New Retail, a term coined by Alibaba, is the latest buzz term doing the rounds, but what does it really mean for brands, and how can they achieve it?
Essentially New Retail is the endeavour to seamlessly blend online and offline, ensuring every channel and interaction point work in total harmony, providing consumers with consistent and, frictionless brand experiences. In essence, creating a channel-less world. To thrive here, brands must acknowledge that the changes made now, capabilities developed, and operating models devised, won’t yield immediate results. New Retail is in the early stages of evolution, it’s a work in progress that requires brands to constantly refine and reinvent themselves for new missions and occasions. To help you on your journey, here are six considerations to win in New Retail.
Picture 1: Clash of the titans in bid to conquer New Retail
Amazon and Alibaba are leading the way innovating around New Retail concepts.
1: Adopt a shopper-centric model
The best brands put shoppers at the heart of their operation, giving full consideration to the end-to-end experience, from awareness to purchase to referral. Consider committing to embedding data and smart technology into your operations, breaking down the data silos within your organization for cross-function interconnection and extending links with the broader ecosystems of customers such as Alibaba and Amazon.
2: Reimagine R&D and supply chains
Brands succeeding in New Retail will transform their operations to exploit the potential of the new realities it entails, making them more efficient. These brands will use real, comprehensive, and timely understanding of consumers to optimize R&D, and adapt their supply chains to meet the needs of New Retail shoppers. In R&D, brands must adapt to shorter cycles, include consumers in product development - early and often. Supply chains must be flexible enough to adjust in real-time based on sales results, and exceptionally efficient by utilising artificial intelligence and Blockchain, while enabling the inclusion of Internet of Things and emerging technologies such as Voice.
3: Reimagine marketing and CRM
Brands must recognise that their products must live and succeed in a digital world. The retail ecosystem now encompasses purchase, payment, delivery and all the other customer touchpoints. This grants the opportunity to reach consumers in new, exciting ways, whenever and wherever they are. The power of online is that it creates a closed loop for interacting with consumers. From collecting data, to deriving insights from it, to refine marketing messages and experiences to ensure greater relevancy for the target audience, and individual. Ensuring anything deployed is appropriate to mission and touchpoint, while constantly refining learnings to transform marketing from a brand expense into a brand asset.
4: Modernize route-to-market and retail formats
Retail of old is defined by multi-layered distribution networks, riddled with pain-points. Costs are high, brands have limited control, limited transparency into sales, and legacy systems unable to accommodate new routes to the consumer. In New Retail, distribution networks are being simplified, with leading brands cutting out the pain-points, removing the middle men, creating streamlined digital-enabled route-to-market models. In doing so, costs are reduced thanks to fewer levels in the value chain, coverage is expanded thanks to greater flexibility in the supply chain, while visibility of sales performance and channel relationship is increased thanks to real-time inventory and sales data. Gaining greater control of the value chain also enables brands to introduce targeted retail formats, reducing communication costs, while increasing SKU productivity. Messaging can be tailored, and consumer insights generated from sales data relied upon to optimize product portfolios within a retailer. In New Retail, a new major role for the store will be the collection, and ultimately effective utilisation, of consumer data.
5: Digital Transformation - Organization and Operating Model
While another overused term, winning in New Retail requires not only a mindset shift, but redesigning the organization so it is fit for purpose. Fundamental is understanding the need to organize for data. Operationalising for the seamless coordination of internal functions, beyond sales and marketing, between offline and online platforms, is fast becoming a basic requirement. New Retail success requires breaking down the siloes, working in cross-functional teams, with marketing, sales, consumer engagement, eCommerce, store, data analysis, and supply chain, all working in harmony. A key consideration here is coordinating resources across different products within a brand’s portfolio.
6: Lean in on new technology
The life blood of New Retail is, unsurprisingly, technology. Investing in technology, innovating with new solutions, either consumer facing or operational, provides brands the opportunity to be more efficient, while better serving the needs to modern shoppers. This does not mean ploughing money into every new fad. A systematic approach is required in deciding which to experiment with, and which to adopt. Technology must solve a pain-point, meet a need, or enhance the shopping experience. Test and learn is the name of the game, but a vital first step is to assess current assets and capabilities. Once done, setting clear goals for digital transformation, with a defined roadmap and implementation plan, will be essential. Learn from failure, but celebrate success. The effective implementation of technology will underpin New Retail, enabling brands to thrive within it.
New Retail is a journey, not a destination, and to the consumer it is all just shopping. Remembering these six steps, thinking more like a retailer, and adopting a shopper-centric mentality, will help ensure you thrive in this next phase of retail’s evolution.