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Connected Retail:
Reshaping tomorrow’s
operating model and metrics
pwc.com.au/connectedretail
Symphoni – The future of the
connected enterprise
Using technology to
recognise customers and
develop relationships
with them
Level of integration
As highlighted in our report, retail
inventory management Connected and curated – Long Omnichannel
decisions live the store, retailers are in a
Multichannel
retail
position to connect with customers retail
through technology to offer a far Ecommerce
superior experience – anticipating
and surpassing their needs
and expectations.
Time
Connected Retail means connecting
the customer seamlessly Although the approach to retailing has evolved to accomodate the changing
to personalised marketing, needs of the customer, this evolution to date has had relatively little impact on
the physical store, the digital the business model. Beneath the customer touchpoints, the level of integration,
Using mobile devices to
connect store staff with experience, supply chain, seamless
payment options, and most in many cases adding cost to the existing operating model. As illustrated in
customers and provide the above diagram, Connected Retail demands full integration and an entire
importantly to help staff to deliver
them with data to a branded customer experience. transformation the retail operating model.
be productive
Within the next few years, digital
technology will be pervasive,
so whether you are a customer, Connected Retail will require businesses to deliver a
employee or supply chain partner, consistent branded experience that makes the customer feel:
you will interact seamlessly with the
Connected Retail, physical and digital ecosystem of a
which means: rewarding way. to engage through
also need to have an increased focus on direct-to-consumer interaction and experience to ensure that their brands retain
value when competing with retailer’s private labels. In the world of Connected Retail, consumer goods companies will need
to focus on:
Allowing business Enabling digital interactions Digitising processes Ensuring secure information
transformation through with customers, eployees to improve customer in a digital age to inspire
innovative models that don’t and the broader community satisfaction, employee trust by customers and all
exist in the market today. in a more engaging, productivity and relevant stakeholders.
seamless way. supplier interaction.
The Cyber and Privacy Director (CPD) is responsible for inspiring trust
by customers and all relevant stakeholders. As retailers move to a data
and technology-enabled business model the reliance on technology
increases, as does the risk of threat. Given the importance of privacy
and cyber threats, this role needs to be elevated to ensure security is The Channel Logistics Director (CLD) is accountable for ensuring
designed into the experience and actively managed. products are available regardless of channel or fulfilment option. They
must ensure there is complete real-time product visibility across the
entire supply chain and has the right level of agility built in to the process
to enable the customer to choose how and when they would like to
obtain the product. Customer service is also at the forefront of the
engagement given this is in most cases the last interaction the customer
has with the business.
The scorecard for tomorrow’s leaders Figure 6: Key metrics for Connected Retail senior leadership
For the CEO, customer advocacy will Retail Channel Operations Retailers will share customer
Corporate Service quality
become the main forward looking will live and die by a granular and demand data with strategic Services Variable service
understanding of conversion suppliers to help them make short Director customer
become more important than metrics across all channels and by and long term decisions about new Data Data quality and
headline sales growth as retailers product development, marketing Operations currency
metrics to tweak the offer down and production. Sustainability Sustainability Director Data value
An effective Customer Engagement to an individual customer, their Metrics that pure play online Director score
Director will need real-time purchase stage, and known channel retailers like ASOS are currently Ethical sourcing Customer Real-time
customer advocacy metrics across of choice. using, will be applied across
Engagement customer
Chief Total profitable Director advocacy
several customer touchpoints physical stores too. Chief Customer
Performance growth
allows a ‘single view of product’ Officer Executive profitability
Transformation Officer
concerned with primarily building – where each SKU is at anytime success
a base of loyal customers and and ultimately who bought it Channel Regional growth
keeping them. – will power metrics across the Cyber & Privacy score Operations Customer effort
supply chain. Security Director score
Cyber defence
Director coverage
is likely to be inspired by and adopt Strategic suppliers will share
Channel Channel
metrics from fast fashion retailers, production and inventory data to Logistics flexibility
Products Product brand
like Zara, that drive short focused provide forward looking metrics and Director Delivery in
& Services alignment
development cycles. allow smart choices about customer Director channel first
NPD days
time
$742 OFFLINE
64%
SUMMER
20
CAMPAIGN
Visits
Operations
DECEMBER 2013
HOME STORE: ONLINE RE-ENGAGE INFORM PROD
OTHER STORES: CHADSTONE, VIC
MOST RECENT VISIT
39%
FAMILY: EMILY, 12 (DAUGHTER) ONLINE MAR 2014 L O YA LT Y P O I N T S
COLLECT OPTION
Fraud detection
TO E M I LY F O R
FREE OFFER
REGULAR SHOP
INFLUENCE INDEX ENGAGEMENT INDEX
12 PwC
Imagine if stores and systems ‘had a voice’
By 2020, the pace of technological
innovation will have accelerated even The experience With effective profiling, stores will be able
to provide customer service employees
The Endless Aisle concept embraces a
move toward true integration between
Real-time marketing effectiveness across
the organisation driven by location-based
With increased access to data retailers
are in an opportune position to create
more and mastery of new technology
Imagine if retailers could anticipate with more comprehensive Training and what have ‘traditionally’ been regarded data and predictive analytics, enable Customer Profiles that provide a rich
customer needs, so that they always information about shoppers’ preferences as off and online channels. With trends retailers to predict what a specific shopper picture of customer behaviour and
of tomorrow. and product benefits. If handled properly, such as mass customization, 3D printing will care about, based on the behaviour preferences. With this information they’ll
had access to a full range of products
at all times while in-store. This would this can streamline a sales process and and virtual fitting rooms – retailers are of their peers, and be able to present that be able to offer benefits that are more
deliver an extraordinary experience make customers feel truly valued. in a position to reimagine the physical offer when it’s relevant. meaningful and personalised.
