Competitive advantages are eroding, and customers are in control
The retailer competitive landscape is complex today. When describing competition, it is hard for retailers to succinctly describe what they are facing because they are seeing traditional chains, marketplaces, ecommerce only and even third-party delivery companies appeal to their customers. Whether the retail is in grocery, fashion or in specialty retail, competition is more diverse. Potential disruptive competitors are popping up each quarter, creating ongoing competitive chaos.
Retailers have been consumer-centric for years, identifying needs by segments and working diligently to meet them. However, digitally enabled consumers expectations are higher. Consumers realize they are in control with competitive retailers’ apps just a swipe away. McKinsey’s recent study identified that in the past two years, 40% of customers have switched brands and retailers recently and 80% have adopted new shopping behaviors. With the customer as the channel, retailers need to show up to consistently deliver highly engaging customer experiences and relevant communications and offers. Marketing teams are tasked with coordinating these communications and are adopting the latest developments in retail technology to deliver relevancy to discerning consumers.
A more disruptive and less predictable future
Not only is the competitive landscape dynamic, but retailers’ overall business contexts are fast changing. As shopping behaviours and preferences change, digital touchpoints grow, resulting in expanding digital needs and expertise required to manage critical business data such as product
“The disruptive forces shaping the industry are no longer framed by distinct events, but are instead forming a constant backdrop that continually tests retailers’ resilience and agility”- EY
and supplier data.
Retailers also have an extensive network of partners helping them go to market, reduce product innovation cycles and improve the marketing assets to reach consumers. Effective collaboration with these partners such as ad agencies, digital marketers: need better tools and digitalization of existing business processes. Information and data no longer flow in one direction; collaboration with suppliers, digital agencies and internal teams are now bi-directional. Collaboration requires increased transparency of information, requiring more receivers of information and variety of data needed. More variety and volume of data will be flowing inter-enterprise as retailers adopt more of an ecosystem-based approach of going to market.
Retailers should expect a continued flow of disruption as new digital first business models are invented and launched with the potential risk of upending traditional retail.
Mitigating the chaos requires a data platform that facilitates collaboration
In the past few years, retailers have been laser focused on the last mile in product delivery as well as data delivery to consumer facing digital touchpoints marking their shopping experience as easy, engaging and convenient as possible. During this same time, many of the technologies that house the marketing copy, product information and customer information have remained unchanged. Oftentimes, retail teams need to undergo herculean efforts, including major data transformations, extracting and uploading the data to various systems to get the data ready to be used and visible by consumers. These efforts have constrained their ability to be flexible to react to current consumer needs. Better strategies and tools are needed to be put in place to have a trustworthy source of business data that can be used across the organization and with partners to enable data end-to-end data orchestration from supplier to consumer.
Three opportunities for retailers to embrace ongoing change and succeed
With the changing consumer tastes, new brands entering the market and new ways that consumers are searching for information and discovering product, agility in data management is critical capability for retailers. Below are three areas where data management matters:
Manufacturers and retailers are refreshing their brands and individual products to ensure ongoing relevancy and interest among shoppers. In fact, 51% of North American businesses have rebranded in the past two years. Rebranding may be driven by the need to showcase health benefits, more sustainable product features or even to update logos for today’s consumers. Brands are leveraging digital data delivery to be more agile, testing new messaging, feature callouts and even new markets. Rebranding from the retail point of view requires a well-coordinated effort from the suppliers through the retail data management teams back to commerce teams. A well-orchestrated workflow at the retailer can ensure the rebranding is done efficiently, correctly by executing proper data governance and approvals.
Consumers increasingly start their product search online. Brands must appear in the top results and drive retail search results to capture the sale, which is where more – and better – content comes in. The quantity and relevance of content a brand provides directly impacts the likelihood that the product will appear when relevant search terms are searched for, along with location data and inventory data. Retailers lacking in the ability to refresh assortment according to current search terms risk losing brand consumers and even category shoppers. Learnings from brands and retailers alike can be instituted across the category with product management and applied to multiple digital channels when applicable. Strong data collaboration between brands and retailers can drive win-win solutions amidst constant change.
Digital channel expansion
According to Insider Intelligence, the ecommerce channel is expected to slow from 12% growth in 2022 to 9% in 2025, compelling many retailers to look for new channels of growth such as drop-ship, live commerce, social commerce and new virtual realities and marketplaces. Retailers wanting to expand into these channels are creating marketing programs for supplier participation. These programs extend retail media network and can be innovative areas for brands to experiment and drive higher growth. Retailers can effectively run these new marketing programs in emerging digital channels by utilizing existing data onboarding and supplier data channels that are used in current brick and mortar and ecommerce channels.
Agility is good for business and the community
While lean and just-in-time were keys to business in the past decade, more brands and retailers are building businesses that are not only resilient but also flexible. Preparation in manufacturing as well as streamlining data management and enrichment can ensure that if an emergency happens or a disaster strikes, the company is ready to respond to help meet the needs of the community. This approach to planning and resulting agility can be tremendously beneficial in speed-to-market and addressing new opportunities.
While retailers have rightfully focused on customer experience including the engaging aspects of the website, apps, and social channels, the depth and timeliness of product data contained in these digital touchpoints are increasingly important for new channels and opportunities. Retailers can ensure long-term growth by increasing their digital competencies unlocking efficiency with governed agility from the supplier in mile one to all the way to the consumer in the final mile.
ABOUT THE AUTHOR
James Andrews, Stibo Systems Director of Technology Partnerships and Ecosystem
James is a product marketing executive with over 20 years experience, most recently in the NLP and MDM space.
His current tenure at Stibo Systems has included bringing to market their PDX Syndication platform that bridges the last mile data exchange between manufacturers and brand owners with global retail commerce and ecommerce platforms.
In his current role, James leads the technology partnership ecosystem, evaluating and securing partnerships that integrate into Stibo System’s SaaS platforms to complement and fill product portfolio gaps.
Brian Cluster, Stibo Systems Industry Strategy Director, CPG & Retail
Brian has more than 25 years of experience collaborating on strategy, delivering analytics and developing business plans and digital transformation. At Stibo Systems, Brian is putting his varied industry expertise to good use, providing direction and strategy for field teams and helping to drive customer value for master data management solutions. He is a frequent contributor to The Consumer Goods Forum, and his articles have been published in Consumer Goods Technology, Multichannel Merchant, Total Retail, Footwear News, and Center for Data Innovation, among others.
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