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Customer expectation is biggest problem for retail, says panel

As retailers increasingly try to serve consumers across online, in-store and mobile, the main challenge they face is consumer expectation, according to a panel of experts

Customer expectations pose the biggest challenge to retailers attempting to implement omni-channel properly, an expert panel has said.

During the Internet Retail Expo (IRX) 2017, a panel suggested customer expectations are putting pressure on retailers to innovate, especially as consumers become increasingly fickle.

Neil Ellul, customer journey manager at fashion retailer Next, said: “Our biggest problem is customer expectation. They know what they’re looking for when they come into a store, however they also expect us to know at that point. We need to take triggers from customers as to what they are doing.”

But the consumer’s expectation of what retailers can deliver has been led by what services are provided, so retailers have created the problem for themselves, said Ellul.

When retailers began to allow online ordering, they assumed that customers would want to have products delivered to their homes, but now services such as click-and-collect are putting strain on retailers’ systems – all of which were created to compete with online players such as Amazon, he said.

“People didn’t need to collect from the store before. This is actually a problem with e-commerce that we created,” he added.

Now retailers are trying to bridge the gap between online and offline by offering customers a personalised experience that takes into account their previous interactions with a brand across all channels, such as viewing and purchasing habits, returns, locations and browsing habits.

But many retailers are struggling to implement these omni-channel strategies properly because of disparate IT systems or out-of-date processes.

“We are trying to do behavioural personalisation, but the data is out of date as soon as we’re getting it,” said Ellul.

Many observers suggest omni-channel retail is still in its “dial-up” phase, with old-technology retailers unable to keep track of all their stock or customer data, making an omni-channel customer experience impossible.

Also, everyone, including customers, has a different view of what personalisation is or what it should offer.

Read more about omni-channel retail

  • JD Williams’ head of web analytics explains how the firm is using data to provide a personalised omni-channel experience for customers.
  • The omni-channel environment of the retail industry is raising customer service expectations, but very few retailers are responding to consumers on all the channels they offer.

Deepak Anand, general manager for the UK at Shopware, said the disparity between channels could be solved by putting the customer at the core of decisions and considering the customer journey from start to finish throughout the digital transformation process.

“Make the customer a channel and starting thinking that way from day one,” said Anand.

This strategy can include decisions as simple as making sure customers are not given too many options during the payments process, and ensuring that any communications with customers will enhance the consumer experience.

“The consumer is ultimately getting the benefit of the digital disruption that’s going on,” said Anand.

But offering a true omni-channel experience is tricky, said Stuart McMillan, deputy head of e-commerce at Schuh. “You can’t please everyone,” he observed.

Rethink purpose of stores

Customer expectation is forcing retailers to rethink the purpose of their stores, said McMillan. Many will rate their stores based on sales, whereas in the modern retail environment, customers will see some shops as a physical location where they can interact with a brand rather than a place to make purchases.

“If the sale is happening on the website and the store is just a fulfilment point, you have to rethink the model of your business,” he said.

Click-and-collect is one of Schuh’s biggest channels for fulfilment, and the service has resulted in an increase of more than 100% in customers buying in-store stock.

But McMillan pointed out that this “changes the nature of the stores” and requires retailers to have a better idea of their inventory across the business in order to fulfil orders as quickly as online retailers can.

“There is a fundamental change in the model of e-commerce,” he said. “Consumers don’t see the difference between stores and websites – they just want the brand experience.”

In the future, said McMillan, chatbots, voice searching and services such Facebook bots will be at the forefront of retailers’ minds, but five years into the future is too far to look ahead because change is happening so rapidly. “If you’re planning for five years, you’re going to get it wrong,” he said.

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With the rise in customer expectation and in the bid to satisfy the immediate gratification generation, there's no doubt that making fast marginal gains throughout the supply chain has become the prime source of competitive advantage.

But rather than embarking upon a massive IT infrastructure overhaul that will take too long to deliver innovative customer services, retailers need to consider the intelligent use of integrated solutions that can deliver significant marginal gains. From the use of real time information that enables a shift from reactive to proactive supply chain management, to the mix and match use of warehouse technology to reflect different sales models, which could include orders from hypermarkets, convenience stores or individuals online – it is smart integration that can deliver essential supply chain agility.

As this panel discussed, change is happening rapidly and retailers need to be responding now rather than making plans for five years time.

Sébastien Sliski, General Manager

Supply Chain Solutions at Zetes

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