A changing industry

7 must-win battles in Retailing

A changing industry – retailing in 2014 and onwards

The traditional industry boundaries are changing – manufacturers sell directly to customers, wholesale need to act as retailers and retailers manufacture their own brands. At the same time the customers have multiple touch points across channels operating together and want a one brand experience with coordinated products, services and prices.

7 must-win battles in Retailing

Today’s competition is about agility and time-to-market. It is about differentiating service concepts and focusing on adding value for the end-user. The traditional value chain is transforming into customer journey retailing.

The below text is an extract – you can download the entire report at the top of the page.

Sliding sector barriers in retail

For years, vertical integration has been a power game between manufacturers and retailers. It has also been a way to kill complexity in the value chain and slim the processes towards a seamless customer offering across channels.

Slimming the traditional value chain from manufacturing to end-usage is the core of building profit and increasing the end-to-end efficiency and resource utilisation. Direct customer contact is no longer only a retailer’s privilege. Customers choose where and how to purchase. The need for “one-point-of-contact” decreases relative to their online shopping frequency, while there is an expectation of full transparency across channels.

At the same time, “local means global” to customers as supply systems and logistic capabilities open up to delivery around the globe. As a result, future market definition is set by the customer and defined by their behaviour. Suppliers and retailers have to adjust, and the winner is the one who is in alignment with the customers’ needs.

Functional retailing end-to-end

Retailing is about generating traffic and demand. It is about influencing as many processes in the customer journey as possible. No part of the journey is willingly left to others, and both manufacturers and retailers aspire to win this game and gain full control of the end-to-end supply chain.

Retailing today is about being a front-runner on the technological scene to reach end-users as seamlessly as possible – it is also a matter of sourcing and procuring at the lowest possible costs.

Martin Lyngaa Simonsen
Martin Lyngaa Simonsen
+45 2338 0036
Joachim Lupnaav Johnsen
Joachim Lupnaav Johnsen
+47 926 48 336
Charlotte Wandorf
Charlotte Wandorf
+45 4074 5727
Harald Ihlen Møyner
Harald Ihlen Møyner
+47 409 00 829

Customer-centric approach

As customers expect to be recognised across channels and be remembered for their previous behaviour, it increases the demand for retailers to move from multi-channel to omni-channel delivering “one brand to one customer” across channels. An omni-channel approach forces retailers to be present and interact simultaneously in many channels. It increases demands for new structures and processes internally. To prevent costs from escalating, retailers must find relevant growth opportunities in their customer journey management and choose where to play and how to win to ensure profitable transformation.

The 7 must-win battles in Retailing

Retail

The future customers are not loyal to products or brands. They are only loyal to themselves and seek continuously to fulfil their own needs. The phrase “customer is king” is more true now than ever.

Both retailers and suppliers have to be open to complementary services to increase the customer experience, as customer needs do not follow traditional market definitions. If needed, they have to build partnerships to deliver on critical customer requirements. They have to identify new sources of income to add more value to customers.

New supply chain thinking

The key to growth lies within the customer. A comprehensive customer insight sets the direction for increased customer satisfaction and willingness to pay. Winning will also require the ability to transform big data into customer intelligence and make it the focal point for new service offerings in retailing.

Industries, and through them also product categories, are changing. Therefore, category growth is not just about doing more of the same in a more efficient manner. It is about shaping a new category and meeting new demands in the market. It is about merging industries and bundling service offerings in retailing. It is about untraditional thinking in category growth management – and beyond.

Stores appear in new shapes and are no longer forced to be stock-keeping or even physical. Formats are changing and must be flexible to population size and market dynamics. The ‘brand = format’ equation is changing, and retailing is about reinventing network planning and store formats. In the end retailing is about moving goods or providing profitable services to the end-user. New store formats, flexible delivery options, differentiated offerings and uniform digital presence force us to seek new ways of sourcing to ensure a dynamic cost base.