When lavish holiday displays and Black Friday floorsets no longer excite customers, retail and CPG companies were left to navigate the ever-changing consumer buying habits in 2015. By the time they identified and reacted to consumer tendencies, the behaviors dramatically changed again. As the purchasing landscape continues to broaden, retailers are on a mission to re-ignite customer excitement and maintain competitive advantage.
Retailers, it’s time to shift your focus from outdated and obsolete business practices and turn your attention to these trends in 2016 and download our full 2016 Industry Outlook.
The Connected Experience
Finding the right experience for your consumers and providing them with efficient and effective service is key for 2016. It’s all about the connected experience — consumers don’t care how you’re getting their products to them, but that their experience is easy, timely and the product is within their price range. Retailers need to provide an invisible gateway into their capabilities, services and products – consumers don’t want to see any boundaries. Figuring out how to create those operational efficiencies and streamline the process without disrupting customer service is the next step for retailers.
Continually Changing Buying Behavior
In 2015, retailers began to lag behind consumer buying behavior and preferences. To get back up to speed, retailers need to develop proactive insight into consumer buying trends and create an exciting consumer-engagement program that utilizes multiple touch points. To thrive in 2016, companies need to understand that while consumers value convenience and price, they will be drawn to the most satisfying experiences. To combat these quickly evolving consumer behaviors, retailers can focus on numerous smaller targets and trends rather than major investments in a few areas. Both business and IT agility are required to keep up with the consumer and ahead of the competition.
Obsolete Business Practices
80% of retailers don’t get it – they’re trying, but not in the right ways. And we’re going to see that come to life when consumers are returning online items back to the store, especially unique items that have never been stocked in the stores. Businesses don’t have the right processes in place to handle this backflow of goods nor do they have efficient ways to reprocess the returns. Old business processes may have been effective in a highly store-centric model, but are costly and are not efficient as the ecommerce-centric model expands. Retailers need to retire reactionary operations and develop strategic, engineered processes. Creating efficiencies “behind the curtain” will be crucial to delivering the experience consumers are after on center stage.
Holistic Organizational Change
Good execution is going to be the biggest challenge for retailers in 2016. Retailers have been heavily focused on apps and online service developments to address changing buying habits, but it’s not just about the digital bells and whistles for consumers. It’s about creating a holistic organizational change that is relevant for your company. For example, distribution networks, developed for a store-centric business model, will likely not be efficient for handling a hybrid model of online and store-based sales. On the consumer products side, the sales and distribution model needs to be re-evaluated completely to modernize with today’s shopping habits and points of distribution. For example, your largest customer, Wal-Mart, may have driven your current distribution model, only for you to find that Amazon now requires a different geographic model for your future. Companies will experience a faster benefit by taking baby steps in addressing organizational changes and creating a reliable, all-inclusive change.