5 Key Challenges Retailers Face Now

1. The Omnichannel Dilemma

Heather Raines:

The top 3 challenges our clients are facing are focused around creating an
Omni Channel, or as we like to call it the Omni Commerce experience. In no particular
order:

Data and data management The amount of data available today and the
increased customer expectation to have access to a lot of product information has
made data management a priority. Many of our clients are looking to PIM and
MDM solutions to supplement or even replace their legacy item master and data
repositories.
Inventory visibility and availability Our clients are looking for ways to
maximize the inventory they have and to ensure that it is accessible via all selling
channels and customer engagement points. Although the solutions may be
different by retailer the goal is the same.
Technology and innovation. Many of our clients are leveraging technology that
needs updated or replaced. Technology and system capabilities are changing and
innovative solutions leave IT departments scratching their heads as to how to keep
up.

Ken Morris:

A key challenge is to deploy a real-time retail model across all channels to

enhance the customer experience. Retailers need to create a single, unified commerce
platform which eliminates individual channel silos and offers a holistic customer
experience across all customer touch-points.

Doug Fleener:

By far the biggest challenge is the drop in [in-store] traffic as a result of

consumers taking less shopping trips. This is especially a problem during the holidays.
Rob Henneke:

To tie online and offline, putting mobile apps in the hands of store associates
truly empowers them to be more efficient and better serve customers.

Bob Phibbs:

Mobile is a big pain point. While marketers can text to shoppers either at their
home or as they stroll by a store, there is a still a creep factor retailers are trying to figure
out. How much is too much interaction and how much is beneficial?

Tony Ward:

The top challenges were seeing all have a consistent theme: We know
omnichannel is here, but how are we going to do it? How do we operationalize
omnichannel? Retailers are wondering how to create a consistent customer experience,
particularly when many are behind on having any e-commerce and mobile presence, now
considered table stakes.

On the back end, the omnichannel movement is also raising a lot of questions about
fulfillment. What are our needs, and how will we mobilize to meet customer demands?
And all of this is happening at a time when sales are slow and top-line growth is elusive.
Last, but not least, how will we make this profitable?

2. Point of Sale Security & Payments

Ken Morris:

The top challenge in retail today is securing the POS and all customer data
from breach. This is a pervasive issue that even some of the biggest chains havent
figured out yet.

Rob Henneke:
 Data Security is high on everyones list of concerns. Regardless of the level of
compliance with PCI, this is one issue that keeps not only CIOs, but also CFOs and CEOs
up at night.

Bob Phibbs:

Payments tie in well here. While Apple Pay made big news the other day, there
are other providers looking to get their share and they all put fraud and security costs
ultimately back on the retailer see Home Depot and Target. And how much attention
should be paid to mobile payments when adoption seems sluggish?

3. The Evolving Customer Profile

Jon Weber:

Todays consumers are also highly informed, enabled by new technologies

and tools which provide them unprecedented access to information like pricing, product
reviews, etc. This, combined with the fact that the universe of retail options for many
products is seemingly endless given online alternatives, makes it very challenging for
retailers to win consumers spending dollars.

Finally, todays consumer is markedly different than even a few years ago. Their
expectations are extremely high.they expect the best of everything, 100% availability,
fast delivery, and so on.and even the most affluent consumers find it silly to pay full
price for most things, so stimulating purchases without being aggressive on price or
delivering exceptional value is nearly impossible.

4. Customer Acquisition
Jon Weber:
 The biggest challenge facing retailers today is how to drive traffic to their
stores. At a macro level, store-based retail sales are not growing virtually all growth in
consumer spending is being captured by e-commerce so evolving the stores role and
function is critical, as a means to add value to the consumer and being productive for the
retailer at the same time.

Bob Phibbs:

With less shoppers making the trek to a mall to buy apparel, electronics, and
other items, the key focus is on how lookers are being converted into buyers.

5. Maintaining Employee Efficiency

Doug Fleener:

Finding and keeping good employees has always been a challenge in retail.

Rob Henneke:

Effective use of existing applications is a challenge that many retailers face.

