Taking risks key to retailers survival- report
Retailers need to speed up the pace of innovation and think like technology companies in order to survive, according to a new report.
The report, from retail marketing firm Conversity, found that companies that have traditionally thought of themselves purely as retailers need to consider how they can adopt more novel approaches to winning and keeping customers. In practice, this means being prepared to be bold and take risks.
Those who are willing to embrace change, learn from new initiatives and think like technology companies will be the most robust retailers in a challenging environment
Following a 22 per cent decline in profits last year, John Lewis has promised to “reinvent” its high street stores and improve the customer experience, by embracing innovation more readily.
With the challenging retail environment seeing several companies go under in recent times, increasing this pace of innovation will be crucial if retailers want to weather this rough period. For retail expert Conversity, this means being open to taking risks, and essentially thinking like a technology company when it comes to embracing innovation.
As part of this innovation drive, John Lewis has plans to enhance the customer experience both in-store and online, including through the opening of more experiential stores, and a new technology platform designed to create a more seamless customer journey. Sister brand Waitrose is revamping its loyalty scheme to provide personalised offers and product recommendations, in response to customer feedback.
For Dave Stark, CEO of Conversity, these attempts to do something a little different and add greater personalisation to the customer journey are a bold yet positive move, and represent an approach that the rest of the sector needs to replicate.
Stark said: “John Lewis has seen a sharp drop in profits, but is looking to immediately do something to reverse its fortunes, by listening to customers and focusing on fresh initiatives designed to align with modern consumer behaviour. This drive for a more fulfilling, more personalised customer experience will enable the retailer to position itself at the forefront of innovation in the sector, and the fact that the company is prepared to take a few risks means it will be adaptable to the needs of customers in the future. This is an approach that every retailer should be looking to take if it wants to avoid becoming another administration case.”
To kick-start this greater pace of innovation, and ensure a long-term commitment to more novel approaches, Stark believes that retailers need to take a leaf out of the book of the most successful global technology companies, and not just those involved in the retail sector.
Stark added: “The most successful technology companies – think Apple or Google – have got to where they are by doing things a little differently, and by providing pioneering products and services that play to the needs of consumers. Amazon, the world’s third largest tech company by revenues, has made waves in the retail sector recently with the introduction of Amazon Go. Innovation has become ingrained in the DNA of tech firms, and the retail sector as a whole needs to start thinking along similar lines.”
To help bring about this increased pace of innovation, Stark believes that the technology that retailers take on board will be pivotal. When it comes to bringing a higher level of personalisation to the customer experience, intelligent guided selling (IGS) can make a difference.
Stark said: “IGS works by enabling sales staff to provide personalised guidance to each customer, by taking their individual requirements and preferences, and using these to narrow down to a small number of relevant needs-based recommendations. This reduces the overload of choice that consumers often face, which can set a retailer apart from its competitors in the added value it gives to its customers.”
He concluded: “Alongside technology, key to this entire process is that retailers are open to breaking the mould and taking a few risks. Being innovative in retail is about listening to customers and implementing initiatives to meet their needs. If this is done, organisations stand the best possible chance of avoiding the dreaded profit slump.”
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