With House of Fraser going into administration and then being brought by Sports Direct it seems that we may be facing some form of retail Armageddon and certainly the headlines from the press seem to cement this point of view.
Maplin, Toys R Us, Pound World, Fabb Sofas, Henri Lloyd, Conviviality, East and many more have all gone to the wall in 2018.
The traditional bricks-and-mortar retailers are clearly struggling to compete with the technologically advanced digital companies. Of course, the headlines aren’t total nonsense in terms of the threat that digital-first players present.
If you just think that Amazon takes 50 cents in every dollar that is spent online in the US, then you can start to see the threat. Amazon and the other major digital players threat will only increase as the traditional retailers struggle to transform at pace.
The rise of these large pure plays has had a huge impact on the retail market and is causing the entire industry to fundamentally change the way it sells and interacts with customers.
While retailers are aware of the changing landscape, many are still struggling to adjust to the new reality at pace. To keep up with the market and secure their share of customers, traditional retailers must commit to digital transformation and to streamline, differentiate and enable new business models and revenue streams.
But implementing technology just for the sake of new technology can result in wasted time, effort and money, and can have damaging effects on customer satisfaction. To be clear, technology is an enabler. To win, retailers must look to fix a pain in the customer experience — they must remove any points of friction. But how? Below are some strategies to consider.
: Launch an Innovation Lab
Launching an innovation lab is a great way to experiment and test new technologies that can improve the customer experience.
: Agility Matters
It's rare for a retail innovation not to involve technology somewhere. New customer offerings or experiences all involve technology — if only to power them in the background.
The lesson here is that agility is needed to enable adaptation over time. Rather than investing in a single holistic solution to last 20 years, solutions need to be built to be evolved over time to enable them to connect to new customer touchpoints as they appear or add additional logic. For this, technological agility and adaptability is essential.
: Look to Differentiate
Differentiation has always been key in business and solving a pain point in the customer experience may well become a point of differentiation.
Differentiated offerings can leverage data and capability to enable a truly different customer experience.
The retail market has evolved dramatically over the past decade, and it doesn’t appear to be slowing down. To avoid being a victim of the retail Armageddon, retailers need make a genuine commitment to deliver a digital transformation. By creating innovative approaches to customer experience, retailers can provide the differentiation that consumers seek.
By creating innovative approaches to customer experience, retailers can provide the differentiation that consumers seek.