Artificial intelligence (AI) is driving more innovation in e-commerce, turning what was once an intriguing concept into a must-have competitive advantage. No longer just a tool for efficiency, AI is revolutionizing how retailers personalize shopping experiences, optimize product discovery, and drive customer engagement………Continue reading…..
By :Jack M. Germain
Source: Ecommerce Times
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Critics:
When discussing the impact of technology on shopping and retail, e-commerce is often the first thing that comes to mind for retailers. However, technologies such as big data, artificial intelligence, computer vision and the Internet of Things have used data to transform every part of the shopping experience, from browsing to checkout.
It is important for organizations to embrace digital disruption in order to gain a competitive advantage. When an industry experiences digital disruption, it typically signals that consumer needs are shifting. Retailers enhance their analytics process and make better informed decisions thanks to big data, artificial intelligence, computer vision, and the Internet of Things. The use of data by retailers is mostly evident in the following aspects, based on the above-mentioned new technologies:
- Enhance marketing by Personalizing customer experience
- Optimize supply chain management
- Adjust prices to maximize profits
Retail formats (also known as retail formulas) influence the consumer’s store choice and addresses the consumer’s expectations. At its most basic level, a retail format is a simple marketplace, that is; a location where goods and services are exchanged. In some parts of the world, the retail sector is still dominated by small family-run stores, but large retail chains are increasingly dominating the sector, because they can exert considerable buying power and pass on the savings in the form of lower prices.
Many of these large retail chains also produce their own private labels which compete alongside manufacturer brands. Considerable consolidation of retail stores has changed the retail landscape, transferring power away from wholesalers and into the hands of the large retail chains. In Britain and Europe, the retail sale of goods is designated as a service activity. The European Service Directive applies to all retail trade including periodic markets, street traders and peddlers.
Retail stores may be classified by the type of product carried. Softline retailers sell goods that are consumed after a single-use, or have a limited life (typically under three years) in they are normally consumed. Soft goods include clothing, other fabrics, footwear, toiletries, cosmetics, medicines and stationery. Grocery stores, including supermarkets and hypermarkets, along with convenience stores carry a mix of food products and consumable household items such as detergents, cleansers, personal hygiene products.
Retailers selling consumer durables are sometimes known as hardline retailers – automobiles, appliances, electronics, furniture, sporting goods, lumber, etc., and parts for them. Specialist retailers operate in many industries such as the arts e.g. green grocers, contemporary art galleries, bookstores, handicrafts, musical instruments, gift shops. To achieve and maintain a foothold in an existing market, a prospective retail establishment must overcome the following hurdles:
regulatory barriers including:
restrictions on real-estate purchases, especially as imposed by local governments and against “big-box” chain retailers, restrictions on foreign investment in retailers, in terms of both absolute amount of financing provided and percentage share of voting stock (e.g. common stock) purchased, unfavorable taxation structures, especially those designed to penalize or keep out “big box” retailers .
Absence of developed supply-chain and integrated IT management, high competitiveness among existing market participants and resulting low profit margins, caused in part by: constant advances in product design resulting in constant threat of product obsolescence and price declines for existing inventory, partially due to loss in business: lack of work-force, often including management, that is properly educated and trained.
Lack of educational infrastructure enabling prospective market entrants to respond to the above challenges, direct e-tailing (for example, through the Internet) and direct delivery to consumers from manufacturers and suppliers, cutting out any retail middle man. At the conclusion of the retail analysis, retail marketers should have a clear idea of which groups of customers are to be the target of marketing activities.
Not all elements are, however, equal, often with demographics, shopping motivations, and spending directing consumer activities. Retail research studies suggest that there is a strong relationship between a store’s positioning and the socio-economic status of customers. In addition, the retail strategy, including service quality, has a significant and positive association with customer loyalty.
A marketing strategy effectively outlines all key aspects of firms’ targeted audience, demographics, preferences. In a highly competitive market, the retail strategy sets up long-term sustainability. It focuses on customer relationships, stressing the importance of added value, customer satisfaction and highlights how the store’s market positioning appeals to targeted groups of customers.
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