The retail industry is one of the fastest-growing sectors in the world. With more retailers slowly expanding their business from brick and mortar to online retail stores, there is no looking back for players in this industry. But on the flip side, the retail industry is not entirely a bed of roses. Companies in the retail industry constantly endure various hindrances to improve their profits and simultaneously stay relevant in the market. One of the major challenges for players in the retail industry is to adapt themselves to the constant shifts and twists in the market. Furthermore, savvy shoppers even tend to spend a lot of time researching their purchases – and consider the entire customer experience before actually making a purchase. With increased exposure to the internet and social media, retail customers are not gullible anymore and are spoilt for choice. This puts retailers in a do-or-die position to survive in the market. But the hurdles for retail stores do not end here.
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We have curated five of the biggest challenges that companies in the retail industry need to pay heed to right now:
Top retail industry challenges
Customer behavior is changing rapidly. While e-commerce has its effect on brick-and-mortar stores, the market trends indicate that customers prefer purchasing most products in-store. However, customers are using the Internet to do reconnaissance work – that is, search online for product information, compare the best prices, and identify complementary products. While e-commerce now accounts for approximately 10% of all retail sales, estimates by various industry experts suggest that web-influenced physical store sales are about 5X online sales.
Modern customers are extremely choosy owing to the large number of options they have in hand. What could differentiate companies in the retail industry from one another is the in-store experience that they provide the customers. Shoppers want remarkable experiences when they enter a store. They want to enjoy personalized experiences, interact with products, and engage their senses with creative sights, smells, tastes, and touch. Virtual reality, showrooming, and other experiential retail strategies can position companies in the retail industry at the top of their category when experiential retail is done well. Trailblazers like Sephora, Nordstrom, and Anthropologie serve as great examples for retail industry players to improve their customers’ in-store experience.
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At the present rate of development in the retail industry, keeping up with technological advancements is imperative for retail stores. Transformation of payment processing and customer demand seems to be fueling the no-line, on-demand, or prepaid (online) options of completing in-store purchases. Digital wallets are now replacing slow legacy payment systems. Without the right technology in place, retailers won’t be able to offer these payment methods, potentially losing a chunk of your customer base.
Customer data silo
Modern marketing makes it necessary for companies in the retail industry to engage with their customers across many different channels. From SMS to email and social media, multi-channel communications are vital to engagement, which, in turn, drives the creation of the perfect customer experience. However, with so many separate channels, it is common for customer data to become siloed. If all the teams of a marketing department are not communicating effectively and working together, customers can become overwhelmed with conflicting or repeat messages. This flooding of marketing communications can have a negative effect and drive customers to competitors offering a clearer and more congruent message.
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