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Dead or alive? – How game-changing digital technologies will boost stationary retailing business

Retail and consumer goods industries will change more in the next 10 years than they have in the past 40 years

 Although online business and internet shopping in CPG industries have been constantly growing during the last decade, they are predicted to increase even more in the upcoming years. People are simply buying more online than they used to.

Stationary retail trade is under pressure and declining dramatically – In the middle of an economic recovery, hundreds of shops and malls are shutting down.

But is stationary retailing dead? Definitely not!

Stationary retailing will remain relevant, because it makes products tangible and enables direct customer experience of the merchandise. The huge number of products that online shoppers are returning clearly shows the potential of stationary retailing. However, it will have to be redefined in the context of online business and focus on hotspots, flagship stores and customer experience.

Consequently, increasing investments for a better experience in stationary retailing can be observed. Currently, different shopping scenarios are being tested and assessed regarding user-friendly application and implementation.

The following scenario shows what future stationary retailing could look like.

Enhancing customer experience with game-changing technologies

When entering the shop, a camera recognizes the customer profile: whether male or female, young or old, conservative or stylish, etc.

The customer is guided accordingly to his estimated interests by means of a customer guidance system (panels, displays, mobile phone information) and will receive personalized offers.

While a shopper is trying on a new garment, the mirror virtually displays similar products, or complementary and color-coordinated collection items such as jackets, shirts, shoes, accessories, etc.

Once the consumer holds his purchase in his hands he wants to see its origin and the place of manufacture, or, in the case of food, the complete food chain. For luxury goods, an authenticity guarantee is possible. New technologies such as blockchain offer innovative approaches and possibilities.

The customer confirms the purchase on his smartphone and now has the option of having the purchase delivered directly to his home while he continues shopping. Or he takes the goods with him right away without standing on line at the checkout, because payment is made automatically in the background as he leaves the shop.

Automating the value chain

From a store management perspective, every pickup of an article from the shelf is immediately registered, forwarded and processed by sensors. If the minimum quantity is exceeded, restocking will be triggered automatically. An indispensable condition for all these functions is precise Master Data Management (MDM).

Retail employees receive accurate information promptly in real time on their smartphones. The use of robots and automatic shelf restocking is also currently being tested. Soon it will be possible to integrate and largely automate the entire value chain. It will be possible to operate shops around the clock with relatively few employees and previously unknown consumer service levels. Master data management as the fundamental building block for online business as well as stationary retail trade will become more important than ever.

What does that mean for the future retailing? – New business models are needed to attract the customer

Additionally, consumers expect webshop functions in stationary retail shops: they want to get detailed information about products and further useful recommendations, e.g. wine and its characteristics, grape variety, cellar and drinking temperature, but also suitable menu suggestions with the possibility to order directly. Stationary retail trade is the stage where products are being presented in the real world and where consumers are offered very special experiences which they do not have so completely online.

As the number of returned products is increasing, producers try to create more experience in a shop. Many customers say it is important for them to check reviews, see alternative products or further recommendations. The webshop functionalities embedded in stationary retail have significant potential to enable their survival beside the dramatically increasing e-Commerce.

About the authors

Anna Steinhoff is an experienced management consultant at CAMELOT, mostly in the consumer goods industry. Her blog posts guide readers through a joint journey towards “digitalization” – with regular insights into the latest topics as well as outlooks on future developments and their impact on the consumer goods industry.
(Contact: aste@camelot-mc.com)

Peter Harder is Partner for Consumer Packaged Goods (CPG) at CAMELOT Management Consultants. He has an MBA in economics at the University of St. Gallen (Switzerland). Peter is responsible for the development, dissemination and delivery of thought leadership in the CPG sector. His special focus is on digitalization, supply chain management and operations, i.e. demand-driven lean supply chain management. He is an inspiring, visionary speaker at numerous leading conferences. Peter has more than 20 years of business consulting experience and successfully led major Business and SCM Transformation projects at well known global, international and national companies.
(Contact: phar@camelot-mc.com)


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