Following a period of constrained sales growth, we look at what retailers can do to succeed in 2019.
Retail continues to be subject to disruption. It is also subject to the whims of changing consumer preferences and buying behavior fueled by the changes in technology. In short, it is difficult to recall a period with more change in such a short timeframe.
We look at the three fundamental ways retailers can set themselves up for success in 2019.
Focus on growing market share
In a low growth environment, maintaining or growing sales becomes a game of market share.
To attract consumers and entice them to spend money with you rather than your competitor, a clear value proposition and point of differentiation that resonates with the customer base is essential. We expect the performance gap between the top and bottom of each category to continue to widen in 2019.
Characteristics of winners: operators that have identified and invest in that point of differentiation will outperform their competition.
Rethink the model
Online retail sales have continued to outpace bricks and mortar retail sales, with a substantial proportion of sales growth in many categories coming from online and, to some extent, cannibalising bricks and mortar sales.
This shift towards online has been a fundamental change in the retail landscape. It has provided retailers with wider reach, but also more competition, changing the optimal store footprint and retail network. It has also altered the way customers interact with brands, both from an experience and service point of view, given their access to vast information on products and pricing.
Characteristics of winners: operators that can use bricks and mortar and online offerings to complement each other as part of a seamless experience with a focus on convenience will be best placed to achieve growth.