The retail market is changing but shoppers’ priorities remain the same. That is the crux of the 2013 Achieving Excellence in Retail Operations (AERO) study conducted by management consulting firm A.T. Kearney. Retailers in more than 20countries around the globe, of which 30 percent were apparel-related, answered over 100 questions regarding their strategy, tactics and execution.
How much has changed since the last AERO study in 2010 is apparent by looking at the questions asked. Three years ago, social media didn’t even figure, new technologies were just touched upon and integrated channel retailing was “a distant mirage” at best.
But though many sources especially for gathering customer data are available today, many of them are underutilized. For example, less than half of the participating retailers collect social network data from third-party domains and only eight percent think it makes an important contribution to generating insights. Or, positively put, "leading retailers encourage measurement of the right data, invest in the skills to gain insights from that data, and use those insights effectively to frame future actions," according to Joel Alden, A.T. Kearney partner and co-author of the study.
Despite technology, core principles are keyYet despite the technological changes, core retailing principles still apply: Retail is still a people-driven business in which employees, customers and their interactions take centre stage. “One of the biggest secrets to success is the simple notion of engagement: listening to your staff and your customers,” confirms the study. Smoothly running operations are also key, especially when it comes to managing shrink and out-of-stocks.
Other core areas are managing the multichannel environment and the importance of field managers and front-line staff. Though the latter gain valuable insights through interacting with customers on a daily basis, only few retailers take full advantage of them. "The problem today is a lack of formal requirements or processes to gather these employee insights. Leading retailers create formal pipelines that capture and use these insights," explains Adam Pressman, A.T. Kearney principal and co-author of the study.
For those retailers feeling a bit overwhelmed by the recent changes the retail landscape has gone through, the study’s notion that “the more things change, the more they stay the same” will come as a comforting thought. Though the role that bricks-and-mortar stores play will become smaller, they will still be firmly planted at the centre of the retail experience.
“At heart, retail is a people business, with traditional principles that center on maximizing the value of human interactions. As always, retailers should seek to improve analytics to drive better performance, support field leaders to reduce their administrative burden, highlight the value of their front-line staff and achieve meaningful goals,” concludes the 2013 AERO study.
Image: Sources of customer data / 2013 AERO