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Retail Insights

Amazon, Alibaba invest in new ways to engage shoppers

 

Retail has always been a capital-intensive business, dependent on real estate investment, and slow to change. What we’re seeing with Alibaba and Amazon is that those rules no longer apply. These brands have the momentum and are able to spend their capital on new ways to engage shoppers rather than on building stores. Agile partnerships are what’s important today. For Amazon, third-party marketplace transactions have grown rapidly and now represent more than Fulfilled-by-Amazon transactions (FBA). Amazon remains at its heart a technology company. Its people don’t receive training for physical retail skills such as shelf management or selling from the pallet. What they want to know is the algorithm that makes shopper personalization and product filtering result in a sale. You could debate this idea, but once Amazon develops the software for Amazon Go, the self-check-out physical locations it’s planning to open, Amazon can sell this software and hardware to physical world retail partners. That approach is likely to be faster and more profitable than building its own stores all over the world. Amazon is focused on getting into your home. Alibaba is focused on helping small businesses access the world.

 

Raymond Gaul

Vice President, Research and Analysis

Kantar Retail

Ray.Gaul@kantarretail.com

 

 

 

 

Redefining customer service is key for retail brand expression

 

A great tension is surfacing for retailers. Brands cannot be invisible, but the consumer wants a seamless and efficient interaction, which doesn’t leave a lot of space for the brand. Some of the best retail experiences are when the retail brand is as thin a part of the interaction as possible. Part of the reason we’ve seen great strides online is that it’s removed some of the distractions of the shopping process. I see a lot of retailers looking to improve the service component. The product could eventually be the catalyst that gets the customer to service. In consumer electronics, for example, movement toward the Internet of Things has resulted in smart products that don’t always talk to each other because they are made by different suppliers. The retailer could become the consultant that crosses these walled gardens and helps the consumer make all the smart gadgets talk to each other.

 

EJ McNulty,

Executive Creative Director

Wunderman

EJ.Mcnulty@wunderman.com

 

 

 

 

Reframing mobile Shopping behaviors as in-store opportunities

 

The shifting media consumption habits of millennials are having a radical impact on the purchase journeys they undertake. No longer do retailers have complete control of the touchpoints influencing purchase once a shopper has entered their store. With the mobile phone established as an ever-present shopping assistant, consumers are increasingly likely to be researching products and comparison shopping online while in a physical store. For some categories it is now easy for retailers to lose sales to competitors through in-store mobile transactions. However, it is important to view these behaviors as opportunities rather than threats: from competitive conquesting through geo-fenced mobile ads to maximizing conversion with push notifications. The retail brands that will succeed in the future will be those that integrate the mobile screen into the retail experience. Utilizing technology like augmented reality to provide genuine utility and value, giving consumers reasons to stay in store, purchase and visit again.

 

David White

Partner, Director

Strategy and Communications Planning

MEC

David.White@mecglobal.com