With 2019 well upon us, Australia’s ‘retail doctor’ has shed light on the key challenges set to shake-up the retail sector over the next few months.
Leading retail analyst Brian Walker, founder and CEO of retail advisory Retail Doctor, told Retailbiz that 2019 is a decisive year for retailers – and it’s essential that brands stay on top of some of the big challenges this year if they want to thrive in coming years.
“Retailers must adapt or perish. The theme of 2019 is to start the adaption now. If you haven’t already then you should start quickly,” he says.
In 2019, retailers will be pressed to balance growing consumer demand for convenient delivery, data-driven, personalised experiences and experiential retailing with the need to compete with the Amazon giant, Mr Walker says.
Fourth industrial revolution
The Amazon and Alibaba giants will continue to accelerate and place pressure on retailers to adapt, according to Mr Walker.
Keeping pace with the technology beast will be one of the greatest challenges for retailers in 2019, he says.
With technology accelerating at an astronomical rate, Mr Walker says the fourth industrial revolution is well upon us, and retailers must keep pace if they are to remain relevant.
Consumers want an experience to match that of Amazon and Alibaba – one that is powered by AI, ML and big data, Mr Walker says, and 2019 will test retailer’s ability to master these experiences.
“When you look at the content of Alibaba and Amazon it’s very predicated on this idea of data, the idea of personalisation of data, predictive tech, ML and AI, it’s all starting to permeate into the way we shop,” he says.
Another big challenge for retailers in 2019 will be giving consumers the convenient delivery experience that they increasingly desire, Mr Walker says.
This means offering seamless delivery and pick-up processes through services like Click and Collect, fast delivery turn-around and offering consumers flexible delivery options.
“This world of convenience of Click and Collect and fulfilment within hours is increasingly important,” he says.
Retailers will also need to ensure they are leveraging data to optimise and personalise the consumer experience – both online and in-store, according to Mr Walker.
“Retailers are going to need to build good data, good retail ecosystems, that’ll be a focus for 2019. And that’s going to be challenging, because we’re evolving from a store on every corner to building a retail ecosystem where there’s less physical stores,” he says.
Balancing the need to provide an excellent in-store experience with an online offering is going to be a huge test for retailers in the New Year, Mr Walker says.
“More engaging use of physical footprints linked to a good online offering and good fulfilment and distribution is also important,” he says.
Retailers will also be forced to drastically improve their in-store offering by leveraging AI and ML, according to Mr Walker.
“The challenge for retailers is to dial up the experiential aspects of shopping, including building loyalty as well as their point of different and uniqueness.”
Managing the rising costs of introducing this technology in-store and online is going to be a big task for retailers this year, he says.
“There’s no doubt balance sheets for retailers will need to reflect increased investment in this technology.”
Only the agile will survive
Retailers with the flexibility to adapt to these trends are the ones that will thrive in the coming years, according to Mr Walker.
“The non-adaptive retailers are the ones that will struggle in 2019/20. If you look at retailers who have fallen over their speed and adapt rates are too slow,” he says.
“The next thing for 2019/20 is we expect to see much greater focus on agility and being nimble in retail.”
But the retailers who have something different to offer consumers will also thrive in the 2019 retail climate, Mr Walker says.
“Where Amazon will struggle to compete is local knowledge, a high focus on customer service, increased investment in people,” he says.
“2019 is the period for many retailers to take good advice and to make measured decisions around their retail offering and to plan their strategy.”