Retailers must discover new growth strategies, with a sharp focus on the comprehensive use of customer data and an integrated digital strategy to enhance the customer experience both online and in-store or they will fail to attain their growth targets, according to the inaugural retail index and executive survey recently released by SAP and Oxford Economics.
The research points to the need for a three-pronged retail growth strategy:
1. Focus on an integrated digital strategy encompassing both online and in-store sales,
2. Improve the in-store experience, and
3. Create a comprehensive view of each customer using a range of customer data.
Right now, retailers are simply not adapting their internal and external business strategies fast enough to meet the evolving needs of their customers, according to the study.
“To sustain growth and satisfy shoppers, retailers must improve the in-store experience, expand online and mobile interactions and develop the operational strategies needed to integrate these elements into a seamless experience for customers,” said Matt Laukaitis, senior vice president and general manager, Retail North America, SAP Industries. “Retailers that fail to create this experience may find themselves struggling for loyalty.”
A summary of the results, ‘Reigniting Growth: Three Imperatives for Retail’s Future‘, warns that traditional in-store retail growth strategies are simply not enough anymore.
The report notes that while 97 per cent of survey respondents cited in-store experience as one of their main areas of focus over the next three years, only 37 per cent of respondents are currently using internal and external data, including social media, to achieve a 360-degree view of their customers.
“Retailers are at an inflection point,” said Edward Cone, deputy director of thought leadership, Oxford Economics. “Established methods of driving growth need to give way to newer approaches. But there are great opportunities for companies that meet their customers wherever they may be.”
The retail index, which represents market intelligence data and survey insights collected from 120 senior retail executives around the world, is designed to identify the current challenges and strategic goals of retailers in order to determine best practices and retail growth strategies at the global level.
The index is based on the averages of six KPIs: total sales, same-store sales (indicators of volume growth), operating margin, turnover (indicators of profitability), online share (an indicator of new technology adoption), and employees per square foot (an indicator of customer experience for hardlines, softlines, and food and drug).