Store 3.0™: Overview
Planning tomorrow’s store today
The Only Constant is Change
One hundred and fifty years ago, running a physical store was the only way a retailer could serve customers. Then came catalogues, traveling salesmen, and dinner-time phone calls. Today we can buy just about anything from just about anywhere at just about any time due to technological advances. The store itself has become just one part of a much more complex and challenging relationship between retailer and consumer. As such, the impact of technology on the store’s role and how it should operate are significant and far-reaching.
As technology – especially consumer technology – revolutionizes retail, retailers will be forced to adapt and rethink how to meet the shifting needs of a demanding, fickle, and on-the-go consumer. Over the next three, five, or even 10 years, how will the store itself need to evolve? What must be done to ensure it will continue to attract, engage, and serve the customer?
Deloitte’s Store 3.0™ provides an innovative, forward-looking approach designed specifically to address these issues by understanding today’s myriad internal and external pressures and identifying tomorrow’s technological opportunities for operational excellence and competitive differentiation. Store 3.0™ provides a holistic framework for designing an executable strategy that helps create a high-quality customer experience, enhanced consumer loyalty, and advanced operational effectiveness.
New Demands and Expectations Drive New Requirements in the Store
As Deloitte considers the future of retail, we believe that technological advancements across stores and channels will only continue to hasten significant change. Customers will continue to expect more, and internal stakeholders – merchandising, marketing, and advertising, to name a few – will demand increased agility and flexibility (not to mention real-time data and analytics) from store operations.
Yesterday, customers would often go online from home to research product information, competitive pricing, and user reviews before purchasing in the store. Today, we see growing use of mobile devices from within the store to do these same things.
As an example, customers today have the capability to use their smartphone to take a picture of a bar code to get product information and competitive pricing. Retailers and sales associates must be equipped with at least the same technology and access to information in order to continue to provide value, assistance, and competitive differentiation.
The changing role of the store – evolving to Store 3.0™
Tomorrow’s customers will demand a customer experience that is uniquely relevant to them. They will expect retailers to deliver on their brand promise, regardless of channel. They will be drawn to value, not to a particular retailer; and as demands on personal time keep increasing, customers will only spend time (and money!) where they find value. Each shopping experience will matter more.
The free flow of real-time information will reshape the way sales associates and customers interact. Whether the retailer has a relationship-centered or transactional-centered customer service model, this change will impact nearly every aspect of how a store operates. Some of these changes are already occurring as demonstrated by Exhibit 1.
Change will be constant. Technology will continue to evolve and impact consumers in ways we cannot even imagine today. Retailers will need to operate with this end goal in mind: deliver the right product and level of service to every customer at every point of interaction. Additionally, we expect that:
- Technology, and its infrastructure, will serve multiple purposes. An example of this is traditional loss prevention in-store cameras which will also monitor all store activity, provide real-time detailed analytics, manage queues and traffic flow, appropriately pair-up customers with associates, track in-store execution, and monitor in-stock status
- The relevant details of the customer’s history and profile will be dynamically delivered to the associate at every point of interaction to deliver a consistently excellent customer experience
- Mass customization will allow a global retailer to provide a local experience and will flexibly leverage merchandise mix, pricing, and in-store communications and information delivery
- Retailers will edit their store portfolio and reduce store counts
- Sales growth will come from other channels and / or international expansion
A Compass and a Map
Deloitte’s Store 3.0™ provides an innovative, holistic approach to help retailers develop and realize a future-store vision. It will also assist retailers in executing a roadmap to drive customer experience, competitive differentiation, and advanced operational effectiveness.
- The Store 3.0™ approach begins with a solid understanding of the profile of the targeted future customer and the experience they will expect from the retailer
- We then conduct a comprehensive analysis of a retailer’s current processes and capabilities, and work across internal stakeholder groups to identify the differences between the current state and targeted future vision of the store
- Relying on our in-depth understanding of retail trends and evolving technologies, we qualify the many unique factors that can shape the target customer-retailer relationship
- To realize this customer-centric vision, we then develop with the retailer a holistic strategy that includes store operations and services, retail talent and workforce management, in-store systems, and integration across selling channels
- Leveraging our deep industry experience and insight, and integrating key supporting technologies, the Store 3.0™ team will deliver an executable roadmap focused on return-on-investment, flexibility, and sustainability. We’ll also identify “quick-hit” opportunities that consider targeted selling behaviors, in-store service capabilities, and pricing and promotional capabilities
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