Digital TransformationRetailThree-quarters of retailers say they need to reinvent themselves: New report outlines how

Three-quarters of retailers say they need to reinvent themselves: New report outlines how

“For retailers,” says a new report from the World Retail Congress, “good is no longer enough [and] being average is punished hard.”

“For retailers,” says a new report from the World Retail Congress, “good is no longer enough [and] being average is punished hard.”

Created with OC&C Strategy Consultants, eShopWorld and WPP BrandZ, “High Velocity Retail” [free, registration required] points out that “the barriers of entry to previously high-walled retail marketers have been knocked down.”

“A variable cost world”

A key driver, the report points out, is that the current retail environment is now “a variable cost world which allows insurgent brands to achieve reach without scale.” Instead of scale, it’s now more about meeting (or exceeding) customer expectations. Here’s a visual from the report, depicting the progression to the current variable cost model:

From the report, "High Velocity Retail"
From the report, “High Velocity Retail”

Seventy-five percent of retailers surveyed for the report indicated that their model needs fundamental change if they are to keep up with the industry’s evolution. To get there, the study advises that organizations need direction as well as speed, by defining new performance metrics and then making decisions and deploying capital quickly.

The report points to several characteristics of successful models, some of which sound fairly obvious. In the age of global e-commerce, for instance, shoppers should see local currency, pricing delivery options, and a checkout experience that continues the local branding. Delivery should be fast, returns easy, customer service efficient, and the brand experience consistent across touchpoints.

But there’s now a new emphasis on speeding up operations dramatically, such as the every-ten-minute price changes for the average Amazon product, Levi’s laser tech that creates washed-look jeans 50X faster than previously, or Vodafone’s AI chatbots that enable online purchases to be completed in a third of the time.

New models, rules

There is also a flurry of new retail models that cut out entire segments of the old version. The retailer Wish, for instance, sells private label products directly from Chinese manufacturers to eliminate the need for retailer operations. Store creation service Storr lets anyone quickly create their own online retail store front, pick their products and process sales through Apple Pay and PayPal.

Whether a new startup or a venerable retail brand, the study helpfully provides six rules for winning in this High Velocity Retail world:

  1. Be the best at something that matters – and pick your battles. E.g., maybe focus on customer service and physical store look/feel.
  2. Choosing where to follow is as important as choosing where to lead. For instance, most organizations don’t need to build their own tech, but can now choose to subscribe to cloud-based infrastructure as needed.
  3. If you’re not a winning model, you’re a losing model. The report identifies four winning models, based around value, customer solutions (e.g., supporting a healthy lifestyle in addition to being a food retailer), the uniqueness of the brand or the platform.
  4. Build your retail ecosystem, with partners as needed.
  5. Be fearless and set your teams free – with clear objectives for each team.
  6. Go beyond borders to build your tribe.

Subscribe to get your daily business insights

Whitepapers

US Mobile Streaming Behavior
Whitepaper | Mobile

US Mobile Streaming Behavior

5y

US Mobile Streaming Behavior

Streaming has become a staple of US media-viewing habits. Streaming video, however, still comes with a variety of pesky frustrations that viewers are ...

View resource
Winning the Data Game: Digital Analytics Tactics for Media Groups
Whitepaper | Analyzing Customer Data

Winning the Data Game: Digital Analytics Tactics for Media Groups

5y

Winning the Data Game: Digital Analytics Tactics f...

Data is the lifeblood of so many companies today. You need more of it, all of which at higher quality, and all the meanwhile being compliant with data...

View resource
Learning to win the talent war: how digital marketing can develop its people
Whitepaper | Digital Marketing

Learning to win the talent war: how digital marketing can develop its peopl...

2y

Learning to win the talent war: how digital market...

This report documents the findings of a Fireside chat held by ClickZ in the first quarter of 2022. It provides expert insight on how companies can ret...

View resource
Engagement To Empowerment - Winning in Today's Experience Economy
Report | Digital Transformation

Engagement To Empowerment - Winning in Today's Experience Economy

1m

Engagement To Empowerment - Winning in Today's Exp...

Customers decide fast, influenced by only 2.5 touchpoints – globally! Make sure your brand shines in those critical moments. Read More...

View resource