Fortune favours the brave - how to win using technology in a flat retail environment
25 February 2019
Our predictions for 2019 are for relatively flat economic growth and retail volume decline – Brexit outcome depending. In this “New Normal”, subdued retail environment, you need to take share to grow. This means the right technology investments and a ruthless focus on efficiency. Both of which will help you enrich the moments that matter to your customer, across their shopping journey. So where to focus?
Let’s start with digital supply chain. Its use in retail is not new. What is, is that improvements in the technology we interact with in our daily lives, have made us all much more demanding of availability, service and delivery. Our recent survey of over 350 UK companies shows the investment priorities are clear - the top three being Demand Sensing, end-to-end visibility are warehouse automation.
Demand Sensing will improve forecasts by using big data and AI. Including new insight sources like the weather, competitor promotions and social media, to better predict what your shoppers will want before they do. In fact Amazon is already experimenting with sending you what it thinks you will buy before you order!
End-to-end tracking across the supply chain through smart sensors and GPS trackers will allow you to know where your products are in real-time. This can reduce overall inventory whilst improving customer service. Warehouse automation is at an all-time high. It offers significant cost and lead-time reduction and can help cover the potential risk of a shortage of workers post Brexit.
While the above areas of focus 2019 must-haves, it’s also important you experiment. Look at emerging technologies like drones, autonomous vehicles and blockchain which are likely to be key in 2020 and beyond. While still at an early stage, WalMart is trialling the use of blockchain to trace food from field to fork. Whilst investing in more embryonic technology can seem risky in a challenging retail environment it’s important to be more forward thinking. Use these experiments to find what works, then quickly transfer into tomorrow's business as usual. This means what you do now will give you a competitive edge for tomorrow.
Meanwhile AI and data analytics are having a big impact with the customer. Key focus areas are around individualised consumer communications and marketing. Beyond tailored emails to truly personalised, and anticipatory communication. This builds a richer, more valuable relationship with your shoppers, who will be much more likely to buy from you without shopping around.
The continued focus on customer service is a must and chatbots are a key tool here. They are now moving from simple interaction to helping customers’ book appointments and remind them of what they bought before. As more and more people have smart speakers in their homes this will become an even more important channel.
Overall, it’s clear investment in digital technology is no longer a nice-to-have for UK retailers. Many have a strong business case and improve the moments that matter to your customer. Investment has to be a priority, but being joined up across the organisation will find natural priorities. Those of you that can develop full visibility of your supply chains - from suppliers to shoppers - will be the ones that win over the short, medium and longer term. So, as the proverb says, fortune favours the brave” and even in the “New Normal” retail environment, this still rings true.
Do get in touch if you’d like to talk more about this. For deeper insight you can also download our 2019 Retail Outlook Report.
