Retail disruptors - debunking the myths
By Deena M Amato-McCoy - Feb 20th 2018, 15:32
The success of retail disruptors lies in their delivering a top-notch customer experience as opposed to making over-investments in hot technologies.
That’s according to a new report from JDA and Retail Systems Research, which debunks the common tendency to describe retail disruptors as e-commerce pure-plays that burn through profits quickly and over-invest in “hot” technology. Instead, true retail disruptors have stores found all over the world, invest strategically in technology, and have the highest-quality products and services (53%).
The “2018 Retail Disruptors Survey” also found that disruptors are also much faster and more responsive than traditional retailers (5%), and they have fundamentally changed the customer experience (42%).
The aggressive strategies of retail disruptors also translate into the bottom line: Sixty-six percent of disruptors said they are profitable now, while 28% said they will be in the next 18 months. Meanwhile, 49% of disruptors are growing at an annualised rate higher than 11% — only 30% of non-disruptors are growing at that rate according to data.
“The results of this survey are clear: Disruptors are more willing to sacrifice a faster growth trajectory to achieve the customer experience shoppers expect, with a mix of human- and data-driven insights for the perfect blending of art and science,” said JoAnn Martin, VP, retail industry strategy, JDA. “Retail disruptors realise that technology is a strategic enabler and not just a cost to be managed. This will be absolutely critical to success in an evolving and turbulent time for retailers.”
Disruptors may be more successful at using technology to improve customer experience than non-disruptors are, as 25% of disruptors offer seamless shopping experiences across all channels, while only 13% of non-disruptors do.
They also value human insight as much as data-driven insights in key areas, while non-disruptors are less likely to temper data with human insights for key operational areas. This includes store operations (40% of disruptors vs. 29% of non-disruptors); sourcing and procurement (34% vs. 29%), and merchandising (34% vs. 16%).
Retail disruptors prioritise investments in customer-focused digital capabilities. Twenty-five percent of survey respondents had implemented digital technologies, compared to 19% of non-disruptors — and 35% of non-disruptors have no plans to implement digital technologies, as opposed to only 25% of disruptors.
When it comes to customer-focused digital capabilities, 25% of disruptors have implemented digital technologies, compared to 19% of non-disruptors. Thirty-five percent of non-disruptors have no plans to implement digital technologies, as opposed to only 25% of disruptors. Digital technologies that improve that experience are social media for customer engagement (60% vs. 55%); mobile devices for in-store staff (51% vs. 38%), and integration of IoT devices and data (51% vs. 45%).
Disruptors also leverage the value of their physical retail store network, but the key to in-store success lies in creating attractive experiences. For example, 71% of disruptors said cross-channel fulfillment will drive foot traffic into stores – a clear sign that fulfillment options such as buy online, pick-up in store (BOPIS) and buy online return to store (BORIS) will continue to grow in popularity. Interactive technology (62%) and loyalty programs (60%) also ranked highly in terms of getting shoppers into stores, the study said.© 2018 Chain Store Age.
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