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The omnichannel challenge involves the integrated supply chain

In the omnichannel scenario that is emerging, the supply chain is increasingly becoming the key for integrating the different channels and allowing a common inventory. This, according to Franck Lheureux, GVP South & CE Europe of JDA, who we met at the Word Retail Congress, is the critical factor of greatest impact for retail. Closer integration of eCommerce, order management and all the elements of the supply chain will be vital to provide better customer service, thanks to greater responsiveness and, at the same time, improved business efficiency.

The main issue for retailers is to monitor the various channels, making products arrive at the customer in a profitable manner. “Profitability is the mantra for retailers”.

Also the time factor is crucial in the organisation of the supply chain, because cycles are accelerating. “Today, time is measured in instants – says Lheureux – and is important for profitability in the management of customer demand. Since it is necessary to instantly respond to customer orders, the inventory must be available exactly where and when the customer expects the product to be delivered”.

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In this process, also stores must change: the shopping experience must be enhanced and they must become places of pleasant experience in themselves. “If you do not emotionally connect the customer with the brand, if you do not create interactivity, you risk losing brand equity and consequently consumers,” underlines Lheureux.

negozio omnichanel

The ideal ten commandments of the supermarket for consumers

IperConad di Corciano (PG)
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Massimiliano Dona

During the conference presenting the Sustainability Report of modern distribution organised by Federdistribuzione, the general secretary of the Italian National Consumer Union, Massimiliano Dona, highlighted the possible risk of the report being self-referential, albeit acknowledging the merits of the effort to measure an entire industry.

Dona, who cited the results of a study of the Consumer Union on users’ desires, went on to encourage modern distribution to do more in the eyes of the consumer. He cited the ten things that supermarket customers would like to see improved.

1) INTERACTION. Envisage more effective interaction tools with customers: not only with the traditional feedback point at the supermarket (or the call center), but also Apps and other digital channels, such as social networks;

2) INFORMATION. More information on the origin of products, also beyond the legal requirements, starting with the introduction of information on the production plant on the label;

3) CHECK-OUT COUNTER DISPLAYS. Prohibition of placing products for children at checkouts, so as not to encourage impulse purchases by the younger one’s;

4) ITINERARIES. Arrangement of products inside the store according to consumer needs (and not according to the supermarket’s visual merchandising techniques): therefore, first mineral water, to avoid crushing other products, then canned products, followed by fresh produce such as cheese, fruit and vegetables, and finally frozen foods near the checkouts, so as not to break the cold chain;

5) PLACEMENT. Commitment not to change the placement of products only to confuse consumers and force them to wander around the aisles;

6) PRICES. Indication of the cheapest product to facilitate the shopping of those looking for the lowest prices;

7) ENVIRONMENT. Commitment to environmental sustainability: from the use of recyclable materials to containers for the collection of used batteries, from the prohibition of using PVC film for cold cuts and cheese to the installation of thermometers visible to the public in freezers, as well as proper collection of WEEE;

8) TRAINING. Serious investment in store staff training, also introducing new types of customer assistants that can direct consumers to find products on the shelves and provide the information necessary for value-for-money purchases;

9) RECEPTION. Better customer reception: from the availability of signage on warranty and after-sales rights to the presence of “green” labels and products for special consumer needs, from the reduction of checkout queues (offering reserved or automated tracks), to the availability of WiFi areas or those for charging smartphones or tablets, as well as places equipped for minors or the elderly;

10) CERTIFICATION. Certification by consumer associations of the quality of information, feedback services and product safety (for example, through inspections or mystery shopping in order to achieve the issue of a trustmark).

 

Flyers and coupons, in Italy the desire for digital is growing

Flyers and coupons, the backbone of promotional communication of large-scale distribution, are about to undergo a revolution. Which mainly concerns their dematerialisation and digitalisation. But that’s not all. Because the switch to digital will allow retailers, for example, by connecting to the loyalty card and through the analysis of Big Data, to avoid “shooting at random” and offer customised promotions and discounts, tailored to the needs, tastes and habits of the individual.

While at the moment, communication via text messages remains the main channel, especially in the engagement phase, much is already being done, and much will be done during the course of this year in terms of dematerialisation. Because the benefits are numerous, and everybody is asking for it. First of all Mobile consumers, the vast majority of whom prefer to receive Mobile Coupons, increasing from 76% in 2013 to 88% in 2014. And the reasons are also changing somewhat: while still practical and convenient, there is an increase in the demand for customisation and the propensity to use them in the store, increasingly a place where real and virtual intersect and integrate, but also the social dynamics. Consumers prefer Apps that aggregate different offers (even though there is a decrease according to the Doxa/Observatory survey from 76% in 2013 to 73% in 2014) because they provide the possibility to instantly compare the proposals, but the percentage of those who prefer the App of their favourite store is increasing (from 24 to 27%) because it allows customisation and additional services.

