Retailers are coming off a strong 2018, sparked by a strong labor market, higher disposable income and elevated consumer confidence. However, to keep the momentum going, they will need to bolster their selling and marketing strategies such as putting a greater emphasis on making a more personal connection with consumers or tapping into new technologies to deliver goods in an efficient and cost-effective manner.
According to the Deloitte’s 2019 Retail Industry Outlook, challenges lie ahead in light of looming recession and trade uncertainty. In order to adapt to economic and political uncertainties moving forward, Deloitte offers four better business guidelines for retailers.
1. Transactional loyalty vs. emotional loyalty
Retailers need to look beyond programs built around traditional loyalty and benefits such as points, dollars off, gifts and mailers. Deloitte suggests putting a greater focus on securing emotional as well as transactional connections.
Consider tailoring rewards individually in the form of content, games and experiences. For aspirational shoppers, exclusivity is key. Limited offerings such as VIP fashion show access or the ability to tap into physical and digital experiences can help carve out a niche.
2. Emerging technologies
To leverage the power of new technologies, retailers should focus on mining the data they collect and transform their operations to deliver on their brand’s promise. It’s all about personalization. Refining consumer profiles based on data from all types of sources, including social media, transactions and reviews, can help achieve this objective.
Technology can also make the shopping experience easier, evidenced by the uptick in consumers shopping on their mobile devices over the last five years, according to Deloitte. However, its is key to remember that any technology must contain relevant content, whether it’s online and offline, in order to provide useful information to shoppers.
3. Privacy by design
As government regulations continue to ramp up, retailers need to have their privacy compliance road maps in place. Building a strong compliance strategy can be the basis for marketing, merchandising, supply chain management and growth activities. At the end of the day, retailers may need to make concessions in customer experience to meet privacy requirements.
4. Supply chain as a differentiator
Making the supply chain even faster, more predictable and cheaper can be difficult to manage; however, these can result in a key growth driver. A competitive advantage, notes Deloitte, can be accomplished through wider supply chain strategies.
Consider smart packaging that includes RFID-powered product labels and computer-vision-friendly packaging design and on-demand supply chain that allows for special or regional promotions and season demand spikes. By flexing the supply chain close to the customer, retailers can speed fulfillment and remove some overcapacity and undercapacity issues.
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