Insight around the world

RICHARD GURNEY, GENERAL MANAGER FOR LATIN AMERICA, CRIMSON & CO

Supply chain operations in Brazil, which have felt the impact of the major political and economic turmoil in the country, could start to see ground-breaking improvements over the next few years. This is mostly thanks to internet retail giants such as Amazon [IRDX RAMZ] finally making it to the country.

We are seeing more multinational online retailers, such as Amazon, investing heavily into South America, driven by expectations to replicate the same successes as seen in the likes of the US, Canada and Europe. In turn, this has acted as a massive wake-up call for how Brazilian businesses manage their supply chain and logistics.

These expansion strategies amongst global internet retailers is forcing smaller firms to think smarter as to how they bring products to markets, which in turn is having a positive impact on Brazil’s economy. In practice, this accounts for not only how products and materials are moved throughout their business, but also helping firms to understand how an effective supply chain can contribute towards shaping the long-term focus and ultimately help contribute towards healthier profits.

The supply chain function within local businesses in Latin America is often treated as a cost analysis exercise. In crude terms, it is often looking at how to get products or materials from point A to point B, in the cheapest way possible. Amazon’s arrival has forced a change in this mind-set and has forced Brazilian businesses to take notice as to how larger ecommerce businesses conduct themselves.

Notably, we are starting to see organisation’s employ designated supply chain and operations teams to improve how products reach customers quicker and more efficiently. Additionally, we are also seeing greater investment into training and learning mechanisms to improve the quality of supply chain personnel. This has massively improved the competitive retail landscape within the region. Firms are now much leaner and agile to market changes and as more and more retailers come into the region we only expect this to improve further, as firms start to recognise the significant benefits which can be gleaned from a fully optimised supply chain.

CHRIS VINCENT, GLOBAL CEO, PRACTICOLOGY

Many businesses today are looking at their China strategy in isolation to the rest of the global portfolio. I’ve recently talked to several tier one UK retailers as well as a few global players and a clear trend is emerging. China is almost always treated as a distinct business and disconnected from other operations. The China teams rarely travel and are only visited by a few senior western managers. Also, in many cases the teams are almost wholly outsourced and this feels wrong.

China should be connected to the rest of your portfolio and if it is not then as a business strategist I am concerned and here are a few reasons why: China marketplaces are expanding ever westwards. Tmall [IRDX RTML] and JD.com [IRDX RJDS] are both aggressively targeting the rest of South East Asia (SEA) as well as Europe and other western markets. This is for two reasons: first to combat Amazon’s growing influence and second, to continue to grow their customer base as the China marketplace sales look to plateau in future. As the marketplaces expand outwards so will the innovation, brands and ways of shopping proliferate with them. For those businesses that understand these platforms and the culture this will be a key asset to exploit in future.

Innovation is happening at pace in China ecommerce today, but there is very little western understanding and knowledge of how the market works. As China continues to grow its influence over the region and globally through tourist dollars, brands and also culturally this information should be understood throughout the business, not just in the China team.

Having a very separate China team also doesn’t help your China business. The vast majority of resources in China have a very limited understanding of what good looks like outside China generally and sales and performance suffer as a result. A better understanding of your brand and ways of working outside China can only be a good thing. China feels a long way away from Europe but as its influence continues to spread any business that is forward thinking will only benefit.

EMMA HERROD, EDITOR, INTERNETRETAILING

Geographic differences around how consumers expect to interact with brands online are disappearing, according to research by Oracle. Its global study into consumer attitudes, discovered that generally consumer expectations and the experience that consumers want with a brand are very consistent on a global level. There are some small regional differences but the most surprising insight from the study was the consistency of response between geographic areas, explains Jeff Warren, VP, Solution Management, Oracle Retail.

More than 15,000 consumers across EMEA, North America, Latin America, Australia and China, were interviewed for the ‘Retail in 4 Dimensions: Understanding Consumer Behaviour in an Age of Relativity’ report.

