In the growing competitive market the success of retailers and suppliers is completely driven by the collaborative and proactive action that they take in the competitive market. Every sqft cost for the retailer should be optimized and sharing actionable information with all the stakeholders on the go is going to be the key differentiator. The 21st century shopper has at his disposal an array of technology driven choices. The theory of making a mass product and succeeding was easier in the past. In the new norm customized product offerings and services will be the key driver for success. The primary goal for the retailers and CPG manufacturers will be to improve shopper engagement. Retailer supplier collaboration would play a key role in driving that success.
New formulation, packaging and offerings have to be driven by deep studies undertaken in the retail space and understanding the shopper at a granular level. While past product launch success always provides a great indicator for future action, retailers need to be aware of the changing landscape. The retailer is always closest to the shopper and understanding their specific requirements and real-time communication with the buyer. At a retailer level deriving the scorecard on all the key supply chain parameters (fill rate, margin, ROV, sales growth, sales/sqft) across suppliers becomes very important.
The shopper is not always looking for dollar discounts, when they are consider the retailer-supplier impact on their neighbourhood and community. Some smart engagements could be conducting health camps to detecting cardiac issues, blood donation camps, dietary plans and football/baseball games. Engagement tends to be more effective when demographic targeting is also taken into account. Healthy and sustainable offerings strike chords with shoppers when they choose a retailer/supplier. The success of private labels wasn’t a fluke happening. Retailers really understood the shopper need in terms of benefits, product features, packaging and the overall value that they sought. The retailer needs to reflect back and see if there is an opportunity to move some of the categories into e-commerce and have it shipped directly from the supplier’s warehouse. This will be a win-win situation for all the stakeholders (shopper, retailer and supplier). The shopper gets a benefit as the product is directly sourced from the supplier’s warehouse. Retailer can utilize the additional space for some of the fast moving items while the supplier also receives the payment immediately due to quicker sales cycles.
The journey from knowing and buying a product is very complex. They are likely to first check out online reviews, poll their friends through social media, compare features among similar products, check prices, and search for coupons. With the advent of smart phones and other networked devices, this research is taking place at home, in the supermarket, in the fitting room, in the aisles, and even at the cash register. Technological advances (social media, apps, smart phone) have created an unprecedented impact on shopper behaviour. Retailers can really package their offerings at a neighbourhood store level rather than at a national or state level. Social media mining will provide lots of insights around the demographic requirement and help the retailer segment and position their products appropriately.
Customers are really glued to their smart devices. The changing social norm is also felt in the Banking and Financial institutes. Recently some of the banking firms realized that getting the customers to visit their premises is important. To drive that they developed various customized offerings and surprises for the walk-in customer. Similarly they also engaged the relationship manager to maintain that personalized touch. The whole banking product and services were oriented to make them feel that “they care for them in all situations”.
What are some of the things that the retailer should care for to keep abreast of these changing social norms?
- Establish deep rooted connections with the neighbourhood: Understand the insurance, college and infrastructure needs of the locality and drive relevant engagements
- Involve in their social campaigns: Cancer detection Camps, Health Awareness Camps, Sport promotions
- Customize offerings based on demographic needs
- Strengthen the e-commerce platform
- Develop strong supply chains which will ensure that shopper get the right product at the right place at the right time