With the continuing shift in customer preferences towards online shopping, retailers are currently in a tough spot. This is why PwC’s 2017 Total Retail report is focused on the kinds of investments retailers will need in order to thrive in tomorrow’s marketplace. This is the tenth consecutive year that PwC has published a study of online shoppers, and our sixth truly global study.
In PwC’s 2017 Total Retail survey, our most comprehensive to date, we asked nearly 25,000 online shoppers in 29 territories about their shopping behavior and expectations. Their answers can help retailers solve the puzzle of where they should invest not only to survive, but thrive in the years ahead.
Managing return on investment is critical to a healthy business. Many factors go into investment decisions, ranging from what merchandise to stock for what season to how many stores to open in a given geographic location. Retailers have an opportunity to take a close look at their investments in customer experience, staff, technology, and real estate.
The stakes have never been higher for individual retailers. First, competition has never been fiercer. To compete in retail today, new entrants do not require stores or warehouses, and can be based around the corner— or on the other side of the planet. Pure-play online players are popping up in every product category.
The second factor forcing retailers to make smarter investments is what’s has been referred to as the global “New Normal.” With lackluster GDP growth around the world, sluggish consumer demand will continue to put significant pressure on retailers to differentiate their offerings.
Third, retail in general is still struggling around the world, particularly in the grocery, household items, and clothing and footwear segments.
Ade Elimin, PwC Indonesia Retail & Consumer Leader, says
“This year consumers are in the power position and they are enjoying the choice and cost affordability that come with a global marketplace. The power has shifted from those who make and sell products to the customers who purchase those products. Retailers are enforced to offer continued value and convenience for consumers.”
In this report, we have set out ten different types of investments retailers can make to invest in their futures:
1. Invest in the mobile site, not the mobile app. According to this year’s survey, while in-store shopping is still most popular with weekly and daily shoppers, the frequency of mobile shopping has now overtaken tablet shopping by some measurements and is within striking distance of shopping via the PC.
2. Invest in talent. Today, relevance is based on digital and technology savvy. Store associates, corporate staff and the C-suite need to mirror the consumer—if a retailer is not versed in social and digital, it is not relevant or attractive to young, savvy customers or prospective employees.
3. Invest in big data insights, not just data collection. In a recent PwC/SAP retailer study, retailers say that creating value out of reams of consumer data is their biggest challenge. In fact, huge gaps exist today in the data retailers possess and their ability to glean insights from it. From customer store visits, to store and warehouse inventory, to how long shoppers spend on retailer websites, retailers are held back by the chasm separating the data collected and what is done with that data.
4. Invest in an Amazon.com strategy. Amazon has set many new standards in retail through its creativity and seemingly never-ending streak of disruptive innovations to make shopping—and life— easier, more convenient, and more fun.
5. Invest in the “story”—not traditional advertising. More and more of the global population is not attracted to traditional advertising—they want authentic information they can find at their fingertips: what are their friends doing, which brands are hot on social media, what is trending with their favorite influencers.
6. Invest in more secure platforms. Our survey confirms that about two-thirds of shoppers are concerned with having their personal information hacked while using their mobile phone. In addition, more than half of those surveyed only use companies/websites and payment providers that they believe are legitimate and trustworthy.
7. Invest in keeping already loyal customers. Since customers seem apt to be brand loyal, reinforcing this loyalty by investing in uniquely appealing brand features—such as customized offers and special access to deals—could pay big dividends.
8. Invest in showrooms, not the entire store network. While the store is not going away anytime soon, its purpose is evolving. There is compelling evidence that people want the physical experience of trying things, but are not that happy with aspects of the in-store customer experience.
9. Invest in the authenticity of branded goods. Authenticity of branded goods is a huge issue for retailers, particularly for products made and sold in developing markets or whose supply chains wind through developing markets.
10. Invest in health care offerings. For consumers plagued by long wait times and high costs, retailers have emerged as a much needed salve to fill some of the gaps between consumer expectations and the current medical infrastructure.
The ten areas of investment described in this report cover a range of areas, including digital infrastructure, offline retail network, communication strategies, analytics capabilities, customer loyalty, and talent. The variety reflects the increased business complexity that retailers are facing. Since business models differ and budgets are not unlimited, the priority and urgency of the proposed investments will vary by company.
You may read the complete survey here
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