Roland Berger’s consultants have highlighted five important trends for the future: digital competitors can become partners; low-cost chains are growing; the customer experience is becoming more important; big data’s potential is underestimated and robots are taking over stores.
Roland Berger’s retail and FMCG consultants help both retailers and manufacturers to perfect their operational and strategic approach: they assist in mergers, acquisitions, management buyouts or restructuring plans. RetailDetail met up with partners and retail experts François Castelein and Grégoire Tondreau and marketing manager Sébastien Procureur, who used their vast experience to point the most important evolutions in retail.
1. Digital competitiveness
“No matter where you are, you run into Amazon and Bol.com…” Major eCommerce companies’ surge puts an increased pressure on other retailers everywhere, because they can offer a quality service, low prices and an extensive product range. There also seems to be no end to their rise in sight: “They have a huge impact on classic retailers’ digital and physical strategies and they force the competition to evolve even faster.”
There are also upsides to this evolution: online competitors can also become important and valuable partners. They open their own marketplaces for third parties that can now access an enormous, highly interested audience. This in itself creates new opportunities for both brands and retailers.
2. Value retail becomes more popular
Cheap store chains like Action, Primark and Flying Tiger have grown a lot, which is quite remarkable. “It seems like a tidal wave, because these three flooded the market almost simultaneously.” They do not specifically target the lowest price, but “affordability” and are extremely driven by purchase opportunities.
The competition just cannot keep up, whether it is the low pricing or the continuously-evolving product range. The larger the value retailers’ network becomes, the more FMCG they carry. They not only buy excess supplies, but also strike deals with brand manufacturers.
3. The importance of the customer experience
The customer experience is the best defense against the online surge, but not everyone is able to differentiate in this regard despite the fact that even low-cost retailers manage to do so. For instance: Flying Tiger has a unique customer experience thanks to the trail you have to follow through the store and its ever-changing product range.
“Continuously surprise the shopper, because that is definitely a template for success. Veritas does this very well, to have its workplaces meet customers to exchange inspiration and to do crafts. Consider Rituals, that offers you tea or a hand massage when you shop", the experts say.
4. Big data’s potential
Knowing your customer is of the essence and is the key to unlocking a more loyal customer. Loyalty cards generate data that allow you to measure the success of your marketing efforts, to adapt your product range and to check how effective your mails are.
“We believe a lot of Belgian retailers are wasting opportunities in this regard in a time when they are competing against foreign companies that do take full advantage of this. It could prove beneficial if several retailers joined forces, but the barrier to develop joint platforms seems to be very high…”
Ever more retailers use robots in their customer relations, both digitally (with so-called chat bots) and physically (with in-store robots). There was a positive impact in Japanese telecom stores and European retailers like Sephora and Carrefour have also taken their first robotic steps. Robots can have a positive impact on the footfall of turnover: the peculiar thing is that customers often feel more at ease around robots than they do around humans, because robots are not judgmental and for them there are no silly questions. All this significantly lowers the barrier.
Robots are also more consistent in what they do. Fast-food restaurants have noticed that people who order at a booth spend more because a machine does not feel the pressure of a lot of customers waiting in line and also never forgets to ask for dessert or coffee. Robots are also used in the supply chain, like in distribution centers. Virtual and augmented reality are also interesting opportunities, both in the back office and in stores.