For the past couple of years, retail survival has largely been about controlling the controllable. But in 2011, as spending starts to loosen in the face of a brightening economy, retailers have a lot more to look forward to, according to Natalie Berg, global research director for Planet Retail, London.
Speaking at the National Retail Federation’s 100th Annual Convention & EXPO, at the session, “Power Players in Focus: How to Be a Retail Winner,” Berg said that to be successful in 2011, retailers need to do the following:
• Focus on core assets and drivers of profitability;
• Aim for a targeted globalization approach;
• Leverage multichannel; and,
• Put shoppers at the core.
“A shopper-centric strategy will be crucial in 2011,” said Berg, who added that a honed focus on the customer has become critical to success.
Going forward, shoppers are looking for value and a sense of discovery. Berg pointed to Carrefour as a good example of a retailer that has added discovery to its mix. The chain is trying to reinvent its hypermarket concept with a weighty use of in-store technology and such added services as child care and hair care.
Partnering with specialists will also be a top success strategy in 2011, according to Berg. Carrefour and Virgin Records, for example, have entered into a global partnership in which Carrefour has expanded its music offerings with Virgin in-store shops. And J.C. Penney continues to expand its ongoing partnership with Sephora by rolling out more in-store beauty shops.
“Use technology to capitalize on frugality through new formats and innovative promotions,” Berg said. Applications like ShopKick are engaging customers; promotions such as Groupon on Facebook provide innovative ways to grab interest and generate sales.
“Multichannel is the way forward,” she added. “And retailers will have to strike a balance between value and discovery.”
DYNAMIC BUSINESS: Successful retailers of the future will be those that embrace the concept of “dynamic business,” said Kirill Tatarinov, corporate VP, Microsoft Business Solutions, Microsoft.
“A dynamic business is one whose operations are seamlessly connected, that thoroughly understands its customers’ preferences, and maximizes the productivity of its people, according to Tatarinov, who addressed attendees at the NRF session, “Making the Retail Business Dynamic.”
“To become a dynamic business,” Tatarinov explained, “companies must put themselves in a position to meet trends and adopt new practices before consumers start demanding them.” This is a change from today, a time when “consumers are moving faster than the retailers,” he added.
As to how retailers can go about making their business dynamic, Tatarinov offered the following best practices:
• Focus on customer-centricity or “clienteling” programs: Research customer information, including birthdays and shopping preferences, in order to be able to cater to desires.
• Provide shoppers a connected retail experience: Whether online, in-store or via mobile device, retailers should present a singular “point of truth” to the customer with seamless execution across all channels.
• Be adaptable: Ensure business processes and systems are able to be modified quickly to meet changing economic and consumer demands.
• Loyalty management: Monitor and manage loyalty programs to encourage the best shopping behaviors from good customers.
• Direct-marketing optimization: Assess marketing program effectiveness, whether online, mobile or in-store, to determine what works and doesn’t work for your company.
• Maximize worker productivity: Provide a connected retail experience between stores and headquarters to ensure associates have timely access to sales, promotional and inventory information to better serve customers.