Stores 2008 Global Powers of Retailing - (Page 46) Beyond the role of emerging country governments, some emerging country retailers could soon achieve the size and sophistication that will enable them to compete in rich countries. This could happen either through organic expansion or through acquisitions. A small number of such investments have already taken place, and the pace is likely to accelerate in the next few years. the elements influencing consumers such as store layout, signage, lighting, service, and the ease and speed of transactions. It is very important, however, that consumers find what they seek. Having the right inventory at the right time is critical. In the coming years, the world’s best retailers will increasingly focus on offering consumers an experience that is enjoyable, informative, entertaining, and easy. Today, some notable retailers are already undertaking customer experience initiatives that enable them to differentiate and maintain pricing power. Some supermarket chains have focused on creating a festive, street market environment that makes food shopping an entertaining event. Book and music retailers focus on the ability to spend time perusing books or listening to music in a comfortable setting. Some department stores are working to eliminate the tedium of separate transactions in separate departments. Instead, while still focusing on traditional department store merchandise, they are borrowing from the customer-friendly appeal of discount stores by offering centralized checkout, shopping carts, and wide aisles with large signs. 8. Multi-channel integration The rise of online retailing has taken market share from store retailers in some markets. Yet in the US, 40% of online retail sales are conducted by store retailers themselves. The opportunity exists to create a seamless multi-channel experience for consumers. The reality, however, is that many store retailers are failing to do this and that most do not integrate their online businesses with their store businesses. In addition, store retailers are competing with non-store retailers who own a sizable share of online retailing. To win this battle, the best retailers will most likely focus on enriching the brand experience for distinct customer segments across multiple channels. They will use websites not just to sell, but to build brand identity, engage consumers in dialog, and obtain feedback from consumers. Similar to what many retailers already do, they will use websites to inform consumers about store events. The information exchange that takes place online will play a role in the development of stores. Consumers visiting either the store or the website will experience a seamless brand, customer experience, and transaction capability. Although few are doing this now, future success will require such integration, especially for non-food specialty retailers. Currently, many consumers are disappointed to learn that there is a clear dividing line between store and online operations. Breaching this line will most likely be the principal online challenge for successful retailers in the coming years. 10. Retailers as world-class marketers In the past, manufacturers of fast moving consumer goods (FMCG) were considered the leading marketers in the world. They had their fingers on the pulse of consumers, spent considerable sums on market research, and were masters of using mass media to build brand identity. As retailers became bigger and more powerful, suppliers had to focus more on relationships with their customers than their consumers. Trade spending became more important than mass media advertising. Retailers became the principal holders of relationships with consumers. Moreover, through their sale of private label goods, they became leading suppliers in their own right. Yet most retailers still lacked world class marketing skills. That is now changing. Today, some of the world’s top retailers are aggressively hiring top marketers away from FMCG companies. Their goal is to become marketing powerhouses, to build strong brand identity in order to compete with other retailers and, increasingly, to compete with branded suppliers through private label sales. Indeed private labels are no longer simply a way to offer low prices. They are an important channel for building brand and improving profit margins. Consequently, tomorrow’s leading retailers are likely to be world-class marketers. 9. Focus on customer experience As discussed above, one of the leading problems faced by many retailers is a lack of differentiation among competitors that leads consumers to view stores as commodities. 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