How do you create and capture value in Retail?
Smart, connected customers raise a new set of strategic choices related to how value is created and captured and how the overwhelming amount of new data they generate is utilized and managed. In omnichannel retailing the source of the value creation (brand building, product awareness) is decoupled from the place of value capture (sales transaction).
My approach is structured around three core channels: Physical store, online and mobile.
The result is a cycle where value is created at multiple steps along the customer’s shopping journey. Consumers select channels based on a broad range criteria, hence how and where value is created and captured depends on the consumer’s preferences.
A rush to change could result in heavy spending with a risk that a headlong adoption of technology will not pay off. Worldwide retailers are expected to spend more than $190bn on IT in 2015, as reported in the Financial Times.
How do you best invest in future success?
Here is my proposed approach:
Develop effective value tracking technologies and connectivity systems to enhance the appeal of the physical store supported by online and mobile.
Expand opportunities for product differentiation, moving competition away from price alone. Knowing how customers actually use the products, technology and retail channels enhances a company’s ability to segment customers, customize products, set prices to better capture value and extend value-added services.
Leverage all channels. The physical store makes a significant contribution to capturing sales, even though the transaction is eventually made online.
The future of retail is solidly anchored in the brick-and-mortar channel and online retailers are now making the move to physical stores in order to provide consumers with a sensory experience that allows them to touch and feel products. Last month The Wall Street Journal reported that Amazon would open a retail store in NYC during the 2014 holiday season.
Additional key questions to be considered:
What data must the company capture, secure, and analyse to maximize the value of its omnichannel offering?
How often does the data need to be collected to optimize its usefulness? And what for?
What is your view? Please share your ideas and experience on the subject.
(To work with me or for more on topics of relevance to leadership, email me at firstname.lastname@example.org or follow me on LinkedIn and Twitter @thinkethandco)