Publication

Innovation and sale of experiences, the challenges of the Retail sector

14 2019 March
INCAE Executive Education

In an increasingly connected world, it is estimated that by 2021 more than half of retail sales will be made online or they will be influenced by searches that start on virtual sites like Google and Amazon. 

Other revealing data was released at the annual National Retail Federation (NRF) forum: 72% of retailers plan to reinvent your supply chains to have real-time visibility enabled by automation, sensors, and analytics; 68% will invest in data tracking, collection and management; 55% will boost experiences within physical storeswhile about 50% of consumers will expect near perfect satisfaction.

The reality that is imposed as the preferred shopping experience is the mixed one. Therefore, the industry is strengthening the concept of omnichannel, to adapt to a customer eager to have the possibility to buy, where, when and how he wants. 

In regions like ours, the majority continue to go to a shopping center or physical stores to see, feel and try the products and services they plan to purchase, but the number of those who are seduced by the convenience and agility of digital platforms grows, while entrepreneurs recognize that designing new plans, incorporating more technology and having the ability to analyze and process data are the foundation of the next stage of retail: smart retail.

"The advancement of applications, immediate connection and increasingly accelerated lifestyles, coupled with the infrastructure of our cities and new ways of working, result in a consumer more expectant of innovation, ease and convenience. Their need goes beyond marketing campaigns, or the use of technology, and focuses on the demand for innovation, ”says Carlos Morales, senior manager of Consulting at EY Centroamérica.

Sell ​​experiences

Instead of the fear that it previously caused, e-commerce has come to be seen as a great opportunity to better serve customers, be closer to them and offer a different consumer experience.

“It's about making it easy for the customer, thanks to the connection of all the channels. The selling experience should focus on that path. There are more and more educated consumers who want to have everything at hand, with fast and efficient access. We are moving towards that north and Central America is not far behind, ”points out Mario Otero, an analyst at the strategic market research firm Euromonitor International.

Contrary to what happens in the United States and other industrialized countries, where large and iconic stores have gone bankrupt, retail trade continues to grow in Central America and the challenge is to seek improvements in formats, infrastructure and laws. This will allow foreign investors more flexibility to leave their border and opens the possibility for locals to create franchises of their brands. However, Otero classifies him as a still immature business.

“We are behind what has already happened in industrialized countries. We have to go through the same experiences to learn and adapt. Certainly the changes will come and perhaps the entire process of evolution will take less years due to globalization, but we will still be several steps behind, ”he says.

For Jorge Lizan, director of Lizan Retail Advisors, the secret is to understand that it is essentially a link business, that must be strengthened by offering unique moments, positive experiences and memories that promote loyalty.

“It is not about offering experiences for offering them. They must be authentic and real, They cannot be recreated or artificial, as customers would not accept them. At the moment, Central American consumers still want to go to shopping centers because they find not only a place of consumption, but also a place for social interaction, something that no Internet platform can replace ”, highlights the specialist.

However, his recommendation for retailers is to stay away from passive positions, since people tend to change tastes and habits and technology advances very quickly.

“They have to always be at the forefront of world trends and innovate. It is important that you understand your customers better. For this, it is essential to use information and market intelligence that allows them to respond to their requirements and those of the sector ”, he comments.

Morales adds that companies must focus on making shopping an experience full of micro-moments, where the consumer can live, discover, explore, compare, plan, evaluate and, finally, buy. Added to this is the challenge of balancing the mix between physical stores and e-commerce.

Excerpt from the article published by Summa magazine, number 295.
 

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