New world order has changed the market dynamics and customer behaviour at large.
The new market realities have presented several challenges for the retail industry to attract, engage, and sell to their customers.
As the challenges seem to stick, it is on the retailers to adapt smart retail solutions and survive amidst rising competition.
It is a tumultuous phase for the retail industry as they are faced with new and rigorous challenge. The industry is undergoing transformation and retailers must deal with some of the burning issues and improve their adaptability.
As the Covid-19 struck businesses, both big and small, there emerged new retail challenges last year without any warning. The pandemic disrupted every aspect of the industry, from in-store operations to supply chain to consumer engagements. It is more than a year since a new market order was adopted across the world, but the retail industry is still undergoing a tumultuous phase in terms of customer engagement and sales.
One of the most uphill tasks for the retailers has been reaching self-isolating customers and increasing their tally of sales. Tech-savvy customers spend considerable time researching their purchases and emphasize the entire customer experience before committing to purchase. This phenomenon has diminished brand loyalty and presents a unique retailing problem. The retailers must find innovative retail solutions to engage customers, both existing and potential. Let us look at some of the challenges that B2B retailers face today.
Across the globe, physical retail stores are suffering. Due to the threat that the covid-19 virus possesses, the public is not yet ready to go out and is wary of unwanted social contact. The closure of offices has also added to the woes of the retail industry. The effects of the aforementioned factors on the revenue coupled with the burden of continued overheads, like rent, wages, and inventory, could prove fatal for the industry. Apart from consumer safety, the health and safety of the retail staff are also a major concern for retailers. Social distancing norms have reduced customer facetime and made it difficult for retail enterprises to deliver personalised experiences to its prospects.
Supply Chain Disruption
The onset of the pandemic saw panic buying, closing of retail stores, and huge online demand. But country-wide lockdowns and a brake on the free movement of vehicles compounded to break the entire supply chain across all industries. From component suppliers to manufacturing sites and in the last mile to the customer, the supply chain was disrupted at every stage. Retailers lack a proficient sourcing strategy that impacts their inventory and deliverables. The other challenge is recordkeeping, where a central repository is to be maintained. Retailers face the challenge of recalibrating their inventories and revising their purchasing plans favouring high demand products, and routing them to locations with brisk sales. Retailers also must beat the shipping and delivery timings of e-commerce giants.
Greater demand for multi-channel buying experiences
With more comprehensive e-commerce solutions and reduced shipping time, customers are utilizing e-shopping more than ever. Customers are switching continuously between online and offline purchasing and remain open to those retailers that provide the best of both worlds.
Spike in online sales post-covid means that customers are now looking for a more seamless experience in terms of multi-channel purchasing options and omnichannel payment alternatives. The major challenge here is for the brands to interact with customers wherever and however they wish. For a successful multi-channel shopping experience, b2b retailers must offer a consistent product offering, pricing, and customer experience across all the channels. However, traditionally trained promoters are facing tremendous pressure in delivering smooth customer experiences in these changing times. Inability to understand data and customize services based on consumer needs is another factor in why retailers today are challenged.
Read more about reimagining and enhancing customer experience virtually.
Ineffective retail executions
Among the many challenges retailers face today, ineffective and unorganized retail activations are the biggest concern. Disruptions in the supply chain coupled with unorganized inventory management create a problem of either deadstock or no stock. This again creates an impression of unorganized retail that does not cater to customer needs leading to unpleasant buying experiences.
There are other retail execution challenges such as inconsistent pricing across channels, dirty fixtures and display elements, excessive inventory, and system issues to name a few. One of the major reasons for ineffectiveness is unscientific planning and execution of retail activations. Promoters understand their product but lack an understanding of their target customers and end up designing a retail planogram prioritizing the product and not their customer preferences.
