Mobile commerce, millennials and faster fulfilment will drive retail innovation this year, according to commercial supply chain specialist Manhattan Associates.
It predicts a rapid migration to more personalised shopping, with mCommerce presenting big challenges as well as inspiring innovation.
Emerging Asia is still the fastest-growing region of the global economy, says the company, with strong labour markets and a growth in disposable income expected, especially in Southeast Asia. This means a continued rise in consumer spending along with mounting pressure for retailers to keep up with consumers and their rising expectations.
“Millennials particularly demand seamless experiences across multiple channels, as well as more and slicker order and fulfilment options,” says Manhattan’s Southeast Asia MD Richard Wright.
This means retailers must make informed choices about not only what is right for the consumer, but also right for the business.
Wright says retailers will have to make some fundamental changes this year to address growing consumer demand, expectations for a more personalised shopping experience and increased use of mobile technology.
“We have identified five key areas in which retailers can focus attention, not only to achieve customer satisfaction but also to drive business growth and profitability.”
He defines the five key areas as:
- Making the shopping experience personal and frictionless,
- Recognising the power of millennials,
- Embracing mobile technology to achieve customer-centric retailing success,
- Delivering faster; and
- Being more flexible with returns.
“The anonymous shopping experience has had its day,” says Wright. “On the back of digital personalisation success, retailers are turning their attention to the in-store experience, recognising both the rise in customer expectation and the differentiation personal service can offer.”
He says this experience can range from recipe ideas and ingredients lists in supermarkets to intuitive, customer-inspired fashion recommendations. “Retails have the chance to transform the in-store engagement.”
Research by the group last month has shown that tailored shopping experiences will encourage more shoppers to engage with the in-store experience. In a consumer survey, 49 per cent of respondents said they would interact more with store staff members if the shopping experience was personalised.
“When a shopped reaches the point of sale, give them tailored discounts, recommendations based on their shopping history, and even style tips matched to their recent purchases,” the group suggests.
Manhattan Associates also says personal shopping is back. “It is time for retailers to redefine the role of stores, embrace technological innovation that drives both service enhancements and operating margins, and engineer a cultural shift that will enable staff to reinforce brand value and deliver personalised service across every channel.”
There is a need to redefine the role of the store assistant. As consumers become ever more connected, store assistants need the knowledge, skills and desire to offer the best possible shopping experience.
Dissatisfaction impacts brand reputation
“Failing to give customers what they want will result in dissatisfaction and more complaints, which can have a longer-term impact of brand reputation and sales.”
In Malaysia alone, says the company, the National Consumer Complaints Centre received 41,531 complaints in 2014, a 28 per cent increase for the previous year.
Retailers can avoid such dissatisfaction by educating their store staff, but more is needed than just product information, says Manhattan Associates.
Frontline staff need access to stock levels across all stores, warehouses and distribution hubs so they can sell the entire network of available inventory rather than just the stock in an individual store.
Having an overview of enterprise stock and being able to offer delivery alternatives will keep customers loyal.
“We predict that many retailers will being emulating the experiences of companies like Parkson, and change their structure so the store assistant plays a fundamental part in the buying process from start to finish, and acts more as a personal advisor.
“However, a cultural change such as this cannot happen unless it is championed from the top down. Board-level executives need to buy into the potential results possible from investment in staff and customer experience initiatives.”
Manhattan Associates believes millennials, who constantly interact with the online world, are frequent yet demanding shoppers.
“We think it is time for millennials to take the lead on what they would like from a retail experience, and help retailers drive new strategies and initiatives. With 40 per cent of Millennials happy to give up cash completely, and 91 per cent opting to use a self-service checkout, it is clear these 18 to 34-year-olds shop differently to the traditional retail model. They adapt to technology quickly and expect retailers to do the same.”
Another finding from the company’s research is that customers shopping via mobile devices spend up to 66 per cent more than those solely shop in a store. But as mobile devices now play a more important role in not only browsing and buying, but also paying for goods, the potential is even greater.
Manhattan Associates predicts that retailers will use more beacons this year to augment the in-store experience.
“Not only are these devices cost-effective, they communicate directly with smartphones through Bluetooth, meaning stores can lure in passing customers with offers and discounts.”
Store assistants can also use mobile technologies to enhance the shopping experience. Tablet devices can enable assistants to deliver a personalised experience. They can access an online product catalogue populated with a shopper’s purchasing history, wish lists, online shopping cart and return history, improving their ability to up-sell and cross-sell.
Meanwhile, POS technology is transitioning from fixed-point transactions to mobile engagement, offering payment acceptance “on the go” for all of a customer’s orders in a single transaction. This can be by cash, cheque, credit or such systems as Apple Pay.
Advanced mobile POS technology can handle the most complex return situation with the least amount of friction, regardless of which channel initiated the order or how the customer chooses to receive credit.
While price is the main attraction for 67 per cent of shoppers, across both online and in-store shopping, fast delivery is important for 51 per cent, and flexible returns for 42 per cent.