One clear theme dominates retail in ‘23: Focus on optimising the core.
Encodify
3 min read
This article discusses how the shift in focus from a positive outlook post-Covid to inflation and a drop in consumer confidence has made C-level executives refocus their efforts on operational excellence and driving consumer traffic to online and offline stores. The two critical factors that have emerged are consumer satisfaction and sales, with the promotion process being vital in generating traffic. To address these core issues, retailers need to optimise their touchpoints, tie online and offline together, and streamline their promotion process to ensure it is digital, lean, and efficient.
If we are to believe in the latest analysis of top retailers' expectations, the tables have turned. From a positive outlook coming out of Covid, we are now facing inflation and a drop in consumer confidence, and the perspective has made C-level executives refocus their efforts.
It's back to the old virtues - operational excellence and driving consumer traffic to stores - online and offline. It all makes sense. So what are the implications of the shift in focus, and what are the focus points? It all boils down to two critical factors.
Consumer satisfaction
Many stores have become tired and need a refresh to ensure the in-store experience meets shopper expectations. This is true for all stores, from discounters to department stores. And tying this experience to the marketing and promotion efforts is as important as ever.
We need to fix availability issues and pricing errors in store - all research points to these factors being key determiners of customer satisfaction and repeat purchase behaviour in stores. Self-service is fine. Queuing and waiting time has a more negative impact on the shopping experience.
Optimising all touch points in our consumer journey, regardless of channel, is vital. No one can afford to miss out on the promises made by our brand, our marketing and our promotions.
(Online) Sales
More and more consumers are looking online. They go online because of bad in-store experiences, a broader and deeper assortment, and the search for lower prices. However, convenience and certainty of not going to a store in vain are also significant factors, pointing back to consumer satisfaction.
As logistics solutions are improving dramatically, and it is becoming more and more the norm to receive goods bought online in less (!) than 24 hours, online buying is a hygiene factor for many categories in retail. And retailers are very much aware of this and focus on tying online and offline together to serve consumers in the best way possible. The reality is that by using more than one channel, a consumer demonstrates greater loyalty.
They simply buy more (often), which correlates with the focus on general sales. We need any shop and staff member to focus on serving the consumer's needs - which translates into sales. As easy as that.
Retail is detail - also in promotion management
‘Retail is detail’ has always been the essence of retail. And the complexity of getting the equation right has been, and is still, rising. When addressing the core - consumer satisfaction and sales - the lifeblood of generating traffic is the promotion process. A critical and complex process that has undergone a dramatic increase in complexity:
- More sales channels
- Personalised communication
- A broader and deeper assortment with many more suppliers
- Changes in consumer preferences and behaviour
- An explosion of promotional mechanics and types of offers
The vital promotion process needs to be digital. A retailer can only expect to deliver on consumer satisfaction and sales if the promotion process is optimised and streamlined in marketing and across departments tying all the commercial steps together in a seamless flow that provides time-to-market performance.
Being relevant and competitive means your promotion process is lean and efficient, from supplier agreements to in-store pricing and availability of products.