and increase advocacy. environment.
digital wallets, social shopping, on-
demand manufacturing and wearable
technology becoming common place. The role of customer services will Stores will need to rethink their use Up-to-the-minute information about the A richer customer profile will enable more
significantly change – with an impact on of physical floor space to optimise for sales environment will allow marketers to meaningful, context-sensitive interactions.
training techniques, competency models being a showroom, a fulfillment center, adjust promotions and prices dynamically, It will also help to understand customers at
technologies enhance the Connected for hiring, and even compensation. a manufacturer, or more. The concept of based on activity, proximity, purchase a more granular level.
Retail operating model and products may also change. history and preferences.
provide more granualar insights to
enhance success?
As information is exchanged digitally Product and shelf sensors coupled with Next-generation displays will aim to Store managers will need to update
Deeper understanding of the data across the chain, retailers and their RFID can collect data throughout the generate sales from wider selections. merchandising models to reflect new
available on customers, business suppliers will make real-time inventory entire supply chain – from dock to shelf. They’ll also be able to predict trends customer behaviors. This may change
decisions, just as manufacturers have This could lead retailers to re-architect by allowing retailers to capture more space allocation and placement fee
and the market to provide a
been doing. how operations and business intelligence information about customer interests, revenue.
detailed view of behaviour and the
capabilities are deployed. and they may even allow real-time
make predictions (Big Data). merchandising experimentation.
The performance Efficient staff utilisation will mean real- With increased transparency across By opening up a richer store of information Predictive maintenance means sensors
time customer support, personalised and systems and customer behavioural data, and real-time customer data, Loss embedded in manufacturing and retail
Granular comprehension of Imagine if a store was ‘alive’ and delivered where and when it is requested. the ability to provide Curated Pricing Prevention and Cybersecurity will be a equipment will self-diagnose for repairs,
product movement to meet could communicate information about Digitisation and automation of resourcing becomes a very real opportunity for top priority for Connected Retailers. loss- some of which can now be done locally by
regulations, reduce costs, increase the health of its own assets and will also translate to redefinition of roles, retailers to improve conversion rates. prevention schemes. ‘printing’ parts.
safety, and mitigate risk and loss. systems. If a retailer could plug in to a better streamlining and prioritisation of
live feed, it could respond in real-time tasks to reduce costs.
to improve performance.
With staff utlisation strongly reliant on Retailers that manage curated pricing Retailers will need to anticipate a variety of Early warning signals for maintenance and
data interpretation, skills required for models effectively could see real gains risks and to mitigate against these threats repairs have the potential to shrink supply
customer service will be significantly in revenue and inventory management. across all channels. Risks in any one chains. At the same time, 3D printing can
Perpetual connectivity and impacted. This will mean having a clear single view channel may represent a threat across all help reduce equipment down times.
communication manifested by the of customer and working to understand channels and the overall business.
rise of the internet penetration, the nuances and correlations between
smart devices, and social media. behaviour and pricing.
storage
storage locations
location
Set
picking
Pick from
anywhere
Imagine if...
location
Fluid rates
Set from port to
delivery point
rates
Set Innovative
transport transport
modes methods
customer advocacy.
19 territories during August and September 2014. Australian results are based on
subset of 1,002 online interviews.
Richard Blundell 19 territories during August and September 2014. Australian results are based on
subset of 1,002 online interviews.
+61 3 8603 0086 10. Data sources may include and are not limited to: media, social graphs, social services,
+61 415 881 841 web chat, apps, online behaviour and call centres.
richard.blundell@au.pwc.com
Australian consumers were carried out during July 2014. Please note that some
results have been omitted.
Acknowledgements 12. Fast Company Staff, ‘The World’s Top 10 Most Innovative Companies of 2015 In Retail’,
Nirosha Methananda, Fast Company, date unpublished
Inga Freiin Von Fircks, 13. Solomon, B., ‘America’s Most Promising Company: Instacart, The $2 Billion Grocery
Andrea Marffy, Delivery App’, Forbes, 21 January 2015
Jenna Ralph, 14. Lynley, M., ‘Instacart Is A New Startup That’s Going To Eliminate Your Trips To The
and Chris Warry. Grocery Store’, Business Insider Australia, 6 September 2012
15. Kern, C., ‘Amazon drones could provide delivery for as little as $1’, Integrated Solutions
for Retailers, 16 April 2015
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