Salman Malik (centre), Brightpearl CEO
By Salman Malik, CEO of Brightpearl
The bleak reality for the retail sector in 2011 saw a rise in retail bankruptcy increase 11 per cent to 183, according Deloitte.
As stores struggled to survive, over 20,000 members of staff were made redundant and in turn sales slumped and confidence cowered. Now we are in our third month of 2012 and so far, it has been equally as challenging.
Initial signs for 2012 were positive with sales showing an increase by 1.3 per cent in January, however, the rise was still significantly down on previous years.
Cash-strapped shoppers kept their hands well away from their pockets and high street stores, such as La Senza and Blacks Leisure, went bust.
With retailers facing such an unpromising year and with every sale making the difference between sink or swim, adopting better long term strategies which utilises multiple customer touch points is the key to success.
A starting point for this strategy is linked to the rise of both internet and in particular mobile shopping, which grew from £700 million in 2010, to just under £3 billion in 2011.
Such explosive growth means that retailers can no longer ignore this as a valuable channel to generate sales. Plus a shift in customer expectations has demanded that online platforms perform and offer the same if not more than in store offerings.
This is a massive opportunity for retailers and since Britain is tipped to be the biggest market for mobile shopping in Europe in 2012 it makes online channels an area the retailer can no longer ignore.
The savvy shopper is much smarter and conducts hours of research before making a purchase. This has added another level of pressure as a retailer’s product both has to be online and competitively priced to be included in the mix.
Taking all of these factors into account a multichannel approach offers the most opportunity for interaction between the customer and retailer; which in turn can convert into a sale.
But for the retailer, trying to cover all the channels of buying to meet varying customer needs can be a huge and complex challenge to manage.
Retailers deal with several lines of stock and a diverse set of customers –which forces them to juggle multiple time intensive admin tasks. Doing so can take away valuable time that could be focused on other areas of their business – such as selling.
Striking the balance between offering a great multichannel service and being overloaded with admin can be a hard thing to get right.
Technology plays a pivotal role in allowing retailers to strike this balance. Not only can it help them to improve a customer experience but it also crucially simplifies their back-office.
Managing the back-office is a critical part of keeping the customer happy, as it avoids making stock mistakes that could frustrate customers and limit business opportunities.
What’s more the right piece of technology can allow a retailer to manage stock control, sales and accounting.
A stricter regulation of the accounting aspect of a business is crucial especially with the recent HMRC news that it will be targeting trading platforms like eBay and other e-marketplaces. There is no room for error where the taxman is concerned.
If they get it right an effective multichannel approach can improve visibility, expand sales channels and drive efficiency which could be the key factor to help retailers stay afloat in such a competitive climate.
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