It’s something we’ve been banging on about for years, long before the world of retail was turned on its head by rocketing costs, draconian legislation and unfathomable levels of competition: the future is all about working both smart and hard.
In the past, working harder and harder has been enough to keep the industry buoyant and positive, but those days are rapidly drawing to a close. There’s only so many hours that retailers can work when they can no longer afford to employ as many staff. There’s only so many costs that can be cut before service and quality starts to be affected. And there’s only so much mileage in offering cheaper and cheaper product to the consumer, all the while eroding margins. It becomes a death spiral.
No, the future will be much more around thinking smarter. That means focusing on the parts of the business that you can control to generate more cash profit, more sales and more footfall. There are some obvious ways of doing that and many retailers are already heading down that path: differentiated stores with new USPs, food-to-go and coffee with its higher margins, more local sourcing and so on. But that will only take you part of the way towards a sustainable future.
The other area where retailers must look to grow profits, cut costs and enhance the customer experience is in the exploitation and leverage of technology and data. Our long-standing USP in this sector is the unique relationship we enjoy with our customers. But that USP is under threat. Online retailers and increasingly the mults and discounters are bridging that customer relationship gap using data and technology. Amazon knows its customers far better than we do, let’s be frank. Every transaction they’ve ever made, every promotion they’ve ever bought, every email they’ve ever responded too. And the supermarkets are spending vast sums trying to emulate that.
So it’s time for local retailers to take that USP back as their own – and they can only do that using technology. In its simplest form, that means relying on computers to do the spade work for us. Running a store using what’s in your head belongs to a bygone age. Integrated systems that link your EPoS to your ordering to your loyalty club to your marketing system to your promotional programme to your home delivery software to your social media platform – and ultimately to your database – is the future.
That’s why I would urge you all to attend our forthcoming #ThinkSmart3 event on 25 September in Glasgow to hear some expert thoughts on how we can leverage tech and data much more profitably. The future is much closer than we think.
Antony Begley, Publishing Director