Customer behavior is changing. Retail automation proves a must
So, to remain competitive, the retail business must adapt to rapid changes in customer behavior and market trends by embracing retail automation.
Higher inflation leads to customer behavior changes, but there is hope
In those times of economic uncertainty, European consumers are concerned about rising prices and are pulling back on spending, shows a McKinsey survey. Inflation-wary consumers will prefer to shop at discount stores. To counter this, retailers must lower their costs to offer discounts, encouraging consumers to buy.
Automation can help mitigate those effects. Including assortment planning in the business process will allow organizations to use the obtained data to determine the best product assortment. This tool can reduce the need for costly overstocking or rush orders, ultimately leading to lower inventory carrying costs and better use of capital.
Many retail chains will also invest in automating their backend processes, reducing costs. By March 2023, Australian department store chain Myer will deploy 200 autonomous mobile robots to process seven out of ten online orders. Japan’s Aeon will collaborate with British retailer Ocado to build an automated warehouse in Japan by 2023 to manage stocks and basket goods for online deliveries.
In retail automation, there is a solution for promotion management and optimization. If retailers want to build trust again, they must manage a campaign that ensures that promotions are precisely what their customers need and be consistent. Using promotion management and omnichannel optimization pricing, a vital feature of the SAP Customer Activity Repository applications bundle could make the difference in ensuring the loyalty of a client or not.
The business can create a what-if simulation to predict financial performance with this solution. Factoring in the clients’ pain points is crucial in maintaining the livelihoods of campaigns and returning the investment needed for a profitable bottom line.
Consumer discount expectations don’t match reality. All surveyed consumers would like to benefit from discounts 11% higher on average than the real deals available. Retailers can reduce costs by optimizing their promotional activities. By using systems that automatically analyze consumer behavior and preference data, retailers can tailor their promotions to better align with customer needs and desires, ultimately leading to more effective campaigns and lower costs associated with wasted advertising spend.
Online shopping is on the rise
As technology skepticism lowers, the number of online purchases will continue to rise, as it is as convenient for the consumer as it might be for the retailer.
Online retail lowers costs on aspects that physical stores can’t afford to cut out. The need to keep an eye on replenishment planning rises. With assortment planning and replenishment planning, the best part of online retailing is that tools can automate some crucial aspects, like:
- Reducing waste while responding promptly to changes in demand (with the forecast capabilities of those solutions)
- Information-driven planning aids businesses in considering real-world requirements and limitations when ranking products according to chosen KPIs
- Real-time inventory visibility and on-shelf availability
Sustainability initiatives prove necessary for customers and governments
A study by the Economist Intelligence shows that in the coming years, European countries such as Spain, Italy, and the Netherlands are enforcing plastic bans and taxes, with retailers needing alternative packaging options. Sustainability is becoming a key focus in the fashion industry, with companies implementing changes to their packaging and material use. Regulators are also pushing for better consumer protection by introducing new privacy and data regulations in several countries. In the face of these challenges, retailers must consider automation to improve efficiency and reduce costs while also meeting the changing demands of consumers.
Waste is a big challenge for retailers. Reduce inventory, markdowns, and waste with consistent planning that spans customer-centric assortments to intelligent allocation and product replenishment.
Allocation management is the solution retailers want to take advantage of. The feature enables fully automated in-season replenishment based on previously gathered data. It allocates it to different stores/storages based on the promotional forecast, store inventory, and capacity.
A store can limit the amount of waste produced by carefully planning the inventory and promotions. Minimizing waste becomes easy with all the features offered in an application bundle like SAP Customer Activity Repository.
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