Social media platforms, online and smartphones redefine retail

Social media platforms, online and smartphones redefine retail

Sumit Kumar, global director, customer and market analytics, Gap, said smartphones and mobiles are playing an active role in driving sales and growth in the industry.

By Muzaffar Rizvi - Business News Editor

Published: Wed 10 Jun 2015, 11:43 PM

Last updated: Wed 8 Jul 2015, 3:16 PM

Dubai — Technology is now playing a key role in people’s lives and retailers who fail to integrate an omni-channel presence in sales will struggle in the future, experts say.

Sumit Kumar, global director, customer and market analytics, Gap, said smartphones and mobiles are playing an active role in driving sales and growth in the industry. He said retailers should take customers’ advice seriously and personalise their shopping experience.

“In my opinion, there are three key trends shaping apparel retail today and is also valid for other industries as well,” Kumar told Khaleej Times at the Retail Leaders Circle programme, which concluded on Tuesday.

Introducing the term ‘Phygital’ to denote the first trend, he said the boundaries of digital and physical continue to blur.

“For several retailers today, mobile contributes a significant part of overall traffic. Customers are likely to spend most of their time pre-shopping on their smartphones to check brands prior to visiting a store to make a purchase. Therefore, as retailers, we have an imperative to put forward the best expression of our brands into customer’s hands.”

Elaborating on the second trend, he said technology and the current retail landscape present an unprecedented opportunity to delight customers through personalised product offerings and promotions based on their location, in-store browsing behaviour and prior history with the brand.

“Knowing that many of the customers pre-shop online, at Gap, we have successfully implemented several cutting-edge omni-channel capabilities like ‘Reserve in store’ and ‘Order in store’ that make it easy for our customers to place their favourite styles on hold at select Gap stores and make their shopping experience more personalised,” Kumar said explaining the third trend in the retail industry.

Evolution of retail

While describing the retail segment’s evolution in the past decade, Kumar said new concepts and technology have revolutionised the industry.

“Over the past five years, US malls’ foot traffic has declined to unprecedented levels. While online has a clear value proposition around convenience, physical retailers, especially within the fashion industry (where the touch and feel and fit of product are important attributes) have to consider the role of the physical store environment to complement their online offering. The era of retail we are in is fuelled by mobile,” Kumar said.

Referring to Deloitte 2014 holiday survey and other research, he said consumers prefer the in-store shopping experience over online. Majority intend to do some form of pre-shopping online (on mobile) prior to making in-store purchases.

“Brands like Gap that have a holistic omni-channel understanding of our customers’ journey are well positioned to leapfrog ahead to win in this new paradigm,” he said.

Influence of social media

Kumar said new age social media platforms like Pinterest and style blogger sites like Gap’s Styld.By have gained huge relevance as go-to destinations for design inspiration.

“Customers are more connected than ever and are largely influenced by their peer groups for the smallest of purchases,” he said.

Kumar said that the recent Goldman Sachs report on Millennials — the generation of adults born after 1980 — said that this age segment is now on the cusp of overtaking Baby Boomers as America’s biggest spenders. He said brands that embody the core value system of this customer segment are positioned to win.

Focus on window shoppers

Mustapha Tabba, chief operating officer at Ipsos for Middle East North Africa and Pakistan (Menap), said retailers in the region should target a larger segment of window shoppers and focus more on the entertainment value of the outing that must complement the shopping experience.

“In the Middle East, the pastime associated with shopping is more accentuated than what we see in western markets. While this may decrease with time, the gap remains,” he said.

He said value for money equation will always exist, yet retailers will need to adopt more niche strategies, depending on their consumer targets. This will become paramount as the market grows and competition becomes more fierce.

“For business professionals, who are becoming more stressed for time, online shopping will become a mainstay in Dubai in the short and medium term,” he said.

New malls, Expo 2020

To a question, he said new mega mall projects and the Expo 2020 will boost growth prospects for the region’s retail industry.

“Clearly, malls will continue to be the mainstay for GCC in general and Dubai in specific. The growth in tourist activity will continue to fuel mega malls in Dubai and ensure their viability. Expo 2020 will add to that.”

“I see malls having to focus more on the entertainment value of the outing,” he added.

Marino Maganto, CEO at Ikea for Kuwait, Jordan and Morocco, said technology is playing a crucial part in people’s lives and retailers that fail to integrate an omni-channel sales strategy will struggle.

“Consumers have become more demanding as they want to access their favourite brands anytime anywhere. They demand better products at better prices.”

He said money and time are the two most important resources in today’s society. Retailers have to adapt their offering and operations to create a seamless shopping experience. Accessibility and ease of shopping are crucial.

“More people are moving into the middle-class segment, thus shopping is not to fulfil their basic demands anymore. In many cases, brands represent a status symbol. This is one of the reasons why luxury brands continue to grow at a higher pace than the economy in most markets where they operate. They provide a symbol of prosperity and well-being and will continue to grow despite economic trends.

“In the Middle East, consumers are well-travelled. They know the brands from overseas and have very high demands on quality and service. Price in many cases is not the decisive factor, but a triangulation of price, quality and service will determine where consumers will buy,” Maganto concluded.

Top five rules to delight customers

> Listen closely to your customers and build relationships in a genuine and human way

> Personalise their shopping experiences as the best you can

> Delight them with little things when they least expect them

> Be present for them on the go and in the context of their daily lives

> Stick by your brand promises

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