Game-changing retail and innovation that drives customer value

by Sanet Yelland. Most retail businesses and physical retail trading has been synonymous with the ‘nuts and bolts’ of transactional FMCG, but hasn’t always been seen as driving agile innovation or disruptive creativity.

Developing long-term success retail shifts and growth models begin with defining new retail value streams. The Shoprite Group’s progress with its ‘reinvention to intention’ strategy unpacks the inspiring business operating model that centres innovation in everything it does. It further details its fundamental shift business process, which is rooted in ‘duel transformation’. This happens when the core business is incrementally improved over time (improving efficiencies and profitability); while simultaneously riskier innovations and models are developed and introduced to market, allowing for time to find its footing in the marketplace.

The primary source of differentiation under which all innovation and future shopper growth lies in the retailer’s value proposition in the marketplace, i.e. the reason customers buy from one retailer over a competitor, and the promise of the value a retailer guarantee aims to deliver on. By defining a set of clear value propositions relevant to consumers and shoppers, retailers can decipher better strategic initiatives core to a differentiation strategy and, in turn, define new and better customer experiences aligned with the vision and mission.

Key winning approaches

Traditional format channels and business purchases are often siloed. While the retail market has driven accelerated omnichannel growth in online and offline channels, the integrated experience and cross-sell isn’t usually as flawless. Much of the channel experience needs to be rooted in shopper data and behaviour drivers to optimise both the channel purchase and the shopper experience. A great example of channel innovation is retailer Sam’s Club Now, which rests on the premise of ‘scan-and-go’ retail technology. A 32,000-square-foot scan-and-go shopping technology store was launched in Texas by the retailer; consumers use their mobile phones for the entire shopping experience within the store. They can scan and pay for items with their phones and without fuss, walk out through a controlled exit.

Less is often more

Retailers would traditionally put multiple products on shelves that the shopper would expect to find and purchase. Nowadays, typical large-format retailers and hypers’ assortments would be weighted favouring big bulk shopper needs and the ever-increasing choice at the shelf. Changing shopper dynamics, affordability, and deadstock, have necessitated that retailers change their offerings to be competitive with other retailers and increase profitability. This has seen the rise of SKU rationalisations and selective choice offerings for shoppers in online and offline purchase channels.

Better shopper engagement

Driving differentiation and securing repeat customers is founded on the shopper engagement factor. This is not just the product experience and transactional value of shopping at a specific retailer, but also the holistic view of the retailer’s value. A great example of this is Warby Parker, which was amongst the first to launch an easy shopping function on Instagram. But, being true pioneers in the online-meets-offline approach, it also offered e-customers the opportunity to try five real pairs of glasses in the comfort of their own home, for free.

Interoperability of financial reward payments

Rewards programmes are the backbone for retailers to grow customers to a database and integrate rewards redemptions via points and cashback as loyalty gains. The evolution of this will incorporate payment platforms that can seamlessly integrate customer data into a purchase without leaving the app and thus ‘own the customer’. The retailers’ value chain cycle that creates a seamless payment and loyalty system will further enhance the customer value to the retailer chain.

Rise of digital malls

The retail sector can learn from the digitisation of mall environments to drive innovation and offer better-personalised customer experiences. Funan Mall in Singapore, for example, drives digital innovations that bring its value proposition of work-live-play into experiences that consumers find valuable – like a smart interactive directory that uses facial recognition to provide shoppers with customised recommendations; video analytics that study shopper traffic and crowd density; and an all-in-one app for co-living serviced residences (the first app by a serviced residence company that will allow social networking and room booking, and serve as a mobile key).

Five key takeouts

1. There’s simplicity in better shopper tech personalised experiences.
2. Shoppers’ needs must be at the heart of all experiences.
3. Price is important when framed under new value drivers.
4. Audiences love surprises and delights, and the retail space should define an authentic narrative true to customers’ needs.
5. Cross category learnings from other sectors can be a competitive advantage when applied in unique ways.

Overall, the retail space is exciting, dynamic, and one we can call a ‘shapeshifter’ for shopper-centric experiences and value. Those who will win shoppers’ hearts won’t be afraid to take calculated risks to stand for something, and continuously put shoppers at the centre of new retail experiences.

 Main image credit: Supplied.

Sanet Yelland is the CEO and founder of Streamline Advertising, a full service agency. She has worked across the industry for 30 years, on clients within financial services, wholesale, retail, FMCG and government sectors on notable brands, including Massmart, Dis-chem, SAA, City of Johannesburg, Nedbank, Absa Bank, and Pick ‘n Pay (Score Supermarkets and RiteValue brands). Yelland started the Young Community Shapers initiative in 2000. This project acknowledges and celebrates the achievements of young people from disadvantaged backgrounds by providing funding, bursaries, and mentorship.

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