Retailers have always focused on their customers, but changes in the last three to five years have forced retailers to understand their customers on a deeper level in order to differentiate in their chosen markets, according to Jerri Traflet, director of retail solutions for Redwood Shores, Calif.-based Oracle Retail.
During the TOPSS session “The Next Generation of Retailing—The Future Is Now,” Traflet discussed how the retail industry has split into two distinct camps —one focused on price and scale (such as Wal-Mart and Tesco) and the other focused on targeting consumers and service (such as Abercrombie & Fitch and Best Buy).TOPSS is produced by Chain Store Age and Retail Technology Quarterly.
Historically, retailers with good pricing and product selection were together in the middle, and there was room for many players. But the split in the industry has been caused by several different changes in the consumer market.
Retailers often forget that consumers are extremely diverse, Traflet said. “We try to put them into little demographic categories, but that doesn’t always work. Understanding them on multiple levels allows retailers to truly focus their product, pricing and service offerings to the customer segment that delivers profitability.”
Retailers should also keep in mind that consumers are inclined to reject unwanted marketing techniques. “Spam and snail mail are usually trashed immediately,” Traflet said. “Therefore, businesses must find a way of getting through and delivering information that they will value in the shopping process.”
The Internet has changed the expectations of those who shop in all channels. “[Consumers] expect product information and comparison tooling like they have on the Web,” Traflet said. “They want access to competitive pricing information and they want to know product affinities.” Therefore, “Webifying” the store and call center is a big challenge for today’s retailer, she added.
Since it’s hard to compete against low-price retailers, Traflet also noted that this is why many