The numbers reveal that 42% of respondents are shopping online and in store every week, 55% want to be able to reserve online for same day pick-up, 87% are happy to share their personal email in exchange for offers and 52% want personalised offers based on their account data held by the retailer.

From the findings, Oracle Research has identified three shopper profiles that consumers switch between depending on what they’re buying, how much time they have and the amount of money they want to spend. These shopper types, it says, are more than personas, they are mindsets.

The three profiles are:

  • The Nomad – a nimble shopper who is not loyal to a brand nor a channel and will examine multiple options for researching and locating products before making a purchase;
  • The Player uses technology to fuel and guide their shopping experience and look for brands that re-invent the customer journey;
  • The Dealer – the thrill of the win and discount drives their shopping behaviour.

And thus we all move between being a fully omnichannel consumer taking advantage of a mix of digital and physical engagement points; a savvy shopper looking for new, innovative and technology-driven retail experiences; and a price conscious hunter always searching for the greatest value for money.
It’s one thing talking to shoppers and gauging how they prefer to shop and interact with retailers but that knowledge and insight needs to be turned into action, so Oracle has translated its research into three key takeaways for retailers: know your customer better; achieve omnichannel excellence; create capacity for innovation.

More than half of consumers are willing to share their personal email (87%), purchase history (82%), personal mobile number (72%), online browsing history (67%), social media profile (62%), so retailers need to leverage information gained in one channel and use it in another. That starts with a customer engagement platform in the cloud, according to Warren. Information about the customer and the engagement can be made available to the marketing cloud and to the website, commerce platform, in store solution etc.

The research shows that enterprise discipline is required in order to achieve the omnichannel excellence called for by consumers: 82% of customers want to return online for free, 73% buy online and return to store and 48% believe that automatic replenishment would be important to their experience in the future. “It’s where the industry is heading,” says Warren, but a third of respondents still think it would be ‘creepy’ for supermarkets to ship grocery items based on purchase, social and environmental data. However, 40% think it would be ‘awesome’ if supermarkets use technology to ‘suggest’ a shopping list without automatically charging for it.

Along with the rise of personalisation and the Internet of Things, other trends highlighted by the study include:

  • Faster, smarter payments and self-service – 60% want mobile payment options in-store with millennials and pre-millennials recording a stronger preference.
  • Simplifying the returns process – 82% want the ability to return an online purchase with free shipping.
  • Opportunities for emerging technology – 48% of consumers want to use virtual reality at home to navigate a personalised in-store experience and receive home delivery and 48% would use virtual reality to prepare a curated wardrobe to be picked up in-store. Some 39% think robot assistance would be ‘creepy’ and the sentiment is shared across age groups. Millennials (42%) and families (43%) showed the greatest interest in delivery by driverless car or drone.

However, what makes the difference around the world is retailers’ ability to respond to these consumer expectations and that’s what varies on a regional basis according to Warren. The similarities in consumer sentiment across the globe can be a catalyst for change. Retailers can run their online operations with a high level, global view regionalising as necessary. A standardised platform ensures a consistent experience for the consumer wherever in the world they shop with the brand.
This standard platform – be it ecommerce or POS – also simplifies operations. This, is a necessary step towards what Warren concludes retailers must do, which is “free up capacity to best serve customers on their terms”.

Mentioned in this piece…

Amazon

Amazon

IRDX: RAMZ

Amazon is a market-leading eTailer with global reach and a broad array of product types. (more…)

Tmall

Tmall

IRDX: RTML

Tmall.com is a platform for local Chinese and international businesses to sell quality, brand name goods to consumers in mainland China, Hong Kong, Macau and Taiwan. (more…)

JD Sports

JD Sports

IRDX: RJDS

JD Sports is a sports-fashion retail company based in Bury, Greater Manchester, with shops throughout the United Kingdom and with four in Ireland. (more…)