Technology as a differentiator in the retail sector

Bangladesh’s retail industry is growing at an impressive rate due to the country’s booming economy.

A few retail companies have crossed the milestone of 100 retail outlets in the country. More importantly, multiple formats of retailing are getting deployed, indicating that the industry is reaching a new level of sophistication.

Retail chains in Bangladesh today are not necessarily built with multiple shops bearing a common name and logo.

Rather, the leading retail companies are implementing newer formats with integrated distribution chains.

Retail companies are expected to face multiple challenges as they grow.

Some of these will be related to changing customer behaviours, sustaining growth and the need to innovate continuously.

To overcome these challenges successfully, retail companies will need to employ the right kind of technology.

A number of large retail companies today use at least one software application to manage their organisational activities.

While some of them have implemented globally recognised retail solutions, others have chosen locally developed ones. Most of these companies use software at the point of sale and to manage their finance and accounting.

In Bangladesh, most of the large 15 retail companies have an online presence. This is an encouraging sign and indicates that the industry is well aligned with global trends.

Globally, most revenue gains have occurred through online channels. Moreover, the growth rate of online channels has been several times higher than that of total retail growth.

At the same time, traditional retailers have been experiencing flat or declining sales due to their absence from online channels.

While online sales growth is expected to dwarf the overall industry growth by several percentage points, retail companies need to carefully choose the right channel from the available options.

Global trends over the last three years suggest that the prospect of sales growth via mobile devices is much higher compared to that via other devices(desktop computers, tablets, etc.).

There are two technology options for selling goods via mobile devices: a) mobile apps and b) mobile sites.

Worldwide, consumers are showing a preference for mobile sites rather than mobile apps, primarily due to the high number of apps already installed on their devices.

Loyal consumers, on the other hand, tend to prefer mobile apps installed on their device for easy access and tracking of loyalty points.

Hence, it is imperative for retail companies in Bangladesh to focus on building mobile sites instead of other online channels to boost online sales.

An effective mobile site will require interactive features built upon comprehensive studies of user personas, particularly the behaviour of prospective buyers.

Business leaders must realise that a website developed for desktop computers is unlikely to generate sales benefits through mobile devices.

Shoppers all over the world have stated that screen size incompatibility was the biggest constraint for them to buy items from an online retailer, according to a survey conducted by PwC.

Thus, retailers may inadvertently drive away their customers if they don’t address these issues.

Today, retail companies in Bangladesh derive most of their revenue from their physical stores. This trend will continue in the coming years too.

While mobile sites and other online channels will provide much-needed growth, in-store sales will provide the stability of the existing revenue base.

A significant number of shoppers will continue to visit a store at least once a week. Boosting shoppers’ in-store experience will be critical to the success of retail companies.

On one hand, retail companies need to have the right kind of people to staff their stores, and on the other hand, they need to apply the right technology to make customers’ visits experiential.

For example, a customer may walk into a store to buy a particular product.

If that product is out of stock, a competent in-store salesperson would know that the item might be available at a nearby outlet of the store.

Technology should be able to provide this information to the salesperson quickly and at the point of customer interaction, so that he or she can guide the customer accordingly.

The staff may request the customer to visit the other store and provide him/her the address and directions.

He may also place an order on behalf of the customer so that the item is ready for handover by the time the customer reaches the store.

Alternatively, the staff may request the customer to continue shopping within the store and arrange for the item to be delivered from the nearest store within the shortest possible time.

Technology-assisted agility to respond to the customers’ needs will drive the conversion of footfalls into sales in the

coming years.

As retail companies in Bangladesh are growing in size, they will need to rely more on technology to achieve agility.

Today, retailers are collecting data about their customers through various channels.

Applying the right kind of data analysis and synthesis technology will help retailers to create a single view of a customer. This single view allows for a customer to be identified from his/her user log-in into the online store.

The same customer may be identified in a store by sensors and near field communication with the customer’s mobile device.

A single view of the customer will provide more meaningful insights and will help retailing staff to pursue sales activities effectively.

Given the immense potential of the retail industry, companies should start deploying the right technology and strategy to maximise their growth.

Views: 17