The second week of January saw the National Retail Federation’s annual “Big Show” take place in New York City. The event hosts thousands of retail insiders as they wrestle with the many big questions surrounding the new, increasingly digitized, shopping experience
According to organizers of the event, for the first time in history the balance of power has shifted away from sellers to consumers, who are more socially connected, mobile and well informed than ever before.
Retail sales rose nearly 3 percent in the final two months of 2013 but actual store visits declined nearly 15 percent, according to the Associated Press. This means consumers are researching items online before heading to brick and mortar stores.
In December, online orders jumped 63 percent on December 23 as retailers dropped prices below their in-store Black Friday bargains. Online sales, in total, rose 10 percent in November and December, to $46.5 billion.
Another amazing statistic for retailers and their packaging partners to consider is that 20 percent of holiday season sales occurred on mobile devices. As consumers become increasingly less concerned with where they shop, retailers need to be ever more savvy in the ways in which they reach those shoppers.
John Foley of Oracle Retail believes retailers have to reevaluate the fundamentals of their businesses and how they interact with customers. First of all, seeing as retailers have been collecting massive amounts of data for years, Foley says it’s time to use that data to optimize operations,refine pricing, and anticipate demand. Converters that can add their own analytics will, naturally, be highly sought after. Foley also encourages retailers to consider that mobility is more than just smartphones and points to stores in which employees are equipped with tablets that have point-of-sale capabilities.
In addition, Foley urges retailers to add complete transparency to the consumer in terms of inventory and fulfillment. “It’s one thing to know that you have a pallet of product XYZ in a warehouse somewhere; it’s much better to be able to tell your customer that XYZ is on its way and scheduled to arrive at a nearby store at 8 a.m. tomorrow,” he said.
Naturally, the packaging companies and CPGs that feed into the supply chain of the retailers will play a vital role in being able to make this idea viable. Foley stresses several other key points, including the ways in which customer relations will change, how integration of data across the entire supply chain needs to become more seamless and how retailers can combat “showrooming”, the practice of consumers browsing in brick and mortar stores and then making lower-cost purchases online.
Retail changes, no doubt, are coming with increasing speed and intensity and the only way retailers stand a chance of keeping pace is to have CPG and package converting companies that are true partners and are knowledgeable about all aspects of this changing landscape.
