London – January 14 , 2014 – Global Supply Chain Commerce Solutions provider, Manhattan Associates (NASDAQ: MANH), has released its predictions for the retail industry in 2014.
As the next generation of shopper becomes ever more demanding, going into 2014, retailers must place the customer experience at the forefront of their retail strategy. And, whilst striving for a high quality experience, they mustn’t lose sight of profitability.
“We’re still seeing some high profile casualties on the high street, including most recently Blockbuster and Barratts. Retailers are in an all-out battle for sales but this should not blind them from ensuring that they are offering their customers the highest level of customer service, whilst ensuring they do so profitably,” said Craig Sears-Black, UK managing director at Manhattan Associates. “To survive and thrive in 2014, retailers need to make their existing assets work harder whilst continually innovating on their service offering. Those that don’t will lose out through poor loyalty and lower sales,” he continued
Manhattan Associates has identified seven trends that are likely to influence the UK retail scene in 2014:
1. Personal and Profitable
One of the first steps retailers can take and one Manhattan Associates expects to see more of in 2014, is gaining enterprise-wide visibility of inventory and customer transactions via the deployment of centralised order management systems. Embracing such technology will allow retailers to know exactly where their inventory is, to whom they can make it available and when it will get there, regardless of which channel is calling for it. This in turn will allow retailers to offer the best level of service to their customers.
2. Faster and More Flexible Fulfilment
Customers want their purchases – and they want them now. Too few retailers are currently offering customers next day delivery, two-hour click-and-collect or ship-from-store services. Recent research found that only 13 per cent of UK retailers offer their customers next day delivery, and only 11 per cent currently ship from store.
And what can retailers do when next day delivery and click-and-collect are no longer fast enough for their customers? Ebay’s acquisition of Shutl comes as it looks to offer UK customers one-hour delivery – and the fulfilment battle won’t stop there. Shutl’s current delivery record is 14 minutes and 58 seconds – indicating that it believes shoppers will demand this level of speed in the near future.
For this to be possible, retailers need to have a 360-view of their channels, know exactly where their stock is and be able to see where the demand is coming from. This will allow them to manage inventory as a single, centralised pool and get stock to where it is needed quickly and efficiently. It will also mean they can offer a seamless shopping experience and increase the likelihood of them earning customers’ loyalty. At present, 37 per cent of UK retailers still treat their individual retail channels separately, often making it time-consuming and costly to locate inventory and fulfil orders. Omni-channel retailers with this 360-degree insight into their inventory and customers will seamlessly be able to view product availability across channels, and dispatch and fulfil orders both quickly and profitably. Shoppers do not want to wait whilst calls are made to neighbouring stores in a bid to source the item. This approach loses sales and customers in today’s fast-paced retail world.
3. Greater Supply Chain Control
The global horse meat scandal in early 2013 highlighted one of the biggest issues within the food industry - sourcing and traceability. In February 2013, a number of UK retailers were found to be selling products that included unexplained horse DNA.
As a result of globalisation, products are now crossing more international boundaries than ever before as retailers seek to cut costs even further. This means supply chains are getting longer and more difficult to manage. To avoid a repetition of the horse meat scandal, retailers need to have accurate and actionable data across the entire supply chain. This is in addition to ensuring that sufficient testing has been done of products before they are shipped, especially in the food industry. Following the intensity of this year’s scandal and the resulting fall-out, this is something retailers will be taking a lot more seriously going forward.
4. Social Shopping
Social media has been having an impact on the retail sector for some time. A key example is the ‘Kate effect’. When the Duchess of Cambridge wears an outfit, it is posted over social media networks and instantly sells out online. Retailers who effectively monitor their online channels can give themselves a big head start and maximise their sales.
But the next development of this is likely to be retailers using social channels to take customer orders. Few larger retailers have capitalised on the opportunity of selling directly to their social channel audiences. Engagement has so far been driven by photos or discount vouchers rather than direct orders – something we are likely to see change this year as retailers become keener than ever to differentiate themselves from competitors. Those retailers that will succeed in this difficult market are those that see social media as another retail channel.
5. Incentives and Rewards to Shape Fulfilment
Continuing on the theme of profitable selling, incentives and rewards will continue to be deployed by retailers to boost sales in 2014. Omni-channel retailers will also be using incentives and rewards to influence how consumers take delivery of their goods.
Consumers who are charged for home delivery of their purchases are now considering collecting the purchased item(s) from a nearby collection point or store. Thereby both saving money, and most probably, receiving the goods in a shorter timeframe. This helps the consumer by offering a greater choice of fulfilment options, but also makes the fulfilment of that specific order more profitable for the retailer.
6. Hyper Targeting to Change Buyer Behaviour
Data analytics in the retail sector is now so advanced that customer transactions, online conversations and shopping habits can now all be absorbed by retailers in real-time, so brands can understand better how to service their customers.
Shoppers crave a personal service, and the digital world makes it much easier for retailers to track shoppers’ buying patterns and preferences. Frequency of online visits, transactional spend amount, time period spent in store and preferred delivery method can all be tracked. Retailers need to use this information to their advantage to provide customers with a personalised service and to be able to reward them for their loyalty.
7. New Consumer Technologies Go Mainstream
Google Glass is likely to launch in early 2014 and its impact on the retail sector could be huge, particularly when it comes to mobile shopping. This new technology has the opportunity to improve the customer experience throughout the shopper’s journey – whether it be information on product availability, special offers or offering alternative or supplementary products.
So what impact is it likely to have? A recent survey by Venda found that 28 per cent of customers would use wearable technology like Google Glass to access in-store promotions. In addition to that, the research found that 45 per cent of 18-24 year olds would use the technology to search for available stock and products to purchase while in-store.
To facilitate this, retailers’ supply chains must be able to comprehend a seamless flow of data in real-time. The opportunities for retailers of implementing Google Glass are huge – however, they must have the back-office systems in place to fully capitalise on the opportunity. With more data from customers flowing through their channels than ever before, retailers’ supply chains need to be at the height of fitness and flexibility to maximise these opportunities.
About Manhattan Associates
Manhattan Associates, Inc. brings companies closer to their customers. We design, build and deliver market-leading Supply Chain Commerce Solutions that drive top-line growth by converging front-end sales with back-end supply chain execution and efficiency. Our software, platform technology and unmatched experience help our customers around the world adapt to the challenges of the omni-channel marketplace. For more information, please visit www.manh.co.uk.
 Manhattan Associates research conducted at Manhattan Associates UK Exchange event, October 2013
 Manhattan Associates research conducted at Retail Week Ecommerce Summit, October 2013