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Logistics News

The Alpha Consumer

Julien Arnolda, MD of award winning reseller Alpha Tech advises on how to appeal to today’s consumer and why the loyalty scheme could soon be a thing of the past.

What are the driving trends in retail distribution currently?

In the recent past, two prominent generations have deeply influenced the retail distribution sector – the baby boomers and the millennials. As the baby-boomers have reached the post-retirement stage, certain trending marketing tactics, such as smartphone solutions and online distribution networks, are simply a poor way to market to this sector, although these are the marketing tactics employed in catering to Gen Y. There is an increase in social media retail distribution, and the points-for-purchases system is drawing into a close, as this method has reached its prime.

Improvement of order-fulfilment and a rapidly growing need to cater to the individual needs of the customer for a satisfying experience seems to be the latest trend, and it’s a trend that will see a greater rise when retailer competition grows.

How have these trends evolved over the last five years?

If you really think about it, in the last few years, social media shopping has grown exponentially. Five years ago, when online retail stores had recently discovered Instagram and Facebook as portals beyond just outreach, the points-for-purchase and customer reward systems was a great market-governing trend. If I walk into a store that will give me a reward for being loyal now, I wouldn’t quite care about it because the reward system is now a burdening investment. There are simply too many retailers who provide this outlet and this form of customer experience is simply too time-consuming and uncertain.

From asking customers to invest in an unforeseen reward, retail distribution networks are aiming to provide quick results –this means instant transfers, instant delivery, complete setups, and going almost entirely paper-less. This hasn’t helped the baby boomer’s segment quite as much as the arguably larger Generation Y section of consumer bases, but with user-friendly online portals, or retail chains that provide excellent customer service to walk-in consumers, the competition is forced to rely more on the order-fulfilment experience than the product consumption experience.

Furthermore, many retail chains and providers have been ousted for not engaging in enough CSR activities, or providing products that fail to meet cruelty-free or vegan-friendly requirements – things that were simply unimportant to retailers in the past. Today, the transparency of social media has forced retailers to keep their products and their customer service record clean, and work on training staff to provide the best possible experience in the hopes to retain consumers.

How do you see these trends developing to 2020?

Retailers today are still quite focused on making their price-points an integral part of their consumer experience. That will all change. By 2020, there will be such a large influx of budding product chains, market segments and retail outlets that consumers will begin to look beyond price, CSR and integrity as added bonuses to purchase, instead these will be seen as pre-requisites. The entire market will shift away from the tried and tested paradigm to requiring innovation and sustainability as deciding factors in purchase.

Human error is another deciding factor in customer loyalty, and innovation to eliminate middlemen would be another thing that would become integral to the market’s expectations. The baby boomers would now have grown to 75 years of age, and user-friendliness of smart solutions would have to increase greatly. Smart solutions will also become more commonplace, in lieu to the luxury status they currently claim. In one-to-one retail outlets, customer service efficiency would require heavy training and streamlining, and the research and development industry will see maximum growth.

What is the most significant infrastructure development to enhance your business capabilities in recent times?

I would have to say this particular requisite would depend from sector to sector. For example, the drugstore, healthcare and FMCG retail outlets would need to provide adequate catering to the baby boomer market segment, which would mean increasing the size of the outlet itself while significantly reducing the length of shelving to not be out of reach to the older market.

Carpeting, disability parking, even a separate area for senior citizens and the disabled is essential to the entire consumer experience for that sector. In the sector of wearables and electronics, there is a need for targeted mapping out of products similar to this sector. Like the supermarket layout with aisles and corresponding staff, all electronic stores in the recent times have invested in stacking and shelving according to product type, while keeping the main-floor mostly to hold cream products and new releases that will draw people in.

Electronic query input devices are a great investment, and it is not uncommon for electronics sector staff to be armed with a tablet to take down the customers’ details and locate products according to target needs. The aim of such infrastructure is to make it easy for persons to navigate through the area for self-service if needed, or to depend on customer-facing staff for help if required. For the client’s side of things, there is a need to provide logistics and warehousing simultaneously to keep a steady flow of products from the stock chain to the supply chain.

You recently won a distributor of the year award from your partner Jabra. What advice would you offer businesses to enhance their pitch when competing to become a retail distribution partner?

Having the right product mix for the brand makes a world of a difference when pitching to become a retail distribution partner. As retailers, the onus of brand marketing and sales depends on us, and though people assume the marketing mix begins and ends at the parent company, with no great contribution from the retail partner – this is hardly the truth. Everything from the packaging and labeling, local presence of the brand, the media reviews and the understanding of the brand is something that rests also in the strategy of the retail distribution partner, and we need to bear in mind the needs of the brand and the needs of the region to create the right pitch. The channel partners we offer and tailor-made pitches are key to win the trust of the brand.

Under your contract with Jabra, you provide logistics and warehouse support. Which other services should retail distribution partners be looking to expand into, in order to meet future needs of their clients?

Technical support and aftersales services to the purchase of our brand partners’ products is an important part of retail distribution management, as is increasing the visibility of the brand and putting it on the regional map. Merchandising goes hand-in-hand with logistics and warehousing support, and training of brand representatives is another important asset to provide to clients for the holistic retailer experience.