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Accenture Outlook Me-Tail Revolution Retail

Accenture Outlook Me-Tail Revolution Retail

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Published by: Accenture on Feb 23, 2010
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Industry Report | Retail
The “me-tail” revolution
By Janet L. Homan and Renee V. Sang
In a dramatic shit in power rom seller to buyer, the sametechnology that gives shoppers unprecedented choice or meetinga multitude o demands also keeps those demands in constantlux. With increasingly ickle and ootloose customers searchingor instant gratiication, how can today’s brick-and-mortarretailers remain relevant?
The journal o high-perormance business
This article appears inthe February 2010 issue of 
 
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In the words o one veteran shopper,“It’s all about me.”Retailing, the direct sale o goods andservices to consumers, is evolvinginto “me-tailing”—the quest or switand seamless shopping on demand,coupled with virtually endless newexperiences and enabled by technol-ogy that gives shoppers an unprece-dented choice o products and servicesthat meet a multitude o demands.But the same technology also keepsthose demands in constant ux. Theimplications or the retail industry o this shit in power rom the seller tothe buyer are enormous. The mantraso today’s traditional retailers—cus-tomer-centricity and optimized supplychains—will not be enough to keepthem relevant to increasingly fckleand ootloose shoppers in search o instant gratifcation.Indeed, retailers need to radicallyreinvent themselves.Some are beginning to do so. Theyare engaging with their customersin increasingly imaginative ways byleveraging the same telecommunica-tions and digital media that haveso altered consumers’ lives. Withinthe next ew years, as this transor-mation accelerates, Accenture envi-sions much more dramatic changes.For example, “ast ashion,” alreadythe hallmark o apparel retailersthat can cater to demand just asneed arises, will become the de actoindustry standard—a developmentwith dramatic consequences or storeinventory levels. In act, stores as weknow them—physical spaces—willbecome merely extensions o other,newer channels that allow consum-ers to confgure and control their shopping experiences rom a varietyo locations, eectively editing their product choices. Already, or example, Amazon.com allows its customers tosend a photo o a product they wantand then helps them fnd it.Sustainability, we believe, will loommuch larger as a contribution thatcustomers will value when makingthose choices. Meanwhile, consumersthemselves will orm so-calledcommunities o talent that will helpservice new, extraordinarily diversedemands.
Hardwired for shopping
The Millennial generation—looselydefned as those between their mid-teens and late twenties—is thedriving orce behind this retailrevolution. Hardwired or shopping,Millennials have grown up in adigital world; they want mobile,multi-channel, real-time shopping.In eect, they want to serve them-selves. And the eort to satisythem is leading to the convergenceo retail with telecommunicationsand new media.Domino’s Pizza, or example,enables orders via cell phone app,Facebook or TV. The print shops inStaples’ Canadian stores use virtualexperts channeled in, on-demand, tohelp customers defne the print job,mock up samples and place orders.Best Buy is leveraging the power o crowd sourcing to answer custom-ers’ questions and resolve serviceissues via Twitter, the micro-bloggingsite (see sidebar, page 3).The Millennials’ preerences, more-over, are shaping those o other customer segments. Consider, or example, that almost three-quarterso Europeans responding to a recent Accenture survey said they woulduse mobile phones or productinormation scanning, and morethan hal agreed that being ableto interact with an online productexpert would save them time.It won’t be long beore Internetpenetration turns the Millennials’always-connected, always-on ex-istence into a nearly global way o lie. Consumers almost everywherewill become retail grazers. And
 
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more ocused store ormats like Walmart Neighborhood Marketsand Tesco’s Fresh & Easy will likelyintensiy. But the sheer diversity o both shoppers and shopping trips willactually require multiple ormats.In the uture, the name o the storegame will be precision retailing,with each store ormat tailored to aspecifc local market. What’s more,people who actually visit a physicalretail space will be in search o anexperience—something that adds value beyond just being a distribu-tion point.They may avor bookstores thathost stimulating book clubs andguest authors, or toy stores thatlet kids indulge themselves whilein-store experts, both real and virtual, answer parents’ questions.The Walt Disney Co., or example,is considering re-branding its 340stores in the United States andEurope as Imagination Parks, wherethat spells huge opportunities or startups, which will prolierate astechnologies provide the means topenetrate markets globally.Some o these new entrants, whichwe call wildfre niches becauseo the speed with which they canspread to serve dierent consumer segments, may even grow intodominant brands. Consumer fckle-ness suggests that much o thatdominance may be short-lived.But agile players will survive. Andwe expect some o those that allo the radar screen to speedilyreemerge as The Next Big Thing. All this has huge consequencesor brick-and-mortar stores, o course. Why, ater all, shouldshoppers seeking items closer tothe point o need bother to go intoa store at all i they can satisytheir demands more switly andconveniently online and on themove? The current vogue or smaller,
Keeping constantly connected with consumers will be key tosuccess as retail morphs into “me-tail” (see story). And BestBuy, the world’s largest consumer electronics retailer, aims tobe in the vanguard.This past summer, the Minnesota-based company launcheda new service, Twelporce, which puts its 155,000-strongglobal workorce in direct contact with customers via Twitter,the popular microblogging site.Customers who have questions about products or needhelp with technical problems, or who want service issuesresolved, can “Tweet the Twelporce,” which is a singleTwitter account or all Best Buy employees across alloperations, including the company’s amous Geek Squad.Twelporce replies to each speciic user’s query. But otherTwitter users—both employees and customers—can alsolisten in and contribute, so the new service provides adiversity o opinions and experiences rom which anyonecan beneit.Best Buy is no stranger to the potential o crowd sourcing. Forexample, the company aggregated eedback rom a wide varietyo sources to develop a new line o super-thin and lightweightlaptops with superior warranty support. And a February 2009rollout that empowers all o its US stores to accept most con-sumer electronics or recycling provides urther evidence thatBest Buy is acutely attuned to its customers’ evolving needs.As those needs escalate, Best Buy is well positioned to respondwith a customer-acing supply chain that leverages advancedanalysis o individual sales transactions to enhance productassortment and in-store placement, and helps better manageboth replenishment and in-stock levels.Meanwhile, the retailer is expanding a collaborative planning,orecasting and replenishment agreement with a South Koreanhigh-tech company that has enhanced supply chain efciencies bycutting merchandising, inventory, logistics and transportationcosts in North America. The two frms are now sharing key cus-tomer insights about the Chinese retail market, where Best Buyplans to open several hundred new outlets over the next decade.
Best Buy: The Twelporce advantage

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