As staff turns over and the business continues to evolve and change, it is important to
revisit the use of existing applications to ensure they are being used to their full potential.

5 Opportunities for Growth in the Next 6

Months
1. Embracing Omnichannel Systems and Processes
Ken Morris:

Consumers expect a seamless experience in the store, on the Web, or

anywhere customers choose to shop. This idea of real-time retail will change the face of
retail in the coming years and this is why real-time retail is the new imperative.
Unfortunately, most retailers dont have real-time retail capabilities today and first mover
advantage is still available in this game.

With advanced networks and sophisticated software and analytics, the technology is
readily available to enable unified commerce. Now is the time to align the people and
processes with the technology to make real-time retail a reality!

Tony Ward:

The omnichannel movement has made end-to-end supply chain visibility more
important than ever. Retailers who are able to see across the entire enterprise have the
flexibility to make near-real-time decisions to reroute products and streamline
transportation to get the right products to the right locations at the right time. Thats going
to be key to success this holiday season and beyond.

2. Market Segmentation
Jon Weber:

Another trend creating an opportunity for growth is the rising income

inequality gap that is squeezing the middle class, resulting in an hourglass economy.
Retailers should ensure they dont get caught in the middle, but look to exploit
opportunities at the top or bottom and Id argue skewing to the top, where consumers
account for a disproportionate amount of consumer expenditure and have the means to
spend, is the more intriguing place to play for many businesses.

3. Optimizing The Offline Sales Process

Doug Fleener:
 A huge opportunity for growth will be having a much more effective frontline
sales staff. With offlinetraffic dropping retailers must be able to convert more customers,
and increase the average sale. It will also be important to use events and other
activities to drive incremental visits. Third, buy online and pick-up in store has
become an essential offering, and must be executed flawlessly. We also see
text marketing as a better way to engage some customers.

Bob Phibbs:

Price and promotion are dead. The only way to be competitive in a sluggish
economy is your people. Can they do a better job than a competitor? It takes money, it
takes thought and it takes skill. Employees are no longer arriving into a single job looking
to make a difference; theyre looking to get a paycheck. Hiring masses of part timers is
diluting the brand strength in the stores.

4. Inventory Management Processes

Rob Henneke:

Selling seasons are short. Stock outs cause lost sales. Transfers are costly.
Markdowns are a hit to the bottom line. Getting the right inventory to the right
store/channel at the right time has a significant impact on overall performance. Proper
Planning, Allocation, Replenishment (and the related issues such as Size Scaling) will
make a big difference in a retailers bottom line.

Tony Ward:

The consolidation were seeing in the discount and grocery sectors is indicative
of the fact that there are fewer and fewer opportunities for growth. A few years ago,
retailers were laser focused on cost-cutting to improve margins, but now the focus is on
flexibility and speed to market. Were seeing this specifically with inventory
management.
5. Mobile
Heather Raines:

Mobile. Mobile. Mobile. The number of shoppers leveraging mobile devices

(smart phones and tablets) at some point in their purchase path continues to rise.
Regardless if the customer is purchasing, showrooming, browsing or bridging in-store
and laptop/desktop experiences via their mobile device, the engagement is greatly
impacting the overall purchase journey. A clunky mobile experience no doubt will impact
a retailers holiday sales expectations not to mention customer loyalty and brand
perception long term.

Retailers should evaluate how their customers are using or would like to use mobile to
engage with them then target some key areas that will improve the customer experience.
When making improvements, dont forget to address experiences by device type and
operating system.

Jon Weber:

If you are not already embracing digital (online and mobile), than you are
behind the curve the pace of growth in the online channel is significant and will only
continue.

5 Imperatives to Stay Competitive in 2015

1. Understanding and Retaining Customers
Ken Morris:

Retailers have to listen to the voice of the customer, differentiate their

offerings to the multi-generational customer base with drastically different needs,
shopping habits and interactions with the brand. Once retailers master this challenge, they
will become intimate with the many customer personas at store level to truly drive
competitive advantage.