Then on the retailer side, experimentation is already underway, at different speeds. Both proprietary Apps as well as third-party wallets, coupon aggregators, are used. The phases to be considered are reading, redemption and clearing; reading can be via QR code, typing or check-in at the till, the coupon can be virtualised on the physical loyalty card or using contactless technologies or an image scanner.

The brand industry is extremely interested. Among the benefits envisaged are acquisition of customer information, cost reduction, offer customisation and fraud reduction. In addition, there is the possibility to verify the campaign results more rapidly and possibly make corrections on the fly.

“Brands are waiting for the retailers. Which have various problems to solve – explains Marta Valsecchi, head of research at the Mobile Marketing & Service Observatory of the Politecnico di Milano – of a structural nature (the economic situation, national or local extension, size, etc.), regarding the choice of the most effective channel for distributing coupons (proprietary App or third party wallet, or a combination of the two) and with regard to reading and redemption systems, which must be enabled. Technological replacement is on the move, also driven by the need to in any case replace obsolete terminals, but it should be part of a broader strategy. The real quantum leap will come with the adoption of a CRM approach, in order to build a single view of the consumer along the entire purchasing chain. There is a lot going on, with various experiments in a number of stores: let’s see what the consumer response will be”.

The digital flyer: already read by 5 million Italians

According to a Nielsen survey, 20 million households receive supermarket flyers and 12 million read them regularly. The online flyer is now read by about 5 million people, half of which only on Mobile devices. “The numbers are starting to become significant – says Marta Valsecchi -. And Mobile is becoming a new communication medium.

Not only: users browse the flyer both outside (30%) as well as inside (17%) the store. Then there are those who aggregate flyers, very popular with users and which have also become a new means of communications in which to invest”. The flyer in the store app is very widespread (72%) although not reaching the levels of consumer electronics (100%). Also in this area, therefore, there is much to be done.

Retail: 10 trends for 2015

We are at the end of year, it is time to take stock, but also for next year’s forecasts. What can we expect in the near future from retail? Sifting through the various foreign sites we have selected ten trends that we expect will drive retail evolution. Here they are.

  1. Customised approach thanks to technology. The customer feels chosen and understood thanks to communications transmitted via apps and the possibility for retailers to interpret his desires and choices. But also…
  2. Time is crucial. On and offline time for a certain range of customers (20-50 years old, working women, families with children) is a crucial factor in choosing where to buy. Which means fast deliveries and devices for quick shopping in the store (fast check out, fast payment, shopping list apps, click and drive and click and collect, product availability or fast shipping in the case of missing products).
  3. Virtual and digital assistants. Especially in the high-end of the market, consumers will expect increasing support from hi-tech devices which guide their choice. RFIDs, beacons and touchscreens will abound in the store.
  4. Price polarisation. The middle class is disappearing and so is the average price. The trend is increasingly towards the two extremes, low-cost and luxury. The novelty is that the same person can draw from either of the two extremes indifferently: for example, low cost yoghurt from the discount store and traditional balsamic vinegar from Eataly.
  5. Cross-sector sales. Coffee in libraries, insurance in supermarkets, music in coffee shops, it has got to the point where everyone is selling everything. An advanced example? Monop’lab in Paris gare Montparnasse (in the photo) which changes its range every month depending on consumer desires, in partnership with the caterer Elior.
    Monopl'lab Monoprix
  6. Product customisation or mass customisation. Mass production no longer meets the needs of consumers who can almost never afford real tailor-made. Which means in the future limited edition products created thanks to customer input, or those for market niches (the spread of gluten free products is one example).
  7. “Over forties” revival. The population is ageing and the offer will adapt. Fewer teenagers, more and more older people who require products “for the home”, home delivery, easy-to-open packaging and large and legible text.
  8. Women. The largest market in the world is still largely ignored by brands and retailers. But things are changing and sooner or later even they will realise it. Already today, in 65% of cases women decide which car and in 81% which financial products to buy. The opportunities for those who are the first to “talk” to the other half of creation are immense. An example? The Nike women-only store in Newport Beach, California (in the photo below), with annexed fitness centre that also offers yoga classes
    Nike-FI_Store_11.19.14-12_native_600
  9. Emotion and brand. To have connected and informed consumers perceive the pluses of a brand will be fundamental and therefore arousing emotions will be the lever to win their hearts and wallets. An example? WHSmiths, historic UK stationery chain, which sells cookery courses and hot air balloon rides.
  10. Emotional values and storytelling will also guide positioning, differentiation and the ability to tell the story of a brand. Provided it is genuine and linked to its deepest essence, not just entertainment but actually able to win the customer over to the brand.

Anna Muzio

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