Siloed marketing infrastructure
Modern marketing makes it necessary for retailers to engage directly with their customers across different channels. Digital expansion is one of the key areas of concern for retailers. With so many channels at disposal, sales and marketing team are often at loggerheads overwhelming the customers with repeat, conflicting, or irrelevant messaging. When marketing and sales team work in silos, they end up building different stories for customer engagement. Enabling coherence across all the channels requires adopting new and emerging technologies to automate manual tasks and leverage data to improve retail practices. Lack of sales training among the retail promoters also hurts the customer experience in the long run.
Lack of virtual retail solutions
Even with a considerable spike in e-commerce trade, customers still rely on a personalized shopping experience at traditional retail stores. However, due to social distancing norms, customers have not been visiting the retail outlets and are looking for personalized services from the safety of their homes. Retailers who are already bogged down by the reduced sales are not looking to invest in digital platforms creating a vicious cycle of revenue drop. In the absence of new-age technologies and data-oriented practices, retailers are wrapped up in operational inefficiencies that keep their resources occupied in unyielding business areas.
Also, in the absence of virtual retail solutions, customers remain unsatisfied and look for other buying options. Apart from the virtual solutions, retailers also have the challenge of innovating new selling models and virtual sales assistant to adapt quickly to the changing times. Find out how virtual retail audit can augment store operations and optimize customer experiences.
When it comes to business buyers, they depend on large sales cycle and order complex products. This generates a huge amount of inconsistent and unstructured data. In fact, every single customer interaction generates information. And if you throw digital touchpoints into the mix, the pile of valuable information becomes ginormous. The major challenge here for the retailers is to convert and process the data into actionable insights. Lack of data automation solutions makes it difficult for the retailer to analyse it. Furthermore, retailers lack firmographic, demographic, and technographic data to better augment their operations. Lack of retail analytics is another drawback in current market dynamics that hinders the growth of retailers.
Outdated and rigid visual merchandising
In an increasingly competitive marketplace, retailers need to keep adapting and remain proactive to attract and engage customers. Customers respond better to relevant merchandising that engages their purchase motives. With the digital explosion, the focus has turned away from instore and traditional merchandising options, which is a big drawback in engaging customers at the store.
Retailers often have outdated fixtures, demo displays, and irrelevant visual elements that lead to inconsistent branding, directly impacting the customer experience. Retailers invest in flashy and complex branding that is not only expensive but also difficult to install and execute by the store promoters. Another critical drawback with routine visual merchandising is that it does not take into account the customer data. Retailers might look at data from the perspective of inventory but never use it in designing visual branding elements that cater directly to customer preferences and price points.
Unstructured retail audits and brand compliance
Retail audit and store compliance are essential to identify operational issues and provide targeted fixes for those issues. Retailers often conduct manual audits and self-assessments to reduce costs. Manual audits are time-consuming and woefully inefficient. Self-assessment proves detrimental to a retail store as it does not reflect the true picture of the operations and prevents a professional analysis of the issues. A half-baked and unstructured retail audit can end up with false reporting that will hamper growth and ROI. Whether it is operations audit, merchandising audit, customer service audit, or hygiene audit, retailers today lag in all these respects. Most retailers lack intelligent retail solution that enable a 360-degree view of the store and enables compliance management.
No going back
New market realities have dug a sea of challenges for retailers to maintain visibility and competitiveness in the market. Reduced footfalls, multi-channel buying experiences, ineffective retail activations, untrained promoters, and the absence of virtual solutions are some of the most pressing issues that retailers today are faced with. Retailers are struggling to create a safe shopping space and address the fickle nature of modern customers. Most of the current challenges were forced upon the retailers by the covid-19 pandemic a year ago, but there is no going back. It is upon the retailers to consider all the scenarios and plan their operations accordingly.
When challenges present themselves, it is in our best interests to adapt and surge ahead. Keep reading this space to find out the breakthrough solutions to counteract these challenges in our next blog- Breakthrough Retail Solutions for Retailers to Cope with New Business Realities.
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