South African retailers should revisit their strategies to ensure they reflect a strong differentiated position from a consumer segmentation and competitive point of view. The key is to integrate a multi-channel, consumer-centric focus into the offering, including the assortment, services, marketing and promotional strategies. Stores are key as platforms where the customer experiences innovation. It's where innovation can differentiate.
Retailers should also consider broadening their collaboration capability to leverage the full strength of their merchandising, marketing, supply chain and store operations functions, as well as using leadership, incentives and measurements to drive the necessary cultural shift towards innovation.
Being vigilant in integrating processes and technology to enable enhanced capabilities around consumer-centric activities is a further essential component. It's important to ensure that innovation enhances the shopping experience, rather than destroys it. To achieve this, retailers need to first ensure that the basics are in place.
Features we are likely to see in 'next-generation stores' include the single point of sale (PoS) migrating to multiple points of service as customer-focused systems become increasingly pervasive. There will be more and more in-store developments for both employees and customers as both use information on the shop floor. These will include guided shopping, self-checkout, customer self-service, dynamic digital display merchandising and new payment options including e-payment.
These developments will occur across market sectors, and retailers will be able to select from the spectrum of options available according to their environment and their customers' requirements. Innovation should enhance the shopping experience, rather than overwhelm it, and should always deliver a return on investment (ROI) for the retailer.
Guided shopping will work in the form of a device attached to the trolley which acts as a personal shopping assistant. The shopper can enter their list and be guided on the most efficient route through the store. The device also allows the customer to scan as they go and provides promotion-accurate price verification, tailored cross- and up-sell promotions and offers pre-order deli, bakery and other services. Guided shopping is expected to deliver rapid ROI, boost margins and increase shopping frequency, as well as spend.
Self checkout, which is already a fact of life in some European countries, may take longer to be accepted in South Africa. This capability offers seamless transaction integration with existing store PoS and consistent functionality with self-checkout and PoS. It delivers improved customer satisfaction and enhanced customer service through strategic redeployment of staff across the store.
Customer self-service is an ever-growing field which has the potential to increase revenues and loyalty, reduce costs through labour savings, integrate to store pricing and promotions, and be self-funding through collaboration with partners and suppliers. The capabilities of this technology include providing special or out-of-stock ordering, delivering in-depth product information, providing product locators, delivering targeted promotions and offering a greater assortment of merchandise.
Dynamic digital display merchandising can be customised for each store to deliver targeted marketing and promotions. In addition, displays can be determined by customer traffic data and linked directly to available inventory. This capability has the potential to boost revenue by 15 - 30%, increase product exposure and boost product recall by two to five times.
Finally, payment options will soon include encrypted signature verification, cell phone-based purchases and promotions, finger scan-based account debits, and electronic coupons and payment. All of these advances will result in faster checkout, reduced fraud and less cash handling.
All of these developments are great for the consumer. Rather than rushing to build expensive, innovative stores that don't deliver profits, retailers need to keep things in perspective by focusing on those developments which will deliver the best return on investment.
