How Retailers Can Adapt to Survive
Although retail was already shifting toward integrated physical and digital experiences, the pandemic accelerated the trend, disrupting incumbent business models. Moreover, agile competitors further widened these gaps in the traditional retail landscape, carving out profitable niches for themselves. Retail has changed drastically, and if organizations are to survive in this alien environment, they'll need to evolve internally to provide seamless customer experiences. Omnichannel retailers must become decathletes, able to compete in multiple events.
Current Challenges and Omnichannel Vision
The retailers of yesteryear would be shocked to see the ecosystem today. Many major brands have gone extinct, while others have adapted to overcome the most common challenges. These hurdles, which future retailers must overcome, can be categorized into customer, business and technology issues. Mounting customer expectations and demands for tailored and personalized experiences have stretched companies to their service limits as they try to promote health and sustainability and rapidly digitize processes.
From a business standpoint, retailers struggle with high last-mile costs, delivery and return problems, plus shrinkage, ops infrastructure, and partnership challenges. Technology-wise, disconnected and siloed stores prevent seamless experiences and lead to decentralized decision making. Additionally, nimble competitors continue to soar as legacy systems, scattered data and undertrained staff frustrates growth for traditional organizations.
Evidently, the customer journey can no longer be linear — it must be fluid to support the customer wherever they happen to be shopping. Enabling a unified customer experience requires sufficient omnichannel vision. An authentic omnichannel approach examines the entire system, cutting across traditional retail siloes. Likewise, retailers must identify and pursue crucial investments as well as build a digital business and operating models to deliver value with speed, efficiency and scale. And by combining people, processes and MACH technology, retailers can establish an adaptable and effortless experience for their customers.
Prioritizing and Realizing the Holistic Omnichannel
A holistic omnichannel approach must be selective; it cannot have sporadic investments. Businesses can deploy a customer-centric and adaptable channel strategy to maximize return on investment and avoid static platforms. Five areas that retailers can prioritize to boost ROI include web, digital store, mobile, platform, and conversations. All of these are interconnected and play off of one another. Web products should utilize search engine optimization to entice new customers and drive traffic into mobile products and stores. The digital store must be personalized, connected and convenient; mobile features can promote key omnichannel journeys while conversational capabilities ensure scalable customer service for digital-dependent companies. Lastly, platform products empower retailers to experiment with propositions and move effectively against customer input.
Next, retailers can bring their flexible omnichannel to life through a robust digital operating model. The enablement process will require joint strategy, product and platform management. The first manifests itself as a digital hub that coordinates across brands, regions and touchpoints, setting targets and focusing on investments. Product managers will build and optimize customer propositions as platform managers drive efficiency and scale across the product portfolio. Furthermore, product and platform services enforce consistency throughout the various landscapes.
A Customer-Focused Key
Though retailers face many challenges, the key to success is reaching the customer, whether in the physical or digital world. And by leveraging a customer-centric channel strategy, businesses can maximize ROI while ensuring adaptability.
Daniel Smythe is the vice president of retail and hospitality consulting at EPAM Systems. With more than 20 years of consulting experience, Daniel Smythe has led complex transformation programs at leading companies including Walmart, Target, Marriott, and Delta Air Lines. His expertise lies in growth strategy, business model innovation, cost optimization, organizational restructuring, channel integration, merchandising and supply chain transformation.
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With more than 20 years of consulting experience, Daniel has led complex transformation programs at leading companies including Walmart, Target, Marriott and Delta Air Lines. His expertise lies in growth strategy, business model innovation, cost optimization, organizational restructuring, channel integration, merchandising and supply chain transformation.