Global retailers do not understand their customers or the role of their stores, according to a new report by Accenture Strategy.
Young shoppers think and act in a very different way to those of a previous generation, according to the study, which was based off interviews with 23 chief executive officers (CEOs) and senior executives at leading global fashion retailers. The full report will be released on April 27.
“When young shoppers say they want ‘fast delivery’ on their online orders, they don’t mean tomorrow — they mean today,” Dan Murphy, managing director, Kurt Salmon, part of Accenture Strategy, said.
As part of the study, Kurt Salmon also interviewed 2,000 UK consumers.
Describing the results as “totally fascinating,” Murphy said that much of what they learnt, they hadn’t expected.
For example, in Europe in 2016, over half of all online sales took place on a mobile phone.
“For many people aged between 18-24, the mobile phone never leaves their hand, they just won’t let go of it,” he said.
According to Murphy, the CEOs interviewed and the consumers surveyed revealed six key themes, namely that there was a huge disconnect between the two worlds.
“What we found out was that many retailers just don’t understand their customers properly — what their expectations are, and how they like to shop, for example,” Murphy said.
The next most important thing once retailers had a firmer grasp on their customers, the managing director said, was to find ways to become more agile and quick to act.
This might include ordering smaller quantities of stock, and quickly replenishing items that are selling well, by analysing real-time sales data.
The other key area of focus in the report is the role of the store in 2017.
“Stores are important across the board, many retailers do not know what role the store will play in the future, or the format of the store,” Murphy said.
He said that many CEOs had told him they planned to close shops in the near future due to rising costs and the growth of online retail.
Murphy challenged this notion, however, saying: “what about money that is spent online, on things that people have seen in the store. The shop, therefore, is part of the sales journey for customer.”
This is not currently how retailers are thinking, Murphy added.
“They are not prepared for the changes. They don’t know what they don’t know,” he said.