In a challenging environment where retail stores are closing around the country, a new report says it’s critical that Canadian retailers innovate and adapt to the changing landscape.
BDO is one of Canada’s largest professional services firms primarily serving mid-market clients with a variety of accounting, tax and advisory services and over 120 offices across the country.
“Retail is constantly evolving. It’s dynamic. For retailers of all sizes, now is the time to innovate to survive and thrive. What got you here is good and worked but it may not be enough for the next five to 10 years,” said Eric Matusiak, partner and national retail leader at BDO Canada.
“The second message that came out of our research was this is not a time for complacency. Retail is on a tear right now. The last two years have been very good for Canadian retailers but this is the time to sort of look at your business model and say ‘what do we have to do to re-invent to continue to be relevant to our customers going forward?’. It’s really organizing around that customer experience because the way people shop is changing. Their expectations of what they get from a physical store are changing and also from a digital store. Not only do you have to have a consistent customer experience across all channels but especially for those retailers who have physical stores you have to have a reason for the customers to visit the store because there’s so many ways that they can shop without visiting you.”
He said Canadian retailers are lagging behind their U.S. and U.K. counterparts on both the implementation of e-commerce and the use of data analytics, adding that even a small retailer can enhance their customer experience and improve their business processes – without spending a lot of money.”
“I still find that a lot of retailers don’t do the customer information thing very well. I find that a lot of them equate customer relationship management with a loyalty program and that’s only one small piece of it. I do think that Canadian retailers need to step it up on the customer relationship side and really start both capturing and then using customer data, market data, even data that’s not even within their organization to better predict what customers want, predict what they’re going to buy and suggest things to them . . . to increase sales, increase loyalty,” said Matusiak.
The report identifies five critical retail trends and focus areas for retailers to future-proof their business:
Technology – automation and artificial intelligence, virtual and augmented reality, beacon technology, mobile pay and data analytics are changing the game in the retail sector;
Experiential retail – retailers need to let customers interact with a product and build communities that will engage current and potential customers;
E-commerce versus bricks and mortar – stores are creating hybrid and omnichannel shopping experiences to reach their customers wherever they are;
Consumer shopping habits – Millennials, the biggest spending cohort for retailers, are influencing the shopping habits of other age demographics; and
Customer relationship – retailers need to develop a customer relationship management program that captures and integrates implicit and explicit customer data.“From a strategic perspective, retailers have to really reassess their business model. I know that sounds like consultant speak but it’s really taking a hard look at the channels that you use to reach customers,” said Matusiak. “So for example if you say ‘well of course we have stores and we have an ecomm division’. But how integrated are they really from a strategic perspective?
“If I’m an omnichannel buyer, can I buy anything from you in any way in any time? Is that a seamless experience? And do I have the right balance between my channels?”
Retailers also have to look more closely on the technology front to support the business model and make the customer experience more friction-less, more seamless, more rich.
“It doesn’t mean jumping on the bandwagon and buying a shiny object . . . because everyone else is getting it. It’s still investing wisely in technology but also being aware of what trends are coming and selectively picking the ones and saying that’s what I’m going to need in my store or in my digital shopping experience,” added Matusiak.
“It is now business-critical for Canadian retailers to rethink and redesign their strategy. Several of these trends in the industry have had enough traction to be proven, but there’s still time for retailers to adapt to them. A methodical approach is recommended: develop a holistic strategy rather than jumping on the bandwagon.”