Five for Fifteen
As 2014 draws to a close and peak trading is upon us, a look forward to 2015 and a personal take on some of the retail trends we should look out for.
1. The customer relationship
Retailers will try but fail to halt the power shift towards the consumer. Mobile, social, smartphones apps all place more power and influence in the hands of the consumer and this is only set to continue in 2015. Retailers may try to influence and control this but the resistance to this fundamental shift will be fruitless; much like trying to prevent and discourage showrooming. Those who do so will be deemed old school and no longer relevant. Those who actively encourage consumer participation in the brand – typically through product development, merchandising, promotion etc – will outperform the competition.
2. The role of the retail CIO
The role of the CIO will continue to be eroded by the increasing power & influence of the CMO and CDO. The retail CIO is at a pivotal point which, given the right strategy could take them to the centre of the retail organisation however there is growing evidence that they are slowly being marginalised by the digital transformation their colleagues, most notably the CMO and CDO, are driving. Should this continue, the role of the CIO will be no more than custodian of the organisation’s data. They will largely be charged with the ‘run’ function and for operationally keeping the lights on but (digital) innovation will be driven from elsewhere within the organisation.
3. Evolving business models
Putting the customer at the centre will take on a new dimension meaning online & offline will converge into one. A customer centric approach will affect all parts of the retail organisation in ways never before conceived of. As availability becomes an ever more critical part of the operation, so the supply chain will need to become far more responsive and agile. This will put huge strains on retail operations.
4. Customer engagement models
Customer & brand engagement roles will assume greater importance as the customer is put at the centre of the business. The traditional structure and culture of retail organisations where command and control driven by sales figures is viewed as paramount will be eroded. This will be replaced by a much more inclusive, customer driven model where the customer interaction and engagement is at the heart of and drives the rest of the retail business. Retailers will slowly begin to shift from a sales driven culture to one where sales are seen as the desired outcome of great customer engagement and experience.
5. Immersive retail
Omni-channel retailing will become a less used term and will come to represent the old world as the consumer relentlessly drives a complete immersive brand experience. This will be particularly evident in the fashion sector where brand allegiance and loyalty (such that it is now) are strongest. What once were seen to be different but related channels to the consumer (omni-channel) will no longer be viewed in this way but as one seamless interaction where the consumer will expect the retailer to know everything about their behaviour and to be able to link all the various touchpoints together to create a holistic view. Personalisation will be replaced by individualisation, driven by the demands and expectations of the consumer.
How these trends emerge and develop will in itself be interesting to observe but one thing is certain: the pace of change within retail will continue to accelerate.
Andrew Busby is Retail Business Head at Zensar Technologies