New report by the Economist Intelligence Unit finds legacy IT systems unable to keep with consumer expectations
New report by the Economist Intelligence Unit finds legacy IT systems unable to keep with consumer expectations
Only 3% of retailers are convinced that they are keeping pace with consumer demands for multi-channel retailing, according to a new report from the Economist Intelligence Unit, 'The I Factor: How consumer demand is driving retail innovation'. Many retailers are still grappling with legacy systems, hamstringing efforts to evolve as rapidly as the market.
“Customers are coming into stores with 21st-century kit, the cloud in a handheld device, and retailers are using till systems from the 1980s,” said Ian Cheshire, chief executive of Kingfisher, owner of B&Q and Castorama, who was interviewed for the report. “The arms race has really switched to the consumers now.”
The report was based on a survey of over 300 retailers from the UK, France, Germany, Italy and Russia, conducted by the Economist Intelligence Unit, on behalf of MasterCard. The survey results were supplemented with eight in-depth interviews with senior executives from leading retailers to investigate how retailers are adapting to the world of multichannel retailing.
Ill-prepared for disruptive consumer technology
Nearly half (49%) of larger retailers admitted that they are hostages to the next big innovation by stating that some unknown technology will be the most important driver behind consumer expectations. However, just one-third of larger retailers actually said they were investing heavily in technology, compared to almost half (47%) of smaller retailers.
Brick-and-mortar stores are expected to be a less important channel through which companies interact with their customers by 2020 (dropping from 53% at present to 27% in 2020), compared with other channels such as mobile devices (rising from 32% to 43% in the period).
However, just one-quarter of respondents expected to be able to reduce their High Street presence and over half (55%) said that they were turning their retail outlets into “showrooms,” recognising that, although most purchasing will be conducted online in the future, customers still want to touch and try out products before buying.
Personalisation key to meeting customer demands
Some 37% of those surveyed said they were conducting more research into customer expectations and 38% were increasing their use of customer segmentation, while 39% of retailers were delivering personalised shopping experiences and 32% said that they are using social media to meet empowered consumers’ expectations.
As to what was the biggest factor expected to shape customer expectations by 2020, the rise of the middle classes in emerging markets (36%) emerged as a front runner, even beating the rising prevalence of shoppers armed with smartphones and tablet computers (30%).
