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Engine Of Progress — Automation Trend In Retail
There are many retail companies in Russia and all over the world, and all of them can be segmented by the staff structure and the wideness of range. Often, specificity and rules of business in one segment are absolutely different from the regulations of other segments. This is the case of specialized retail, which makes its unique demands on business management.
Specialized retail: What is it about?
To understand the principles that determine specialized retail working conditions, let's formulate the definition of this segment. The product range of specialized retail companies is usually limited to one or several product groups, which come within the company specialty; this range is often supplemented by appropriate complementary goods or services.
- sporting goods stores: Adidas, Rebook, Nike;
- jewelry stores: 585, SUNLIGHT, Almaz Holding;
- fashion stores: H&M, Mango, ZARA, Lamoda;
- watch stores: Swatch, NIKA;
- beauty and perfumery stores: Yves Roсher, Ile De Beauté, L’Occitane en Provence, etc.;
- Premium and luxury brands: Longchamp, Gant, Furla.
Having understood the peculiarities of assortment matrix formation and examined the profiles of appropriate specialized retailers, we can extrapolate about the most important distinctive features of business dealing in this segment:
- Direct dependence of company performance indicators on the brand loyalty.
- A strong motivator for buying in specialized retail segment is, more likely, the buyer's desire to take enjoyment in the purchasing process, and not the actual need for the product.
- A few of product categories, along with the need for the satisfaction of individual demand, requires the differentiation of assortment not by categories, but by their characteristics (attributes).
- Minimum volume of stock reserves in points of sale (most of products are placed on shelves immediately).
- In the eyes of a buyer, the value of purchases effected in specialized retail stores (due to price policy, quality policy, and brands positioning in this segment) is higher than that of the purchases belonging to the same groups in other segments.
Currently, all retail segments are in one way or other prone to economical crisis phenomena, and in these conditions, retail companies have to search for the ways to improve their business efficiency taking into account all the above listed peculiarities.
Retail vs. crisis
In the times of crisis, along with retention of existing loyal buyers, it is also possible to increase the number of loyal buyers who have decided or have been forced to change the brand due to economic or other reasons. This requires:
- To understand and consider the personal needs and habits of every customer.
- To allow the customer to choose product parameters at his/her own discretion.
- To motivate the staff to manage all customer needs and to control actual performance indicators.
- To provide the possibility to supply products individually for each specific customer.
- To develop and implement personalized loyalty programs, often with complicated bonus charging rules.
- To have many available channels providing the maximum information accuracy for the products range preview and verification of their purchasability, which is of great importance.
- To meet high expectations regarding after-sale services (repair, consultation, support, etc.)
In the times of crisis, many retailers, by force of some reasons, sacrifice service level of their stores in favor of cost-effectiveness, which adversely affects customers sensation of buying process itself. Considering common service quality degradation in competitive chains, its improvement can help not only to retain the existing customers, but also to attract the new ones, for whom the pleasure of shopping is an essential factor of brand choice. This requires: first, to implement more flexible and simple policies for goods return and replacement; second, to pay more careful attention to the organization of gift certificates and "Want it as a gift" programs schemes; and third, to constantly ensure and control the staff knowledge of traded goods attributes. Moreover, by joining all sales channels in an omni-channel integrated model, it is possible to maximally simplify the interaction between the customer and the company.
As practice shows, in case of purchasing power erosion, which is the major consequence of crisis, people are ready to pay only for the goods which fully meet their demands, and in this situation they will not accept a compromise. To accurately adapt the assortment to more rigorous criteria of choice, companies need to analyze customer needs in detail by studying customers profiles parameters, assortment matrix items, analyzing sales data at lower levels and more precisely.
Efficient process automation for specialized retail
To retain the profitability at pre-crisis level, companies need to look for ways of maximum optimization of their operating activity (purchasing, logistics, merchandizing, etc.). The following actions can serve as examples:
- acceleration of goods relocation between points of sale;
- improvement of stock accounting quality and forecasting of demand for it;
- widening of supplies planning horizon along with reduction of minimum inventory level at warehouses and points of sales.
- sales and office staff efficiency improvement.
The above-mentioned actions are pretty obvious, but their practical implementation is linked to the need for collection, processing, and analysis of huge arrays of data on purchases, balances, customer preferences, goods flow, staff performance efficiency. Thus, the manual execution of these actions by company employees is almost excluded, and companies have to implement specialized retail informational systems capable to fully consider the specific character of the business. But there are complications. Often, many companies do not even think of correct organization of operational activity and its efficient automation until problems related to economic downfall arise.
Yet, it can be done at a reasonable moment and with adequate quality. This requires correct selection of informational system for trading company activity management; the system shall meet at least two requirements:
- To be originally developed with consideration for specificity and tasks set for the specialized retail in order to minimize implementation and ownership cost.
- Its development company shall have a great experience in the field of specialized retail processes automation to not only ensure the informational system deployment, but also to help the customer company optimize its organizational processes according to the best practices in the industry.
- Modular, service-oriented architecture allows companies of any scale to automatize their processes at minimum deployment cost.
- The possibility to set all business processes in such a way as to consider the company specificity in the best way.
- The most significant distinction is the module of omni-channel sales management, which allows to erase all organizational and technical boundaries between existing sales channels and to easily add new ones without spending time and money, and to manage them. There are various scenarios of omni-channel sales management, such as "buy online — pick up from store," "by on cellphone — return to store," "buy online with home delivery," and many more.
- Clienteling module helps sales staff to quickly identify a customer, to always keep track of his/her preferences, as well as to record all changes in them. Availability of a mobile version allows employees to always be there for customers and consult them in case any question arises: discounts available for him/her, availability of the selected product in the store or possibility to order and deliver a product with needed parameters from other points of sale, offer complementary goods or services.
- A powerful analytical module can provide information on company activity indicators in fact in a real time mode with any refinement that can be required.
- Human resources module includes all tools necessary for development and control of the sales staff everyday activities, which can twice increase the efficiency. The activity data can be linked to processes that involve one or another employee, which will allow the company to monitor the correctness of the execution.
- Inventory control module is designed so that to be adjusted to any rules of inventories replenishment, relocation, and inventory.
At the moment, with the partnership support of ICL Services, a new company, which meets both of the above-mentioned requirements, enters the Russian market — Cegid, a French manufacturer of Yourcegid Retail Y2 software for the company activity management within the specialized retail segment, having a vast expertise in this field.
Characteristics that differ the system from multiple competitors:
The above-mentioned functionality of Yourcegid Retail Y2 system allow specialized retail companies to maximally meet their requirements and to efficiently automatize their activity by simplifying the implementation of the foregoing crisis response measures.
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