Sync-Up! With Nihat
Nihat Arkan, CEO, 1WorldSync
The retail industry is in a transition. Some of those changes have been unfolding over a long period of time, but more rapid changes have propelled the industry into a near revolution. Retail as a whole was always complex and diverse, but with today’s technological advancements and globalization, the industry landscape has dramatically changed. Consumer behaviors, shopping tastes and expectations are evolving and have become key drivers in retail’s transformation to a more consumer-centric industry. International retailers (and consumer product manufacturers) have relied on developing markets and technology to fuel growth and I believe that a change in retail strategy is needed.
According to a recent study released by PwC, “The 2020 retail landscape may represent one of the more complex environments retailers and their trading partners have ever faced. Retail organizations that do not change where and how they sell and operate will fail to adapt and succeed in this challenging landscape.”
Retailers are at a critical fork in the road. A strategic mindset is needed. Change, expand or become obsolete. Globalization, cross-channel commerce, and transparency of product information must find an intersection point for retail businesses to thrive current day.
The Global Landscape
Amid ongoing economic turbulence, developing markets continue to offer retailers prime opportunities for growth. China, for example, has become the world’s undisputed leader in e-commerce, with 2015 online sales of $672 billion after 42 percent year-over-year growth. The rapid rise of e-commerce has turned China into a leading innovator in mobile payments (Global Retail Development Index, 2016).
I had the pleasure of attending a customer event in Berlin recently and had an opportunity to speak with customers about their challenges and their agendas. During one particular conversation, a major global retailer in the U.K. shared that mobile commerce is now surpassing desktop (Criterio Research, September 2016). The result is that they can no longer ignore mobile (whether apps or the mobile web) nor mobile targeting strategies if they wish to engage shoppers.
Retailers worldwide are challenged to rethink everything from store formats and payment methods, to digital impact on their operations. In order to survive and thrive in this evolving environment, retailers and suppliers alike need to acknowledge that changing landscape, identify those most critical to their business and chart a course for adaptation and change.
Here’s a great example of just that. More and more customers and industry insiders are talking about Artificial Intelligence (AI) and how they can leverage this in relation to product content. Specifically, people are talking about how to reduce friction associated with mass data management by implementing AI assisted content entry, validation and data quality. We’ve taken steps in this arena by engaging a leading machine learning professor Dr. Sascha Lange (PSIORI GmbH) to prove out predictive standards allocation. We were pleased to discover that we had over a 95% accuracy rate for application of standardized product classification structures to product information at the point of entry to our catalogs.
With the rise of SO/LO/MO (social/local/mobile) commerce our retail customers are demanding that tens of millions of products be available to present to consumers, with thousands of attributes per item. AI will be instrumental in helping to source, classify, structure and analyze content for commerce.
The Changing Global Omni-Shopper:
Today’s “omni-shopper” shops when they want, how they want and where they want. Consumers proactively search for savings, are generally brand loyal and shop across channels (McKinsey, March 2016). They have more places and ways to shop and are exposed to an infinite number of shopping choices online.
As such, retailers are able to engage with shoppers via a variety of touch points, from a traditional shop around the corner to the 24/7 accessibility and convenience of their laptops, tablets and smartphones. According to a report from Zebra (Zebra, 2015), “Today’s consumer seeks out stores updated to reflect the new shopping paradigm, equipped with digital tools like mobile checkout, to flexible delivery options that reflect their omni-channel purchasing patterns, such as buy online, pick up in-store.”
The notion of a global omni shopper is extremely powerful since this essentially means that the consumer, not the channel, is defining retail. These global shoppers, no matter if they are in Los Angeles, Hong Kong or Dubai (and wish to shop within and between those countries), have infinitely more choices in today’s environment. For the brand and retailer, that means a challenge or an opportunity.
Transparency and Knowledge-Centric Shopping
As consumers shop when/how/where they want, they are also more demanding of ‘what’ they want. Today’s omni-shopper has high expectations for a rich and consistent experience with a retailer’s products and brand, across multiple commerce channels and borders. Therefore, the way a retailer informs, educates and engages customers and consumers using product information must be comprehensive, trustworthy and current. One cannot ignore the value of that product information. Of course, perhaps I’m biased in this regard. Yet, I should mention that one of the largest retailers in the world told me that “digital product information is as important as the product itself.”
In that light, it’s clear that the quality and completeness of product presentation in online retail has a quantifiable and direct impact on product sales. My belief is that the on-line retailers that offer compelling, engaging, and complete content to shoppers will be rewarded by repeat purchases, lower levels of returns, and long-term loyalty.
The key to success is identifying and maximizing the opportunities where they exist. Just as consumers are more connected, retailers will need to follow suit, engaging with consumers wherever they are and at each stage of the promotion of a product or service: the before, during and after have never been more important.
As an organization that operates between businesses, 1WorldSync has privileged access to over 23,000 brands and hundreds of analog, digital and blended commerce players. That gives us an ideal insider advantage – we can observe and advise our customers’ journey towards a blended commerce.
Finally, let me conclude with a question. Is your business already organized in a way that you can operate seamlessly between analog and digital channels to market? If the answer is no, that’s OK. Only a handful of companies can answer ‘yes’ to this question. However, I can tell you that hundreds of companies are already on that path.