MANAGEMENT OF OBSOLESCENCE Perfect forecast Supply meets demand. Customers can access the right product in the right place at the right time, and retailers minimize stock Excess stock Value loss due to discount sales when actual demand is lower than expected
Short stock Value loss due to unrealized sales when actual demand is higher than expected
Excess supply Caused by long global supply chains from low-cost production centres and fast-moving fashion changing customer demands
uses algorithms and artificial intelligence to analyse online trends. By locating close to manufacturers, it is able to transfer ideas into products in a matter of days, which means it can also eliminate stockpiling and costly discounting.
PERSONALIZING CUSTOMER SERVICE
Retailers have largely addressed the challenge of mobile commerce by developing mobile-friendly websites and improved product availability and delivery options. Now the key transition is towards virtual commerce. A single cloud-based system creates an omni-channel that is able to connect and respond consistently across all the channels it contains. This is the era of the ‘always on’ customer, who is checking and cross-checking products and services through multiple channels. Retailers need to ensure that all brand touchpoints (product, store, service, marketing) align, as the customer increasingly becomes device (smartphone, desktop, tablet) and channel (web, store, social) agnostic. The omni-channel encompasses a number of touch points. A customer services function delivers the customer promise and tailors services using machine-learning technology, such as IBM Watson’s cognitive advertising, that allows two-way conversations between brand and consumer, while eliminating pain points like call wait time. Digitally-enabled stores offer smartphone-based self-checkout and in-store assisted sales, personal stylists and social media experts. Social media can be used for brand storytelling; and apps to encourage differentiation through loyalty rewards. Increasingly, gamification is used to create an exciting and compelling user experience –
Excess demand Due to changing consumer needs, increasingly demanding customers, and product trapped in the wrong channels
games that are fun to play, while giving insights to the retailer. This also encourages customer loyalty and advocacy. Customer acquisition and retention can be optimized through using search engines and loyalty channels that target individual customers based on browsing and purchase history. Even the website is no longer purely transactional – it also enables research online and purchase offline (Ropo). An example is the Ministry of Supply, a Boston-based clothing line, which is installing 3D-printing technology that will enable shoppers to design and produce custom-knit blazers in the store in 45 minutes. Augmented reality is already being used by companies like Ikea, which use it to show customers how pieces of furniture would look in their own homes on a smartphone before buying. The shift is from content that is focused on customers’ moments of need (solving problems with content), to creating immersive experiences that are personalized, timely and incite desire. This is aligned brand ‘pull’ through all channels rather than single channel ‘push’.
OFFERING SMART PRODUCTS AND SERVICES
The smart home has long been an aspiration for companies, too often defeated in reality by problems of system interoperability and siloes. Today, objects that were previously standalone can connect into an integrated system through sensors. Radio-frequency identification (RFID) uses electromagnetic fields to automatically identify and track tags attached to objects. The tags contain electronically stored information. Following the success of wearable products like Fitbit, smart clothing is now appearing that helps consumers monitor their health more
Dialogue Q3 2017