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Retailers need to evolve their offering and provide a more integrated online to offline experience, according to a new report from PwC.
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PwC urges change in the retail sector
26 November 2014
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Stuart Harker, PwC’s global retail leader, said the future for the retail industry lies in the development of the ‘connected store’ that provides a seamless transition between online and offline and uses data to create a more personalised, relevant in-store offering.
“The relevance of the physical store took a hit with the rise of e-commerce throughout the early to mid-2000s,” Mr Harker said.
“However we’re now seeing demand for greater connectivity between online and offline. Retailers need to combine the best of the digital world, in terms of customisation, availability, and price, with the physical world to create a differentiated in-store experience.”
The research showed the physical store still holds an important place in the retail mix, with 37 per cent of survey respondents citing the ‘inability to touch and feel a product’ as the main issue with online shopping.
The report said that in order to meet changing consumer expectations and deliver on the connected retail promise, the traditional retail model will need to be given a facelift.
PwC’s digital change leader, John Riccio, said retailers need to look at digital as more than just a sales channel and consider how it can help deliver a more integrated consumer experience.
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“With uptake of digital mobile technology, Australian consumers are now ‘always on’,” Mr Riccio said.
“In the not-too-distant future consumers will expect the products they research online to be available in their local store, immediately. Even something as seemingly simple as this requires a significant investment in areas like predictive analytics and smart sourcing.”
The report cites purchasing and sourcing, point-of-sale, and customer-focused marketing as three areas that retailers should immediately focus on.
PwC said point-of-sale and checkout systems could be overhauled to deliver a better in-store experience: for example, near-field technology could detect when a shopper is close by and deliver personalised offers and discounts to their smart device. Similarly, investment in traditional marketing could be re-directed to data analysis to create customised offers, inventory and experiences that are matched to the preferences of consumers at a local, store-by-store level.
According to Mr Riccio, retailers who can best apply digital technology across their entire business operation to deliver the optimal customer experience both online and in-store will prosper in the new environment.
“For all its benefits, digital technology has been unable to eliminate our desire to interact with a product in a tactile way when we’re shopping,” Mr Riccio said.
“The message for retailers is to use digital technology to create a connected store, a store that packages the best of the online and offline worlds to offer something new, innovative, and exciting.”
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