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Smart Investments In 2015

VP Mindtree head shotAs retailers map out their spending strategy for the rest of 2015, a big question is: What have we learned over the last 12 months that can help them tailor their budget investments?

Midway through 2014, Mindtree conducted a survey of 2,400 shoppers in the U.S., to try to better understand what’s driving their continued disruption of the retail world. We discovered that 60% of U.S. shoppers saying they combine online and in-store experiences in whatever way is most convenient or efficient for them. This is the “phy-gital shopper” — our term for the new wave of connected consumers who leverage the power of smart devices and the internet to make their shopping experiences easier, cheaper, more flexible and tailored to their individual needs.

But if phy-gital is the new norm, how should retailers respond to win the hearts and minds of these shoppers? There are multiple ways to do that, of course, and no one-size-fits-all approach. But following are a few of the key areas retailers should focus on throughout 2015.

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Smart Promotions…

It’s no secret to retailers that the rise of the phy-gital shopper has corresponded with a decline in the effectiveness and influence of promotions on sales and consumer behavior. Shoppers are tuning out the “noise” from the flood of promotions that fill their screens, mailboxes and inboxes. Instead, they want fewer promotions but deeper cuts, with 25% as the minimum suggested discount. With a better discounting regime and more discipline, retailers can pave the way for improved shopper satisfaction.

…Driven by Data

If part of the key is delivering fewer promotions, how do you ensure that the ones that do get sent are based on true shopper needs? The answer lies in technology and data to deliver strategies such as context-aware offers to individual shoppers in retail stores. For instance: A mother enters the produce section of a supermarket and gets an alert on her phone — a promotional discount for fruit that comes with recipe ideas for fruit snacks that are fun and appealing to kids. This kind of scenario is fast becoming a reality as stores deploy indoor positioning system technology, which is made even more powerful when retailers can identify shoppers personally and make recommendations based on data of their past purchases or stated interests.

One big hurdle in this scenario is getting the shopper to agree to share his or her personal information and be tracked. But the good news on that front is that in our survey, 90% of shoppers said they are willing to actively share personal information in return for a better shopping experience.

The New Three Cs

The term “three Cs” is usually applied to e-Commerce, meaning content, community and commerce. But we see another three Cs for the CPGs that are upping their game to get closer to shoppers.

  • Channel Management — Many CPGs feel it’s just not feasible to sell direct-to-consumer. But we are seeing some stand out from the pack by employing a strong channel management approach, or displaying a dedication to the importance of channel management.

  • Consumer Strategies (in particular direct-to-consumer strategies) — For CPGs with a viable opportunity to sell direct-to-consumer we noticed two distinct trends, indicating that one size may not fit all. Some are creating their own platforms for selling directly to consumers, and depending on volume they have either brought them in-house or are using SaaS platforms. Meanwhile, other companies are using established marketplaces (such as Amazon) to drive e-commerce in a way that tends to be less expensive, without the marketing costs associated with raising consumer awareness about native platforms.

  • Content-Led Marketing — Creative, engaging content as marketing is no longer just the domain of fashion retail. Companies are using content to engage, inspire or educate consumers before prompting or leading them to buy, and it’s resulting in a lot of commerce.

All of the above are just a few examples of many that may loom large this year, but the point is that the answers are out there, and so is the technology to fulfill these needs. The retailers that want to lead the pack will make a point of going into the future based on what we’re learning now.


 

Radha R has more than 20 years of IT industry expertise with deep understanding of the Consumer Product Goods (CPG), Manufacturing, Retail and Travel & Transportation Industry. As the vertical head, Radha has established long-term strategic relationships with some of Mindtree’s largest global clients. She has played a decisive role in laying out the strategic roadmap to transform Mindtree and make it ready for 2020.

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