Constant change is now an intrinsic part of the retail sector, as well as all industries.
A new Accenture study establishes that to grow in these times of uncertainty, retailers must focus on six imperatives for change, which involve a profound transformation that requires every part of the business: people, processes, and technology.
The first imperative is to reset products and services For years, retailers offered their customers products in exchange for a price. Today, the offer includes real, virtual, or a mix of products, services, and experiences. But the value proposition to the consumer is not limited to the product being sold; it is about being relevant in people’s lives. For example, nowadays, food retailers not only sell food but also try to offer busy parents a way to give a quick and healthy meal to their children, or a fashion retailer no longer only sells clothing but can offer a lifestyle or a commitment to sustainability through various rental or resale options.
The key will be to involve customers differently. Retailers must develop offers with a hyper-local focus, using digital tools that provide information beyond traditional demographic segmentation. Using the benefits and potentialities of Web 3.0 and the metaverse will help deploy multiple creative ways to engage a community of brands and develop new sources of revenue from NFTs and digital products.
The second imperative is to reset channels. Even after the historic consumer shift towards digital during the pandemic, they have kept up the physical store and plan to do so. People are visiting retail locations at rates near pre-pandemic levels. And when it comes to digital, it is not monolithic. It is a channel of continuously emerging channels such as marketplaces, apps, social media, and the metaverse.
In a complex landscape like the current one, the study proposes that retailers must readjust their channel strategies with a localized focus that balances experience and cost.
Understanding catchment areas with internal and third-party data is critical to determine demand and for retailers to decide where to locate their stores and warehouses, what store formats can work, how to connect offline and online strategies, and how to make inventory and assortment decisions to serve customers.
The third imperative is to reset fulfillment. Delivering products to customers is becoming increasingly costly and complex. In the current high-inflation environment, the distribution economy is rapidly changing. People expect everything: speed, convenience, transparency, and environmental and social responsibility at a fair price. The need will be to drive predictive analysis based on data and AI to reach better and serve customers. This way, retailers can improve their businesses in terms of quality, quantity, and timing.
The fourth imperative is to reset sourcing. Recent events and market volatility have highlighted how vulnerable traditional sourcing practices could be. New strategies must consider the geopolitical climate and be prepared to pivot quickly, respond to change, and even anticipate it.
According to Accenture, scenario modeling will be fundamental for managing the sector’s potential risks. Companies can anticipate, evaluate, and mitigate high-risk situations by defining and executing scenario simulations with advanced tools.
The fifth imperative is to reset talent. It is not only necessary for work methods to evolve to drive and use resources in the best possible way, but they must also foster a culture with clear objectives to attract and retain talent. It is necessary to move towards a flexible and supportive work environment where people feel seen, heard, secure, and can learn and progress.
Finally, it is necessary to reset the data. Data is at the core of retail, everything you do depends on it. Most retailers understand the importance of data to operate at scale and at the speed of market changes. But there is a big difference between being aware of data and relying on data. To rely on data, retailers need the organizational muscle, systems, advanced digital technologies, workflows, governance, etc., to act consistently on information, a natural part of operations and decision-making.
This retail reset must happen now and encompass all six imperatives. According to the study, retailers that move toward change will be in the best position to stake. For shareholders. For consumers. For employees. For partners. For the planet. And for the future.