Intense competition and cost-control pressures make a continued focus on bottom-line results not just a priority but a business imperative…And given the industry’s traditionally lean margins, the drive to generate top-line revenue growth remains critical.
Within such an atmosphere, we’ve identified four key trends that reflect today’s retail state and will certainly shape its future direction:
- The Data-Knowledge-Action Continuum
- Boundaryless Organizations
- Accelerated Differentiation
Being “customer-centric” means that Marketing, merchandising and store operations work together to create compelling promotions as part of a local-market strategy. It means IT and CRM work together to apply the tools needed to personalize the shopping experience. And it means merchandising and supply chain work together to find a cost-effective way to implement a target-customer strategy. With more and more retail executives viewing customer retention/reactivation as a strategic initiative, achieving customer-centricity is a price of entry in today’s retail environment.
The “data-knowledge-action continuum” is the phenomenon of transforming potential data to kinetic knowledge. Retailers have long been buried in dormant data but are now beginning to analyze and capitalize on this opportunity. The end goal? A deeper understanding of their customers-and their needs-at a microcosmic level. And the subsequent loyalty that would derive. Actionable knowledge will enable retailers to execute programs-in merchandising, Marketing, stores, and the supply chain-that ensure the right products will be in the right places at the right times. Moving along the data-knowledge-action continuum will reshape and possibly redefine the complexion of merchandising.
The “boundaryless organization” is coalescing as retailers and wholesalers dissolve boundaries within their enterprises and between them. Portal technologies are demonstrating workforce efficiencies and-despite the enduring process, technology, and cultural obstacles-the promise of retailer-supplier collaboration still demands attention, if not participation. The advantages of cross-functional integration are driving many executives towards adoption: agility in responding to shifting customer demand; speed-to-market; rapid data assimilation into Marketing strategies, merchandising programs, and store operations; and overall cost containment and productivity.
Finally, faced with customers who are increasingly demanding, more product- and service-savvy, and saturated with choices, the imperative to differentiate is paramount. To remain relevant, retailers and wholesalers must re-visit and amplify their “Five P Playbook”: product, price, place, people, and promotion. As competitive swim lanes blur and retail segments become more oblique, continually providing unique merchandise and service offerings is mission critical.
Despite the complexities and challenges, we have the capability and experience to help you leverage these trends for improved business performance.
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