Due to changes in social conditions and the evolution of technology, the distribution and retail industries are now facing a major turning point. Business models need to be fundamentally reconsidered in line with the external environment, and industry-leading players are being forced to respond to these changes. Therefore, in this article, we will explain the promotion of DX in the distribution and retail industries and the expansion of customer contact points, which is an urgent task.
Table of contents
- What is DX promotion in the distribution and retail industry?
- Issues in the distribution and retail industry
- Urgent need to expand contact points with customers in the distribution and retail industries
- Expand customer contact points with SAVAWAY solutions
- summary
What is DX promotion in the distribution and retail industry?
First, I would like to explain the industry-side efforts required to promote DX in the distribution and retail industries from three points.
Response to changing consumer needs
In recent years, it has become difficult for companies to maintain their competitive advantage with existing business models alone. This is due to changes in consumer needs. Specifically, the “how to buy products” has changed significantly.
Traditionally, the primary motivation for consumers to purchase products has been product ownership. However, in recent years, consumers do not necessarily want to own products.
For example, with the advent of subscription-type services made possible by the development of IT, the consumption behavior of “using music rather than owning it” has become established among the younger generation. In addition, the sharing economy, in which individuals share products and services, is steadily expanding.
These changes in consumer needs are spreading across a variety of industries, and in the future, the consumption style of “try first and then buy (= own) if you like it” will spread. In the distribution and retail industries, prompt responses to these consumer needs are required.
Deployment to EC sites and OMO strategies
In order for the distribution and retail industries to survive, it is imperative to grasp consumer needs more accurately and provide highly convenient services for consumers. The key to its success is the development of EC sites and OMO strategies .
Demand for e-commerce sites is on the rise due to rapid digitalization and the spread of the new coronavirus. On the other hand, there is a deep-rooted need to “check the actual product at the store before purchasing”, and there is now a consumer behavior of “checking at the store and ordering online on the spot to save the trouble of taking it home”. It’s not uncommon.
In the distribution and retail industry, it is necessary to improve EC sites and devise marketing methods to meet these diversifying and complex consumer needs. OMO is attracting attention as a new marketing method . OMO is an abbreviation of “Online Merges with Offline”, a marketing method that combines online and offline to increase synergy. China’s Alibaba Group is already actively promoting OMO initiatives under the concept of “new retail.”
When implementing OMO, we will build a system that unifies and links smartphone apps, e-commerce sites, and offline data. Through these linkages, “display coupon information of your favorite brands on the EC site to promote store visits” and “display recommended products on the EC site that the target may like based on purchase data at the store”. etc. will be possible.
In order for the distribution and retail industries to conduct stable business in the future, it is essential to promote DX, and it is also important to expand online customer contact points and invest in digital marketing.
Cloud migration supports remote work
It is also important to promote the migration to the cloud and streamline internal operations. For example, in the retail industry, employees with various forms of employment work, so attendance management tends to be more troublesome than in other industries. Inventory management also requires considerable effort. Improving productivity by migrating these operations to the cloud is one of the important initiatives for promoting DX.
In addition, cloud migration can also support remote work for employees. For example, if a manual for customer service and customer service etiquette is made into a video and distributed online, employees who are working remotely can view it and study on their own. In general, the cloud has strong security measures in place, so if you introduce tools from highly reliable vendors, you can also achieve enhanced security.
Issues in the distribution and retail industry
Now that we have understood the concept of promoting DX in the distribution and retail industries, we will now explain the two current issues facing the industry.
In times when things are hard to sell
In the recent distribution and retail industry, it is becoming difficult to sell things. This is mainly due to the effects of prolonged deflation that have dampened household budgets and at the same time intensified price competition among firms.
With fast fashion gaining citizenship and cheap and good things flooding the streets, many consumers have become cautious about purchasing expensive items. In addition, due to the spread of smartphones and the impact of the new coronavirus, offline purchasing behavior is becoming more passive. In addition, Japan has its own concerns such as declining birthrate, aging population, and declining population.
In an era where things cannot be sold like this, it is important to “present added value other than price and quality” in order to be chosen by consumers. Elements such as special feeling and originality that cannot be replaced by other products will be emphasized.
Change in customer journey
The customer journey has also changed due to the increase in home time due to the refraining from going out due to the new coronavirus. The convenience of e-commerce sites is once again attracting attention, and the number of consumers who complete purchase awareness, information gathering, comparison studies, and purchases online is growing.
Specifically, as in the past, behaviors such as “going to physical stores to recognize the brand,” “collecting information through mass media,” “recommended by customer service and fostering desire to purchase,” and “purchasing at physical stores.” has decreased. Instead, “collect information on official corporate apps and SNS”, “live commerce on SNS makes me want products”, and “choose the most convenient purchase place, payment method, and pick-up place based on EC sites”. ” behavior is increasing.
The digitization of consumer purchasing behavior is not necessarily a headwind for companies. This is because companies can create business opportunities by quickly responding to digital needs.
Urgent need to expand contact points with customers in the distribution and retail industries
In the distribution and retail industries, it is an urgent task to expand customer contact points in line with changes in customer journeys and expand business widely. In particular, efforts to increase contact points with consumers online are required. For example, there are ways to increase online sales channels, start your own SNS and smartphone apps, etc.
It is also very important to develop an OMO strategy and improve the user experience through marketing methods that seamlessly integrate online and offline.
Expand customer contact points with SAVAWAY solutions
If you want to expand your customer contact points and expand your business, but you don’t have enough resources or know-how in-house, we recommend introducing the cloud-based EC platform service “TEMPOCLOUD” provided by SAVAWAY Co., Ltd. This solution is a tool that simplifies the construction of multiple sales channels and supports the expansion of customer contact points.
Specifically, you can build and operate multiple EC sites on a single screen, and streamline the management of your EC sites. For example, in the case of apparel, it is possible to build an EC site that can appeal the image of each brand, or operate an EC site for each physical store. In this way, you will be able to better meet the needs of your target audience.
In addition, it is also possible to build and operate EC sites in cooperation with partner companies. Appropriate division of roles can also reduce the operational burden and cost increases associated with business expansion.
summary
In order for the distribution and retail industries to continue growing in the future, there is an urgent need to promote digitalization in order to respond to changing consumer needs and consumption behavior. Promoting digitization will increase contact points with customers and dramatically improve the value of services that can be provided. SAVAWAY’s “TEMPOCLOUD” can also solve the resource and cost issues required for digitization.
