In today’s digital age, retailers are struggling keeping their heads above the water. Growing competition from e-commerce, large international groups and changing consumer preferences means that those retailers are facing one of their largest change endeavours in history. Consultants play a key role in helping them navigate change and prepare for the future of retail – Phil Bacon from Xpedition shares four ways how consultants are doing so.
The retail footprint is decreasing, and Topshop, Jack Wills and Karen Millen are the latest in a long line of big fashion names to fall victim to the high street curse. With the e-commerce boom showing no signs of slowing down, customers are becoming more conscious of what they are buying, and with over 23,000 stores predicted to close this year alone, fashion houses need to adopt a new approach to avoid becoming the ghost of 2019’s past.
We all know that retailers need to adapt to digital transformation, but it’s tough to know how to tailor new technology to your customers. How much do you budget for tech spend, and what tech do you invest in, when there’s so much choice out there? As a result, retailers are looking to third-party experts to advise them through outsider, unbiased eyes. Consultants and agencies have trained expertise and experience in helping retailers to succeed in difficult times.
But just how can consultants help and advise retailers to boost their Return on Investment (ROI) and ultimately achieve in the digital world?
Unleash hidden opportunities
You might not think it, but the data your store holds from in-store transactional purchases tells a story: a story that enables you to see regular buying and behavioural patterns, and uncover the unique characteristics of your customers. But it’s hard to know where to start, how to gather all the pieces together and best store the data. Right now, a retailer might be holding all of its records in a spreadsheet format. This not only makes it hard to extract useful analytics, but it’s also more vulnerable to errors from manual data entry.
This is where consultants and data scientists are stepping in – they have the expertise to analyse your current data set and change the way you’re using it to achieve optimum efficiency. They will interrogate your database and help you with a stronger system which makes historical and forecasting analysis easy.
As one popular consulting firm says – the best service is personal and one-to-one. Data can open up a wealth of information needed to disrupt your business. You have the ability to view a customer’s history, orders and previous questions at the tap of a screen. It gives you the chance to have tailored conversations with them, so you’re not driving blind. You know exactly what they wanted or asked for the last time they spoke to you, and nothing falls through the cracks.
Improved lean inventory
An inventory isn’t easy to manage – but it’s key for a deeper understanding of customer demand. Of course, it varies – factors like competition, seasonal factors, trends and environmental impact all affect it. It’s often hard to predict when that will happen, and what the effect will be across the business, but this is where technology and retail consultants are coming together. Currently, only 33% of retailers optimise their inventory through advanced analytics, showing a clear disconnect between technological capabilities advancing, and the data being utilised.
Consultants will interrogate your inventory, and advise you on how to make better decisions. They will clean it to make it more accessible. And with Artificial Intelligence breakthroughs, they can help you to implement a new planning system which can reassess models and re-evaluate the data – all without a human’s involvement.
Enterprise Resource Planning (ERP) systems can give 20/20 visibility into customer-product matches, demand variations, and times when you have had too much or too little stock in the past. They can hold the right amount of stock that you need to maximise your business based on seasonal trends and historic data, and give suggestions into how you can reduce the risk in loss of stock capital.
“Retailers that champion their operations with a consistent, omnichannel approach combined with a data-driven strategy stand to make huge gains.”
– Phil Bacon, Xpedition
It’s easy to think it’s the too-pricey stores that are the biggest high street victims, but according to analysis by McKinsey & Company, 80-90% of poorly chosen prices are too low. It’s not about cheap costing – it’s about intelligent costing. Data science consultants are pushing the power of advanced analytics in retail to deploy a price elasticity of demand strategy. This refers to the extent that the demand for a product will change in response to a change in its price.
If it’s ‘elastic’, it means that a change in the price is likely to result in a bigger increase in demand, but if it’s ‘inelastic’, it’s unlikely to. By looking at analytics, they can discount the ‘elastic’ products at the appropriate times, and adjust depending on what is affected by price and what isn’t. By doing this, retailers avoid pricing too low for products which people are happy to pay more for while offering cheaper prices for things which will lead to a spike in demand.
Deliver ROI on tech spend
How do you know what the right system is for your business? Expert consultants and service providers that know your market and have a realistic understanding of solutions will help you to disrupt your market and deliver on what current and future customers demand.
Retail consulting work has seen a notable growth of 65% recently – and for good reason. You can’t just transform by implementing technology after technology – it’s key to understand the benefits that your investment will bring your store. A good service partner can help you to innovate and assess what you stand to gain commercially, offer a deeper insight into what customers want, and even advise on how to make a business case to the relevant people with confidence.
Customers want more from retail business now, and they will be quick to vote with their feet if your store doesn’t cater to their demands and interests. Smart ERP solutions can enable you to not only adapt fast and react immediately to their demands, but to identify and analyse your high-value customers, find out their preferences and create a targeted marketing strategy. Businesses that champion their operations with a consistent, omnichannel approach stand to make huge gains.
Many high street brands have been collecting data for years, but business management data platforms like ItSuitsFashion enables you to find the gold that lies within it, and offer a personalised service that is better than online.