Mastering the rules of “new retail” goes well beyond ordering online and collecting in store. Defining a value proposition and building customer relationships and new organizational capabilities will form the crux of differentiating your brand in this new “phygital” environment, says Professor of Strategy and Organizational Innovation, Stéphane J.G. Girod.
Over the past five years, physical retailers have been upping their presence on the e-commerce and e-market side. At the same time, digital giants such as Alibaba.com, JD.com and Amazon.com have made their foray into physical retail by creating (or buying) supermarket chains like Hema, 7 Fresh and Whole Foods Market.
Why this double evolution?
To thrive in retail, the next battleground is the creation of seamless omni-channel experiences. This is based on four elements: defining the channels, mastering new technologies, major operational shifts and tackling the organizational side.
Defining channels is essentially a case of being present where one’s target customers are — marketplaces, e-boutiques, social media or physical stores. Retailers must provide access to customers anytime, anywhere and with any device. Tied in with this is using the power of big data and linking the physical and digital worlds through technology and human solutions.
Finding competitive advantage
First, new retail begins by identifying the next source of competitive advantage in this new world. For many retailers, this is not necessarily instinctive. For example, a supermarket belonging to a digital giant like Alibaba will expand into the physical world to maximize sales and traffic where it is already strong: on its digital platform. Conversely, for a luxury brand delivering the very best experience it has to offer in its physical stores, omnichannel strategy will be more about driving online to offline experiences.
If creating seamless omnichannel experiences involves mastering the new world of technologies, it is not just a question of thinking how to standardize the hardware and integrating IT systems. Retailers must also ponder how to leverage the talent of data analysts to keep evolving their offerings in line with what consumers want, and to help shift the traffic where they want it to be. Retailers should be mindful of building the quantity and quality of data the business needs to generate the right level of micro insights.
Shifting supply chain
One area which causes many retailers to struggle is the major operational shifts required by new retail, for instance in the supply chain. For many companies, the holy grail is about having the right product at the right time in the right channel.
Avoiding omnichannel bottlenecks
Perhaps the least understood piece of the puzzle is on the organizational side, where bottlenecks to seamless omnichannel are common. Cases in point are a lack of collaboration between sales teams and channels, poor leadership and insufficient level of nimbleness.
Creating seamless omnichannel experiences in retail is a holistic transformation; not the purely technical exercise many retailers would have us believe.
Professor of Strategy and Organizational Innovation Stéphane J.G. Girod is leading the sessions Reinventing physical retail and Seamless Omnichannel in Retail at OWP liVe in November.
