As the department store channel shrinks, and more brands fight for less space, our opinion is that brands will need to be more creative, flexible, and diversified in their approaches.
Read Tompkins International’s newest white paper Retail 2017 Trend Report written by Nancy Marino, Senior Vice President, Tompkins International and Chief Development Officer, The MonarchFx Alliance. Marino’s paper explains as the department store channel shrinks, and more brands fight for less space, brands will need to be more creative, flexible, and diversified in their approaches.
Marino’s paper relieves the different strategies brands have to consider in order to retain and build their customer base in 2017 and beyond. The battle of the market place is set to continue. Retailers need to reach their customer base through multiple channels. Some of these channels include social media, brick-and-mortar, an online presence, pop-up locations, “runway to retail”, virtual reality shopping, retailtainment, wearable’s, and the use of robots.
In order to properly implement these new channels collaboration and internal alignment needs to take place. Economic, political, and environmental challenges combined with the growing complexity of global operations have made Integrated Business Planning (IBP) a top corporate priority. Indeed, the potential is tremendous in the most volatile business climates. This process aligns merchandising, sales, planning, R&D, operations, finance, and other functional areas of the organization, into a single line of sight, from plan to performance to profit.
Another key component is the change in grocery services. Online grocery is set to grow rapidly in the US and China in 2017 as the battle between major players becomes even fiercer, making 2017 the year of online grocery. Given its heritage of large grocery stores serving as convenient, one-stop destinations, the US is notably late to grocery eCommerce. The online channel now looks set for a boom, as average basket sizes are increasing. America’s offline market leaders, Walmart and Kroger, continue to expand their pickup service to new locations. AmazonFresh is fighting back by lowering the cost of its service and is set to launch drive-through pickup stores in 2017. Retailers such as Whole Foods Market, Target, and Publix are using or trialing Instacart’s delivery service. There will be increased competition in grocery.
The key retail theme for 2017 is supply chain visibility. Digitalization is gradually transforming the structure of supply chain management. Digitalization comes in different forms, and supply chain visibility is one of them. Supply chain visibility related to order processes, shipping, transportation, logistics, inventory, and risk management allowing all information to be readily available to all stakeholders, including clients. This is driven by collaboration across multi-tier, supply chain partners and is expected to be the fastest growing sector.
Tompkins International knows retailers today are confronted by a more complex and diverse business environment than at any other time. With more information at the hands of consumers, new ways they engage with products and brands and a more dynamic competitive landscape, traditional retail is going through a period that is more akin to a revolution than an evolution. The old guard of retailers will need to take drastic measures to remain relevant in this new retail order that is defined by information and technology.