]Big-box retailers such as Target & Walmart have already recognized the growing influence of e & m-commerce, and are offering online store formats. Costco, whose advantage lies in bulk-sales, also announced greater focus and online with plans for mobile applications and improvement to Costco.com.
It is becoming increasingly clear that the firms that continue to invest in the growing online sales channel are likely to emerge as future leaders. Brick n Mortar retailers such as Target and Walmart are investing in creating an omni-channel environment. The model embraces IT while leveraging advantages of physical locations. Companies that are not investing as much as the leaders in online channels (for example, Kmart) are likely to lose out in the long run.
Retail industry is centered on commoditized goods and is hence extremely dependent on price/cost advantages. Investments in IT technologies that enable efficient inventory management. Retail industry is one of the largest users of big data. Big data is being used to analyze process improvements, study logistics, optimize inventory, improve merchandising, and most importantly, study in-store and online consumer behavior to forecast future needs.
IT technologies enabling supply-chain efficiencies is going to play a greater role in achieving cost leadership. Companies such as Walmart, which are able to use IT to track and manage the purchase, storage and distribution of merchandise can offer lower prices which is a key success factor in the industry. Amazon and Walmart, who continually invest in technology are likely to remain competitive on price, and will be able to offer services which make goods available to consumers in efficient ways, are likely to emerge as winners. For instance, Walmart uses RFID and cross-docking to streamline its supply chain and cut excess inventory. Retailers who don’t invest in operational efficiencies are not going to be able to compete on price, and are increasingly likely to lose out in the long run.
Customer service and experience
Retailers have traditionally differentiated themselves through customer service and enhanced customer experience. Innovations in inventory management not only ensure cost leadership, but also mean that products which consumers seek are available on shelves. Using predictive analytics, and efficient re-ordering retailers are able to ensure the right goods are available at the right time on shelves. For instance, by using RFID, Walmart was able to reduce out-of-stock occurrences by almost one-third ensuring greater customer satisfaction for in-store customers.
Advancements in point-of-sales technologies is an important aspect in enhancing customer experience. Innovations have enabled faster billing and shorter lines, adding to the in-store shopping experience. Advancements in POS such as user friendly self-checkout terminals have already had an positive impact on customer experience by helping retailers keep more...