Times are tough for retailers. The cost of running their business is rising, margins are shrinking as they compete with online players, and new technologies have lowered the barriers to entry for challenger brands that are disrupting sales models across virtually every product category.
Meanwhile, customers now have so much choice and information at their fingertips that they know more about products than the average salesperson. This shift in dynamic has flipped the buying journey on its head and redefined the role that retailers play in driving a purchase.
From new in-shop technologies to a better mobile experience, through to modernising supply chain and training employees, brands are transforming the way they work from the inside out to succeed in a customer-driven market. In our latest Retail Trends Report, we asked leading retail brands and influencers what 2018 has in store for one of the world's most exciting but challenging industries.
Traditional bricks and mortar shops continue to shut their doors, yet we're also seeing a wave of new shops opening. Even online-only retailers are setting up physical locations to establish themselves as more than just an ecommerce platform and build a physical presence in consumers' lives.
The shop is no longer just a place to make sales, it has become a playground for shoppers to interact and feel products they're interested in. It also gives them access to services that aren't available online; a place where new technologies such as Virtual Reality make it possible to excite customers and build loyalty, as long as retailers can deliver a worthwhile experience.
There's no escaping the shadow cast by the Goliaths of online retail. With deep pockets and a sky's-the-limit approach to distribution, they've made it nearly impossible for retailers to compete on logistics or supply chain excellence.
But these companies are merely platforms. Many people will continue to vote with their wallets and buy from online marketplaces, but an equally large proportion of shoppers want more from the retail experience. They want to feel valued, which is why instead of competing with Amazon and Alibaba directly, brands will increasingly revert to what they're good at: a personalised service and genuine human interaction.
The easiest way to lose a customer is to promise that a product is available only to disappoint them after they've made a purchase to find out it's sold out. Retailers in the UK alone lost £3.9 billion due to late deliveries over the 2016 winter holiday period.
It is increasingly difficult to predict and deliver on consumer demand at a time when today's hot product can be tomorrow's inventory nightmare, and this pressure is only compounded by demand for monthly reports from stakeholders. Retailers need a modern supply chain that makes the unpredictable more predictable and that caters to every channel used by today's customers, and they need to take a closer look at their operational data to achieve this.
Lost to late deliveries in 2016
The people that retailers put on the front lines do as much to define how customers view their brand as their website, shop design, or the products themselves. Shoppers choose where to buy from based on the quality of service they receive, and retail employees need the tools and training to deliver on people's rising expectations.
After years of focussing on cost-reduction and efficiency to compete on price, the pendulum is swinging back to service. Retailers are re-investing profits in their people, and in the technologies they need to make the in-store experience as seamless as online purchasing.
Disruption is a constant in the retail industry. The latest wave of challengers is taking the burden of choice away from customers, instead offering them curated subscription services that align with their needs and lifestyle.
Companies such as Dollar Shave Club, Birch Box, and Hello Fresh have proven that subscription-based retail is a viable business model, and established retailers are rightfully exploring ways to compete. In addition to rethinking their distribution chain, this requires brands to gain a better understanding of what consumers want even before they want it, which is why they are investing more than ever in the analysis of customer data.
Find out what 2018 has in store for retail in our complete Retail Trends Report. Get tips from some of the industry's most respected influencers on what to expect in the year ahead, gain insight into how leading brands have set themselves apart from the pack, and learn how Oracle is helping retailers to rethink their approach and keep evolving at pace.Download the report