Where to next for SME retailers?

Omni-channel is now common practice, and is likely to be a prominent concern for retailers in 2016.

It is one of the five key areas that I predict businesses will need to focus on to be successful this year.

Prediction 1: More SMEs will turn to omni-channel

This year omni-channel adoption will expand beyond the current user base of large retail chains and will become far more common within the SME sector.

There is a growing body of local evidence that automated omni-channel capabilities can significantly increase sales and reduce markdowns simply by creating virtual pools of stock that are available to fulfil orders from any channel. This is a compelling argument for SME retailers to try to find new ways to shift stock and maximise their revenues.

They need to offer customers an easier way to transact, be it reserving or purchasing online and picking up in store, or vice-versa. The mix of options will differ according to each retailer and their target consumers’ preferences. What is going to be common in 2016, however, is the need to seamlessly conduct business across an ever-evolving number of channels.

Prediction 2: Personal experience

There is a growing desire among retailers to know more about their customers in order to give them a better experience.

Online stores have long monitored past purchases, browsing habits and abandoned carts to understand their customers’ likes, dislikes and preferences. Bricks and mortar stores are now looking at software systems that can give them the same information, providing them with insight about a consumer’s past purchases, colour preferences, styles and more.

Over time, this will lead to a blurring between web and store retailing as both will be able to deliver the personal experience consumers expect today. In 2016 Omni-channel will move a step further – enabling interactive consumer engagement regardless of channel.

Prediction 3: Recognition of the importance of data

Rich data from all channels will increasingly be used to develop and strengthen services to customers. Retailers that offer a one-to-one service engagement will tap into their data to enable them to create highly personalised experiences.

The challenge for SME retailers is selecting and investing in technology that will enable them to make the most effective and profitable use of their customer data.

Prediction 4: Retail staff will be equipped for mobility

Currently, the focus of mobility is on consumers using their own devices, to research, price and purchase goods, or as part of a mixed in-store/online experience. Given the high rate of ownership of tablets and mobile phones, it’s a safe bet that retailers will continue to find new ways to encourage and support this behaviour, and consumers will continue to use their own devices to obtain goods for the best possible price.

However mobile devices are also being put into the hands of store associates. This is a practice that a limited number of retailers have adopted in Australian stores but is going to accelerate during 2016. Mobile devices enable sales associates to access customer information, product information, inventory, sales and other retail systems, at their fingertips, resulting in improved productivity and increased sales.

Prediction 5: Data security and privacy

As the quantity of personal data held by retailers grows, security and privacy will become ever more critical. Retailers must protect their IP, customer and store data, and IT systems with proven security solutions. Cybercrime is on the rise and businesses that don’t have robust security in place will face enormous challenges.

On the positive side, it’s worth noting payment technologies such as Apple Pay and Google Wallet are also continually being developed and their security improved.

Mark McGeachen, Chief Executive Officer, Island Pacific

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