and improve merchandise planning, they must focus on shopper interaction and tapping big data using predictive analytics. Finally, to serve customers seamlessly across channels, (near) real-time data access is now mandatory. With consumers becoming ever more tech-savvy, retailers must satisfy anytime, anywhere shopping in terms of services, price and fulfilment. This makes a targeted multi-channel strategy absolutely critical to success.
Don’t you think technology has a critical role to play in helping retailers to maximize efficiencies, streamline costs and fight margin erosion? Do write in with your views.