With only weeks left before the end of the 2012, most retailers already have their strategies in place to ensure success and growth for their business in the new year.
We’ve already detailed how retailers in the region are currently, optimistic about overall sales performance, but are still generally neglecting the opportunities found online.
As part of an analysis towards changing this mindset, there are three areas of focus that needs to be considered.
As part of Deloitte’s Christmas Retailers’ Survey, these areas were identified to be Digital, Talent and Finance – all of which are deemed to be priorities as the industry heads into a year likely filled with changes and challenges.
Analyst Rachel Smith warns that some retailers may need to seriously rethink their entire business model if they want to achieve high levels of competitiveness and performace:
Bricks and mortar store retailers are in the midst of a perfect storm – rethinking the traditional retail model will be vital to ensure not only your success but your long term survival.
The way in which retailers compete is dependent on their talent, resources and leverage. The challenges facing retailers are not insurmountable, but they will not be easy to overcome, either. For most, it will require a rethink of the traditional retail business model, particularly in three key areas.
Smith says the biggest priority in 2013 needs to be based around digital, emphasising that a strong strategic plan in this area is paramount in order for a retailer to succeed.
Businesses need to work on identifying their customers, understanding how they use existing technology and exploring what online channels are available, in order to be able to better target and communicate with them:
The time for considering whether to participate in the online market has passed: if you’re in retail you must compete in this space.
While most retailers have a presence across online channels, few truly understand how consumers use the different channels in their purchasing journey, especially the growing medium of mobile commerce.
The customer service offered by any business can make a huge difference when it comes to winning and keeping customers – and cultivating great customer service (online and offline) needs to be a priority for Aussie retailers next year.
This is especially important in light of recent research which found that 40% of shoppers would spend more if offered a better customer experience.
Retailers that fail to invest in their staff also fail to invest in a quality customer experience – meaning lost sales. For smaller scale privately owned retailers, outstanding customer service can be a key differentiator.
While online retailers can offer a cheap and fast shopping experience, customers still crave information and the personalised service from a proficient and personable assistant.
Internal operation is also tied into this, with a need to be transparent with staff around business objectives, individual responsibilities are and how effort may be rewarded.
It’s suggested that this can help improve productivity and employee engagement, which in turn increases customer loyalty and satisfaction.
The third priority listed is that of structured financial operations.
Although not then most exciting topic, retailers nevertheless need to focus more on their core business, while simultaenously eliminating under-performing formats, streamlining operations and consolidating support functions.
While the Australian dollar remains strong, Smith also proposes that businesses consider direct importing to improve gross margins, while also taking a hard look at locations:
Shifting the emphasis of supply chains may be worthwhile – specifically, taking advantage of lower costs in locations other than China and shifting some sourcing closer to final markets to reduce transport costs.