Jon Weber:

Retailers need to find compelling reasons to communicate with consumers.

Because they are so empowered with digital tools (e.g., smartphones, tablets, social
media, blogs) and inundated with information and so many other stimuli, its imperative
to find ways to cut through the noise and strike a chord on something that actually
matters to them.

Doug Fleener:

They also must get better at using data to understand who are their most
profitable customers and how to increase their sales and visits.

Heather Raines:

The simple answer is that retailers need to continue to study and understand
their customer. They need to understand their customers needs, satisfactions, and
evolving shopping expectations. It goes beyond basic demographics.

The best way to be innovative is to be your own customer. Experience what your
customer experiences and then solve for the most painful points in the purchase path. We
think no matter what is right for a particular retailer, all need to be thinking about creating
a seamless customer experience across all customer engagement points.

2. Omnichannel (Of Course)

Jon Weber:

Retailers must also clearly define the role of the store vs. other channels (e.g.,
e-commerce) so that each plays a distinct part in their model and offers incremental value
to the consumer. Whether a showroom, transaction / fulfillment center, return center,
source of inspiration, educator, or a combination of these or other roles, each channel
needs to work together to deliver value to the consumer.

Rob Henneke:

Everyone has their own name for it, but bringing all channels together so that:

There is one view of a customer across channels

There is one view of inventory across the enterprise
Order anywhere, pick up anywhere, ship anywhere can be deployed effectively

3. Shaping the USP (Unique Selling Proposition)

Jon Weber:

Finally, the world is changing so fast that its so easy to get leap-frogged or
disintermediated today. So, retailers must always challenge the status quo and ask
themselves, Are we really delivering a compelling value proposition to the customer that
is differentiated vs. alternatives?

Heather Raines:

Innovation doesnt necessarily mean creating something new. Innovation can

also be rethinking and repurposing what you already have to make it fresh or improved in
some way. Not all retailers are going to be able to implement the latest technology or
come up with the leading edge concept for every aspect of their business but all can
evaluate their customer, their customer needs and their competition and come up with
creative ways to leverage some of the infrastructure they already have but in a fresh way.

4. Optimize the In-Store Experience

 Doug Fleener:

Retailers must continue to elevate the customer experience to make the in-store
experience even more compelling.

Bob Phibbs:

Employee sales training to convert those who your marketing did attract to your
doors into buyers. Less part-timers, more stable shifts and more 30+ hour employees who
have a stake in your success.

5. Sourcing
Tony Ward:

In addition to the challenges and opportunities already noted, retailers should be

looking closely at their sourcing strategy. As retailers look to become more nimble, they
are updating their entire supply chain and fulfillment strategy, and it starts at the source.
Weve seen a really dramatic shift over the past few years, with more and more retailers
looking beyond China for sourcing opportunities.

Retailers are considering moving production closer to their customers and identifying
other attractive locations for sourcing. Those who make the right moves and tweaks will
have a competitive advantage in the years ahead.

The Google Shopping Guide: 2017 Edition

Next-Level Implementations in 2017 for Advertisers on Google
 *

About the AuthorJon Gregoire is the Director of Demand Generation at CPC Strategy.
Jon heads up email marketing, content strategy, co-marketing, and revenue cycle
efficiency. A UC San Diego grad, Jon is a Chicago native and full-time San Diego tourist.
He enjoys Bear Grylls-like backpacking trips, archery, weekend getaways in Southern
California, watching his beloved Chicago Bears, and bidaily coffee consumption. Want to
pitch a story? Reach out directly at jon(at)cpcstrategy.com. See all posts by this author
here.

Major Problems of the Retail Industry

by Jared Lewis
Related Articles

1 Top Challenges in the Retail Industry

2 Problems With Retail & Over-Inventory
3 Challenges of Retail Marketing
4 Social Factors Affecting Retail Business

The retail industry is a driving force in the American economy, so much so that news
reports often base at least part of their perception of the economy on how the retail
industry is performing. Aside from the major economic ebb and flow of the buying
seasons and how they affect retail sales, the retail industry as a whole has a number of
other major problems that it must often deal with.

