Industry
The Wireless Consumer- shaking retail to the core?
Paul Sherratt looks at the way wireless technology is changing retail T
he retail market in general is changing at the fastest pace in history. For many retailers and brands this is a scary
proposition as one of the main reasons for change is that the power has shiſted to the consumer. In the 1970s and 80s it was the brands that
dominated but by the 1990's, retailers such as Tesco had taken control and were experiencing aggressive growth and exploiting increasing connectivity to the end user through data capture and analysis through schemes such as Tesco Club Card. In today's world the power is firmly in the hands of the consumer and nowhere was this more apparent than during last year’s Christmas period. Brian Hume, founder and CEO of Martec believes that Christmas 2013 was the first ‘Omni Channel’ Christmas where "Consumers got it and many retailers didn't"! Retailers in general reported good online
business throughout the Christmas period as consumers were able to exploit multiple ways of gathering price and product information. However, many retailers reported disappointing store sales; they weren't able to join up online and store sales. From data analysis it appears that many
consumers researched in November and subsequently purchased in December. This was fine for those businesses that could react accordingly, but for many ‘clicks and bricks retailers’ they were caught out by this change in consumer behaviour.
“From a consumer perspective, free Wi-Fi allows them to research, photograph and even email products to friends and family for purchasing advice and, perhaps most notably, to price compare.”
Stores started to stress about poor sales and
potentially heavy terminal stocks and some, such as M&S, began their sales period in early December- unprecedented in recent times - leading to large margin erosion. By mid
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December, having completed their research, many consumers headed to the high street only to be confronted by long checkout queues thus driving them back to purchase online and further away from bricks and mortar retailers. The smarter consumers learned to select
products in store and order online, using their mobile devices, as ‘click and collect’ orders where the lines at collection points were much shorter. When it was too late to be of delivered in time for Christmas, the consumers finally switched back to buying in store.
THE ALL POWERFUL CONSUMER These shiſting usage consumer shopping
patterns and more importantly, the way technology was used to adapt to circumstances, caught many retailers by surprise and gives us some interesting pointers towards future customer shopping patterns. Consumers now have the power to research
product and price seamlessly whether browsing in store (through 3 and 4G as well as Wi-Fi) or at home online. They can choose whether to have home delivery or click and collect, even through online stores such as Net a Porter. Dropbox sites are also growing all over the country giving the consumer additional places to collect or drop parcels.
IN STORE WIFI Many retailers are debating the benefits of
offering free in store Wi-Fi in a bid to embrace these changes and to enable consumers to have an even stronger in store experience. However the jury is out as to whether the greater benefit is for the retailer or the consumer. From a consumer perspective, free Wi-Fi
allows them to research, photograph and even email products to friends and family for purchasing advice and, perhaps most notably, to price compare. From a retailer point of view, they can
understand exactly who is shopping in store, where they are in store and can subsequently communicate with consumers whilst they are in store and also reconnect once they have leſt.
The price comparison element of this issue is
perhaps the most controversial and appears to be driving an increasing own label strategy for many brands and retailers where products cannot be compared and hence their retail price points and margins can be maintained. Retailers are also looking at potentially rolling out digital displays where prices can be changed centrally at head office across all stores to react to dynamic online price changes.
TWO PRICE MANAGEMENT SCENARIOS Ultimately this is likely to lead to two price
management scenarios: a) The consumer price checks an item that
they want to buy and requests a price match from yourselves. You then use a wireless device to access an internal application which decides whether to price match in full or how far to discount using rules relating to CRM (are they a frequent shopper for example).
b) You agree or disagree to price match and
automatically send an alert to the company pricing manager who can review whether to make this price change across the chain/region in real time through digital displays enabling them to react to price pressures whether they be on or offline.
What is clear, with either of these scenarios, is
that the consumer is instrumental in driving these changes and that the speed with which retailers can react to such situations will become ever more vital in this fast paced world. This type of approach does not need to be limited to a chain. There is no reason why someone with a solid stock control and margin reporting system, cannot react in a similar way when faced with price comparison information. Advances in technology mean ever
increasing transparency and for those that can embrace these changes and develop systems to react accordingly, it does not necessarily mean the death of traditional retailing- golf or otherwise.
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