27 Feb 2020
Posted in Retail
Convenience and experience emerge as differentiating factors in dynamic retail environment, says GlobalData
On the back of intensifying competition in the retail industry, customers have become more demanding when it comes to convenience and the shopping experience, as they know that they can always switch to another retailer for buying goods if their expectations are not met, says GlobalData, a leading data and analytics company.
Retailers across the globe are heavily investing in launching frictionless shopping initiatives and loyalty programs to attract as many customers as they can. Frictionless/contextual shopping/commerce is the method of using data, technology, and devices to integrate buying opportunities as seamlessly as possible into the shopper’s journey. The goal is to reduce the amount of time and inconvenience involved in the steps between the desire for a product and receiving it.
Vijay Bhupathiraju, Retail Market Analyst at GlobalData, comments: “For retailers, the broad benefit of investing in frictionless shopping is that consumers are more willing to make a purchase if there is minimal ‘friction’ when progressing through different stages of the buying journey. However, the concept of friction differs not only across the variety of individual shopper journeys, but is also a subjective ideal that varies from shopper to shopper.”
Asia-Pacific (APAC) consumers’ continued shift towards hyper-convenient and technologically advanced retail has shaped the retail competition in the region. According to GlobalData 2018 Q4 Consumer Survey – Asia & Australasia, this shift has been to such an extent that 46% of the surveyed consumers were making purchases through their smartphones, while laptop/desktop users were found to be 44%, clearly highlighting the shift in shopping preferences in the region towards mobile.
A shift in consumer preferences from visiting hypermarkets and supermarkets to shopping frequently at neighbourhood convenience stores is encouraging retailers to open smaller format stores that incorporate the latest in technology. Consumers are getting more particular about the way they shop, and a mere value proposition isn’t the only focus. Factors of convenience such as frictionless payments, personalization, relevant offers and delivery & fulfilment services, all play an equally important role. In these changing times where busier lifestyles have fuelled ecommerce due to the convenience it offers, it gets important for retailers, both online and offline, to align their operations and offerings to demand rather than supply – so following customer preferences.
Bhupathiraju concludes: “All frictionless shopping services and loyalty programs being launched by retailers are aiming for a better connection with consumers during their retail journeys and meaningful insights must be drawn from the data collected at each retail touchpoint. Consistent innovation and optimizing the retail channel by leveraging digital capabilities to enhance the overall customer experience must be at the forefront of a plan of action by retailers and brands. However, one-size-fits-all won’t work as convenience and experience are purely subjective and a careful balance must be retained.”