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Retail and Hospitality

Manhattan predicts 2013 retail trends

Offering exceptional customer service is vital to the success of physical stores

Global supply chain optimisation provider Manhattan Associates has released its predictions for retail shopping in 2013, with developments in web, mobile and social commerce set to continue reshaping the way goods are bought and sold domestically and in overseas markets. The projections forecast that continued pressure on margins from prevailing economic conditions and an increasingly inflationary environment will force both bricks-and-mortar and online retailers to invest in strategies and technologies that make their assets work harder and that help them reach new customers in new markets.

“Online-only retailers have, by and large, been the winners to date in the on-going retail revolution that continues to see the volume of goods bought online grow and grow, however traditional bricks-and-mortar retailers are starting to fight back by investing in services and technologies that will help them remain both profitable and relevant, said Craig Sears-Black, UK managing director at Manhattan Associates. “They are implementing what consumers like about e-commerce into their stores at the same time as investing in their own online offer and making the overall cross-channel shopping experience seamless for their customers. They are also, in increasing numbers, selling their goods overseas – through online and offline ventures - and building infrastructures and associated systems capabilities that can facilitate this.”

Manhattan Associates has identified seven top trends that are set to influence the UK retail scene in 2013:

Online retailers facing tough competition
Online shopping is expected to account for 11 per cent of UK retail spend over 2013, rising to 15 per cent by 2017 and more than 30 per cent by 2022. While online-only retailers may have taken a large slice of the online sales market in recent years, bricks-and-mortar retailers are investing in their multi-channel offering, meaning that online retailers will now have to up their game to retain market share.

Mobile commerce is here to stay
Annual smartphone shipments are predicted to soar to one billion globally for the first time this year and over 172 million tablets will be shipped internationally in 2013. This will increase mobile shopping and force retailers to optimise their websites and online shops for smartphone and tablet access. Retailers will also need to offer brand, store or product mobile interactions to their shoppers. Examples include quick response (QR) codes, gift cards stored in mobile applications or free applications to scan a product’s barcode and have an instant quote on delivering the same product direct to their home.

Winning the showrooming battle
Increasingly consumers visit bricks-and-mortar stores to look at products but then buy them online at a lower price. In the lead-up to Christmas, 24 per cent of all UK shoppers showroomed and 40 per cent of those that did bought items from a competitor after comparing prices. The number of showrooming shoppers will grow to 59 million this year, 69 million in 2014 and 78 million in 2015 in the US alone. To win this showrooming battle, retailers will need to build customer profiles based on previous purchases to encourage future transactions. Those merchants that are most likely to combat showrooming are those that provide a great in-store experience, run outstanding loyalty programmes, offer private labels or exclusive brands, embrace both consumer and business technologies, and provide consistent superior customer service across their multiple and integrated channels.

Investment in in-store technology accelerates
The next months will see more technology integration between the store and other channels to ensure customers get what they want when they are actually in the store. At the front-end, tablets, apps, QR codes and interactive screen technologies will be used in innovative ways to facilitate search, payment, and other in-store service options, whilst at the back-end, order and warehouse management systems as well as supply chain intelligence tools will ensure stock availability and visibility.

A seamless shopping experience across multiple channels will become critical
Consumers demand a cohesive view of the retailer, whether in-store, on the retailer’s website or on its mobile shopping application. They expect to find consistent items, prices, availability, payment methods and promotions across all channels. To meet these increasingly complex demands requires creating a single view of the world that can be facilitated by a distributed order management solution, which provides flexibility in the way supply chains are able to execute fulfilment. Moreover, an intelligent supply chain management solution helps to move beyond the simple view of inventory held in stores or at the distribution centre and widens the field of vision to encompass all the channels through which the company interfaces with the consumer. By being able to see – and make available for sale – as much inventory as possible, the opportunity presents itself to sell more.

New competitors emerge
Expect more consumer-to-consumer marketplaces to emerge this year. Existing examples involve consumers selling and trading online, and advising one another about their buying experiences at the same time. Also several consumer goods companies are starting to reach out directly to the end users through social media channels and online websites.

International expansion to accelerate
With UK consumers tightening their purse strings, the real business growth opportunities lie in overseas markets such as Australia, Brazil, Russia, India or China. For example, as consumers in China become more comfortable buying goods online, the number of online buyers on the mainland will rise to nearly 220 million in 2012, further outpacing the US total of approximately 150 million. The starting point to grow overseas is to expand their shipping options to include international delivery, before launching a transactional website in a given market.

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