Retail Outlook – 2013

Know your customers to know your business! That’s Easier said than done. But one thing is certain in today’s dynamically changing Retail industry that the traditional monolith business models and segments can no longer be taken for granted. Technology has empowered the customers and opened up the retails industry beyond any time, place or manner in which customer shops. On one hand it brings a huge possibility for the industry for engagement but on the other hand each advance is technology creates new dynamics and challenges in ways never known before.

Technology trending: As the trend shows in 2013, technology has become paramount in driving growth and enhancing customer experience. Key is to adopt a multi channel approach utilizing the traditional as well as online and mobile channels to cater to the ever changing behaviour, spending and demographics of customers. Most executives admit that social media and mobile technologies have accelerated the rate of change and bringing in new ways of doing business and reaching customers. Most retailers are now moving towards seamless integration of their physical and virtual channels for more personalized customer experience.

Brick and Mortar is back in fashion: Once thought to be in danger to become obsolete due to new technology, are now viewed with new found potential. The distinct advantage of face to face personal interaction between customer and the store has brought back brick and mortar in trend. Trick is to leveraging technology to be innovative and provide outstanding customer service and increased personalization, all in an effort to make their stores more exciting, entertaining, and emotionally engaging.

Data Analytics as value add: As the technology is opening new avenues that are breaking all the traditional ways of doing business and throwing new challenges on one hand, but on other hand it is also providing valuable information of customer behavior, that was never available earlier. Data analytics is acting as key facilitator in understanding the new dynamics through traffic patterns, loyalty data, social behavior, and enhanced platform to connect and interact with the customers. Retailers are also leveraging data in brand and product management and making pricing decisions. This is helping executives to drive operational excellence and acquire new customers.

Cloud computing as a silver lining: No trend has had as much impact on the world of information technology over the past decade as Cloud computing. Cloud computing facilitates the implementation of a multi-channel strategy due to a low cost-low risk model. It helps retailers manage multiple channels and locations, integrate their websites with business, support their Point-of-Sale (PoS) systems, provide a unified real-time view of business, perform automated merchandising and marketing, and gain a 360-degree view of each customer. Most of the retail executives have already adopted or plan to adopt the cloud technologies in their business and operational strategies.

Spend to Grow: Challenges due to uncertain markets and slow growth still loom on the industry forcing retailers to invest capital in geographic expansion, information technology and advertising and marketing initiatives.

Regulatory pressures: Most retail executives believe that political/regulatory uncertainty that includes healthcare reform, labour and immigration laws is a growing concern and will hamper the growth in the industry. Apart from that pricing pressures and rising labor costs were seen as the major obstacle in the growth.

Industry growth: Majority of the executives in the industry believe that the industry will experience growth in coming year with a modest gain of more or less than 5%.

Overall the retail industry continues to make slow but positive improvement in 2013. Major challenges have been adverse economic conditions and increasing concern over the burden of regulation and legislation are significant obstacles standing in the way of more robust industry growth. But in spite of challenges, technology has opened new paradigms for the growth and capturing and analyzing data are helping companies drive growth, streamline operations, and engage better with consumers.

About Author:

Harsh Saraogi is consultant and part of Systems Plus Pvt. Ltd. He is a part of consulting team that delivers Sourcing and Vendor Management Office projects. He can be contacted at: harshvardhan.s@spluspl.com