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Employee Turnover
Lack of worker continuity, or employee turnover, is one of the major problems faced by
the retail industry. Columbus IT notes that the typical turnover rate in North American
retail is much higher than in European countries and often ranges between 200 and 300
percent. Employees coming in and out of your business as if it were a revolving door
only creates problems for human resource professionals who must constantly find and
train new staff, which can eat up valuable time and resources.

Auditing
Auditing is another problem that the retail industry faces on a regular basis. Retail
businesses are regularly engaged in competition with one another, and this competition
can create price wars, forcing a need to keep tight control over inventory and other
important data. MetricStream, Inc. notes that the retail industry is often faced with
inefficient and poor auditing plans that make competing with other companies difficult.
The company notes that existing auditing systems may be outdated and provide
inadequate audits needed to stay competitive.

Economic Challenges
Another area of challenge for the retail industry is the economic uncertainty it faces
moving forward. The retail industry as a whole is largely dependent upon the economic
well being of the nation. As the nation prospers and people have more money to spend,
the retail industry generally flourishes. However, in more difficult economic times, the
retail industry is often faced with potential shrinkage. Columbus IT also indicates that the
future uncertainty of global economic markets makes economic planning difficult in the
retail world.

Technology
Keeping up with the pace of modern technology is another problem the retail industry
faces. For instance, retail point of sale technology often uses computer systems that are
several years behind the computer industry as a whole. An article in Mobile Commerce
Daily by Peter Finocchiaro points out that the inability of retail industry technology to
keep up with initiatives such as mobile digital coupons is a problem that the industry
regularly faces. Given the rate of turnover and the constantly changing economic
environment, constantly upgrading and keeping their equipment and networks running on
the newest technologies can be difficult for retail leaders.

1. Building employee engagement

Despite the online revolution, retail is an industry characterised by personal interactions

between customers and staff. Debate continues about whether human interface will
eventually be overtaken but at heart, retail is a relationship focussed business, even for
"pure-play" online retailers (who still need to engage customer service representatives to
interact with customers online or by phone). In the age of social media, customer
perceptions about the service they receive from staff has real and often immediate
impacts. This means that ensuring that your workforce is engaged and attentive is vital to
retention, productivity and long-term success. This drives the need to think about, and
plan for, how the business will engender the organisation's chosen culture particularly
with a geographically dispersed workforce.

2. Transforming the workplace

Given the pressures identified above, in traditional workplaces like retail, there is a
pressing need to rethink the way work is performed; the way relationships exist in the
workplace; and the regulation which impacts it. A prime example of this is the
rationalisation of supply & delivery chains as the old ways of distribution and selling
continue to be refined and redefined. Retailers now need carefully to manage the
relationship with those who 'deliver' purchases to consumers (whether employees or
contractors) customer experience with deliveries will have a direct and profound impact
on the way the retailer is perceived.

Achieving this transformation within a collective bargaining environment is a significant

challenge in many workplaces that model is built around a traditional adversarial
engagement between employer and employees. Successful organisations are now
adopting a more sophisticated approach, which involves ensuring that employees (and
others) are not just another 'input' to the business, but are aligned with the business's
strategic direction. This involves a number of elements, one of the most important is to
move beyond the narrow focus of traditional 'enterprise bargaining' and thinking more
broadly about the 'whole relationship' with employees. This means considering how to
build relationships with employees outside the frame of enterprise bargaining.

3. Driving flexibility and productivity

Ensuring you have flexibility, particularly in relation to labour, is critical to being able to
harness the benefits of rapid technical change and meet the effects of globalisation.
Flexible and adaptable businesses require commensurate HR support to drive and
implement change effectively. As we've mentioned previously, this means working to
avoid or minimise impediments such as restrictive terms in enterprise agreements.

Like many employers, the retail industry has a history of agreements which fix terms and
conditions that may be out of line with current market conditions and the needs of a
modern business. There are ways through the maze but it is all the more important for
businesses to strategise and plan carefully for the future to maximise the prospects for
positive change.