On the run up to Retail Recharged, Partner at PwC, Craig Skelton, shares PwC’s insights on the importance of innovation to retailers from its ‘Total Retail’ report.
Total Retail | Innovation – the new imperative
Retail is in revolution.
Everything about retail is changing – not just what people buy and where they buy it, but how retailers need to organise themselves internally to meet these new demands.
- 4 in 5 customers say their favourite store finds innovative ways to source new products
- 25% of millennials choose where they shop because the product range is unique
- 1 in 5 of customers globally have paid for goods using their mobile
Key trends: Out in the market
Competitive advantage in the 21st century is the capacity for continuous innovation, executed fast, and deployed nimbly. From new store layouts, to new channels, and new approaches to service and experience.
- There could be 50 billion connected devices by 2020
- 98% of customers use digital technology to shop
- 75% of Millennials use their mobile whilst shopping in store
Key trends: Inside the business
Innovation is also about what goes on inside the business – new ways of thinking and collaborative working that harnesses the creativity of the whole workforce, not just those with R&D in their job title.
That’s even more true in consumer-facing sectors like retail, where your own people can be your first and best source of new ideas and emerging trends.
- PwC Digital IQ leaders are 2x more likely to achieve rapid revenue and profit growth
- Investment outside of IT is increasing with 68% of spend coming from other departments
- 69% of companies have an enterprise-wide digital strategy
Three ways to win
1. Look at your products – what will it take to win in your market? Do you have the right portfolio now and do you need a new approach to innovation for the future?
2. You need innovation inside, as well as outside. How are you embracing new ways of working across your operations?
3. You need tools and technologies that allow you to engage with customers inside and outside the store, and create a genuinely connected retail environment
Steps in the right direction?
Retailers who are getting it right:
- Engaged in their environment e.g. McDonalds – Intelligent menus that change with the weather
- Robust in their environment e.g. Etsy – Promoting an entrepreneurial culture and integrated working, and responding fast to customer feedback
- Insight-driven in their product e.g. Starbucks – Building on growing digital sales and allowing customers to pre-order
- Collaborative in their product e.g. Thomas Cook/Samsung – Collaborating with Samsung to offer customers a virtual reality taster of their trip they can only get in-store
- Strategic in their operations e.g. Amazon Dash – Next-day delivery on a range of key consumer goods
Craig predominantly works in the Hospitality, Leisure and Retail sector and specialises in advising private and PE backed companies, helping them through their growth phase and towards exit. He has assisted companies through the IPO process on the UK AIM and Main markets He also has extensive experience of working with companies once they have listed either in the UK or US.
Craig is part of PwC London's Entrepreneur and Private Business Leadership team. He is also the assurance lead on PwC's Total Retail thought leadership (the future of retail).