Creating stores of the future relies on solving causes not effects
By Ged Scheuber, COO, Rotageek
Faced with higher inflation and weak consumer confidence, today’s retailers are battling for customer loyalty. With changing spending habits, declining in store footfall and a constant battle between online and bricks and mortar stores, retailers are under serious pressure to maintain profit. This is why finding the right balance between these physical and online worlds is vital for ensuring the future of their business.
In response to these worrying trends, many retailers are understandably reassessing their priorities with a view to cutting costs and making efficiencies. Last week New Look announced it had identified 60 stores for potential closure, with thousands of staff facing redundancy. This comes just weeks after similar moves by loved High Street brands such as B&Q, M&S and Sainsbury’s. These retailers reacted swiftly to disappointing festive results with restructuring and/or store closures. With business results continuing to reveal serious issues across the sector, many other retailers are likely considering similar moves.
This hints towards a somewhat reactive nature in retail - solving effects of deep-rooted problems rather than finding a way to prevent the cause. For example, store closures and job cuts are inevitably seen as an immediate solution to declining profits. While that might seem like a sensible short-term decision, stores of the future should be looking, perhaps counter-intuitively, at longer-term investment that will prevent future losses.
Focusing on the customer
A short-sighted approach to falling profits can block more deep-rooted issues from view. As we saw with Toys R Us, sometimes it isn’t the end-product (people haven’t stopped buying toys) but the buying process itself that causes the issue. If you can’t compete on price and the ease of buying via the internet, focus on leveraging your unique retail footprint. Companies like Nationwide have invested in creating amazing in-store experiences, extending opening hours, reducing queue wait times and having experts on hand to answer queries. Such an approach makes a real difference to customer experience, brand perception, and, ultimately, brand loyalty.
Poor staff scheduling is one clear example of a business process that is often shockingly outdated. As mundane as it seems, failure to pay enough attention to staff scheduling can lead to lost employee and customer trust and cause long term reputational and financial damage to the business. It is the synergy between dedicated employees and outstanding operations that push forward or hinder customer engagement and success across the entire business. This is why it is vital that retailers focus on planning ahead and preventing issues at the core – rather than addressing the effects when they occur.
Data-driven problem solving
The reality is that future success for British retailers relies on a shift towards a more proactive mindset. Retailers already have a lot of valuable information about their business to hand, yet many fail to leverage this data within decision-making. This makes it impossible to understand and create the changes necessary to meet the challenges of retail in 2018. This effective use of data and analytics is how retailers can identify and effectively address inefficiencies and even seize opportunities to capitalise on rapid change.
For example, predicted growth in spending over stronger shopping periods such as Christmas means retailers may need to adjust their employee scheduling to deliver on customer expectations. In the same way, a sudden shift to online rather than physical sales might require asking some employees to work in warehouses rather than retail shops, whereas results below the forecasted level might mean adjusting recruitment plans to balance demand.
Creating stores of the future
To win amidst this uphill battle to protect their business, retailers must aim to understand the demands of the market, and be prepared for whatever obstacles they face.
This means examining smarter technologies in the places they are needed. For example, sometimes technology will deliver more concrete results if focused on solving issues in the backend – such as scheduling – instead of adding flashy in-store tech that does little to secure real improvements. Processes that once required manual input can be better handled by smart platforms and algorithms that can produce significantly quicker and more accurate results. This smart approach can put the businesses back on the front-foot so it can win in today’s tough marketplace.
In addition, intelligent data-driven technology can arm organisations with a good operational overview and metrics to showcase exactly where the business sits and highlight improvements that can be made. Investing in these improvements will be a brave choice in times of store closures and redundancies but for companies that get it right, has the potential to drive real results.