Solving the need for a customer-first retail strategy

In 2022, 22,109 businesses failed, with insolvencies 57% higher than in 2021. From recent financial increases and new customer demands, the UK retail landscape is under immense pressure. According to ONS statistics, 15% of these insolvencies were from the wholesale and retail trade category. Gavin Masters, Principal Digital Strategy & Transformation Consultant, Digital Commerce, Columbus UK draws on insights from the Internet Retailing RetailX UKTop500 Report, to highlight how retailers can exploit the cloud to create high-quality digital and hybrid shopping experiences to overcome market challenges.

To succeed at a time when competition is tougher than ever, retailers need to go the extra mile – prioritising fast deliveries, seamless online buying purchase journeys, and providing a 360-degree customer view will be crucial. But all of this requires a flexible business model that utilises new technologies, data-led customer insights and digital consultants, to offer digital and hybrid shopping experiences.

A unified commerce strategy is the ingredient for success
The backdrop of inflation and cost-of-living increases make it important for retailers to serve shoppers in any and every way in which they want to buy. Customers may be returning to in-person shopping but recent ONS statistics show that they are still buying online more frequently than they did during the pandemic (seasonally adjusted internet sales accounted for 26.6% of all official retail sales in May 2022, compared with 19.7% in February 2020) – and retailers must adapt to this demand. A flexible cross-channel approach can help retail businesses to engage consumers whenever and wherever they choose to shop – and this is where unified commerce comes in.

Retailers are finding considerable success by moving beyond the concept of omnichannel to a more integrated approach. Here, unified commerce can offer customers a seamless and relevant purchase journey, driven by consolidated real-time customer data that’s actionable across channels.

The result is that every part of the retail process, whether customer-facing or back-office related, has the customer at heart.

Add value to the customer journey and the road to profitability will shorten
As cost-of-living rises increase financial pressures, customers are prioritising value for money over brand loyalty. The RetailX report highlights that the most successful retail businesses offer a customer value chain that makes it easy for shoppers to buy a product, have it delivered, and then return it, if necessary.

The ability to offer additional value to products such as free shipping, easy returns, and extensive customer support enables retail organisations to provide a more enhanced customer experience and go beyond transactional customer relationships. This is where an omnichannel experience that works for customers and being able to adapt to their evolving shopping habits is critical.

First, removing friction from the checkout has long been a goal for retailers aiming to cut down on the number of people abandoning purchases. Retailers do this by offering guest and third-party checkout options. Requiring shoppers to register to checkout does have its own benefits, as retailers can start to build long-term relationships when they acquire more customer information – but there is a balance to strike. According to the RetailX report, more than a quarter of retailers and brands (28%) now enable shoppers to use PayPal to checkout. This ensures a quick checkout for customers and provides necessary customer data for retailers to personalise future service offerings.

The next step involves the removal of sales barriers with a combination of delivery options that are either always free or free above a minimum order value – but don’t forget about those easy and convenient returns. As most shoppers don’t return their online orders, retailers can boost sales by making it easier to send something back.

The digital customer wants tailored experiences – AI can provide just that
As customers become more thoughtful about their buying decisions, the right online tools will be crucial to excellent customer experiences. Tailored search results ensure customers feel that a retailer can meet their need to find relevant items quickly. Nine out of ten retailers and brands surveyed in the RetailX report now enable shoppers to filter searches by product type but there is still more to be done here to improve search filters.

AI technologies will take on-site search capability one step further and enable retailers to create effortless customer-centric product discovery experiences that constantly refresh with trends and shopper behaviour. The more information retailers and brands gather, the more personalised the customer experience will be, leading to higher conversions.

Shoppers are also more likely to buy when they see what other customers thought of an item, which is why a growing number of retailers and brands are now sharing product reviews. According to the RetailX report, this is something more retailers and brands are doing this year (58%) than last year (55%).

As shoppers return in-store, retail businesses are reinforcing omnichannel systems that fully bring digital into their stores – and the store experience onto their websites.

Cover all your product bases with timely insights from a digital consultant
Researchers for the RetailX report found that the quality of online product information remains unchanged from last year (median score of 3.0 out of 4) – that’s plenty of missed opportunities to adapt to consumer shopping habits. Product information, from technical information to details about sizes and materials, can be the make or break of a sale, so retailers have got to get it right. If this information is readily available, retailers can make more from every customer contact. This is where the value of working with a digital business consultancy cannot be understated to successfully achieve transformation in the retail industry. The right consultancy business will provide that second pair of eyes over critical insights across the entire business, helping to bring together the digital and technology skills that deliver value in the cloud.

The skills gap can be difficult to manage but retailers need to strike a balance
For the retail sector, the UK’s largest private sector employer, there’s a deadlock. Digital skills are now needed for 79% of retail jobs, but 62% of leaders say they can’t find people with the right experience (https://internetretailing.net/reports/annual-reports/rxuk-top500-report-2023/). Today’s retailers often struggle trying to link multiple channels without the support of in-house technology experts with the right IT skillset. By bringing in real-time communication tools, and the expertise to optimise their use, teams can improve collaboration with cloud systems, regardless of their location – and this is where consultants demonstrate their value.

A digital consultancy business can help retailers align industry best practices with company goals to drive transformation initiatives, helping retailers discover how digital technology can unlock opportunities to create new business value.

Digital consultancy businesses will help find ways to release value early and incrementally and ensure successful value management. Plus, at a time of economic uncertainty, consultancy support will be a flexible resource when retailers need to maintain agility in their cost base and align value creation with cost.

To build resilience and thrive in difficult conditions, embrace innovation
Between the cost-of-living index and changing consumer behaviours, 2023 is creating a turbulent market for UK retailers to navigate. But it’s not all doom and gloom. Retailers that seek to provide customers with simple online buying journeys, easy returns policies, and unified commerce experiences can assert their dominance in a crowded market and thrive during difficult conditions. Only by working with digital consultants and harnessing powerful AI tools to overhaul their digital offerings, can e-commerce businesses truly level-up their retail strategy.

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Gavin Masters, Principal Digital Strategy & Transformation Consultant, Digital Commerce at Columbus UK Gavin works with brands to identify opportunities to evolve, scale, and improve their digital operations through SaaS and PaaS solutions as a pre-sales engineer and solutions consultant. A top performing, results-driven digital leader with comprehensive experience in delivering & leading large online operations, digital brands & consultancy services within a variety of industries. Gavin has proven impact on online revenue, brand development & commercial growth. Enthusiastic, passionate, and obsessed with online, Gavin has spent his entire career in digital, working with leading retailers such as Hallmark Cards, Marks & Spencer, Play.com (Rakuten), The Co-Op, and Debenhams.

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