Retailers are currently confronted with several challenges in regard to their relationship with

their customers. Shoppers expect retailers to sell quality products and to provide them with good
service levels within their stores. However, they also expect the retailers’ prices to be as low as
possible. The last several years have seen fierce price competition, which has forced retailers to
cut costs wherever possible. Apart from the optimization of supply chain activities, through
initiatives such as Efficient Consumer Response (ECR), retailers have also reduced the number
of employees in their outlets. This cutback has led to a lower employee to customer ratio in retail
stores, which in turn created new problems e.g. longer waiting lines at the point-of-sale (POS)
and difficulty for customers in finding store personnel for assistance. Today, 95% of retailers
consider waiting lines at their checkouts as the most serious problem to be solved in order to
improve service for their customers. A third of the respondents stated that they could not find
store representatives when they needed help, or that representatives did not have enough product
knowledge to be able to assist them. The customers have left retail stores without purchasing
anything, precisely because of these problems.

These problems can lead to various negative consequences in the short, medium and long term:

Crowded stores, and the necessity to wait at the checkout, cause shoppers to take a place in the
waiting lines as soon as possible. Additionally, they reduce their shopping to that which is
absolutely necessary, so as to be able to leave the store at the time they intended to. This can
directly lead directly to a decline in sales for the retailer. On the other side, negative experiences
have an influence on shoppers in their future choice of a store. Long waiting lines and bad
service can thus cause a retailer to lose customers permanently.

One cause for the long waiting lines at checkouts is the slow payment process, which prevents
the cashiers at checkouts from starting to scan the next customers purchase. The most time-
consuming payment process is cash, which to some extent is promoted by retailers through
restricted card acceptance and the instatement of minimum amount rules for card payments. A
wide ranging switch from cash to electronic payment could increase the tempo of the payment
process and shorten waiting lines in retail stores. In addition, offering customers the opportunity
to use the payment instrument of their choice constitutes a service contribution

Retail Forward identifies 10 innovation opportunity areas with tremendous potential for creating
new consumer benefits and stakeholder economic value

1. Catch a Wave. Retailers that apply innovative thinking to a growth market opportunity

created by demographic, societal, economic and technological trends can generate
significant growth and financial performance. The needs of an aging population, ethnic
consumers and the pursuit of a healthy lifestyle provide fertile ground for innovative
solutions.
2. Solve My Problem. consumer-centric approach creates opportunities to add value to the
shopping experience. This requires adding services, information and support to the
product mix to provide a complete solution for task-oriented shoppers. Presenting
products in context and bundling products and services retailers create consumer value
and competitive differentiation.

3. Do It for Me. Demographic shifts and lifestyle changes are driving former DIY
consumers into the do-it-for-me (DIFM) market. Retailers are responding to consumers'
increasing demands with innovative services and conveniences. Installation services from
home improvement and consumer electronics retailers and home meal replacement
options are fast-growing examples of do-it-for-me innovations.

4. Help Me Choose. Information overload, too many choices, more complex products and a
lack of knowledgeable sales assistance create opportunities for retailers to develop
innovative solutions for consumers. Allowing shoppers to sample the merchandise before
buying, utilizing on-demand information kiosks, partnering with celebrities to provide a
seal of approval and creating online communities provide consumers the help they need.

5. Come to Me. New distribution models are allowing retailers to connect with consumers
wherever they are-at home, at work or in the car. Mobile retailing and target marketing
are gaining in popularity as time-pressed consumers seek greater convenience. New-style
direct-to-consumer rental concepts also are serving an important consumer niche.

6. Enhance the Experience. Retailers increasingly will differentiate themselves by using

experiences to sell the dream-as well as the product-and bring the brand to life. By
making stores "super-immersive" and integrating branding into entertainment and other
customer experiences, retailers are exploring ways to create memorable brand
interactions that resonate with their target consumer.

7. Make It Easy . Innovative process, service and design solutions that are simple, intuitive
and in tune with shoppers' needs-along with new technology tools-can save consumers
time and effort. Retailers that implement easier and more rewarding customer
experiences will realize sales growth and enhance customer satisfaction and loyalty.

8. Do It My Way. shopping becomes increasingly individualistic, innovative retailers will

seek ways to provide more unexpected gratification to shoppers and allow them to
express themselves in unique ways. In addition to mass customization and
personalization, retailers are offering opportunities for customers to participate in the
development of new products and services.

9. Help Me Connect. Social networking fosters community among consumers who share a

common interest. Retailers are forging stronger relationships with consumers and earning
 their patronage by helping them to connect in ways that are important to them and by
responding to their emotional and physical needs.

10. Speed It Up . Consumers want it fast; they want it now; and, they want it first. The need
for speed in the shopping process will continue to drive changes in store concepts, design,
location, merchandising, transaction processing and payment.

In the past few decades, most retail innovations focused primarily on efficiency in response to
mass market opportunities. While ongoing innovations in technology and operating strategies
will continue to improve efficiency, future retail innovations will be more customer-facing.
"Going forward, retailers will address the unique needs and desires of individual consumers and
provide a more rewarding and memorable shopping experience," Rubel comments. "They will
innovate around new formats and distribution models, product and service offers, marketing and
customer communications and other components of the retail business model," he concludes.

EXAMPLES

Retail

Tata Steel decided to foray into organised steel retailing with Steeljunction - the first of its kind
in India. To catalyse steel consumption in emerging mass markets of India and to build
downstream retailing excitement for steel as a category, Tata Steel spearheaded the company’s
entry into pure play retailing for steel products.

 The pilot store was launched in Kolkata with the objective of providing a platform that would
bring together vendors and manufacturers to understand consumer buying behaviour for steel and
develop new products. This would ensure an exemplary change in steel buying experience
making it more pleasurable for the end user.

 The steeljunction store showcases both leading Indian and international brands, assuring the
customer dependable quality and reasonable price. It is aimed to be a family shop catering to
every steel need that may be conceived of and thus it effectively displays the versatility of steel -
from its functionality to its aesthetics.

 Services offered include home and office interior designing, civil and plumbing solutions and
renovation. The sprawling 23,000 sq. ft. store is divided into two floors. The ground floor houses
hardware and home construction items. The first floor has accessories for home and other ranges
like gymnasium equipment, kitchenware, bathroom fittings, tableware, modular kitchens,
lifestyle products, jewellery and more. 

The Knowledge Centre at ‘steeljunction’ is a forum that provides a world of information on the
usage of steel and its various applications from decorating homes to setting up a futuristic office.
It offers practical solutions as well as insights on renovations, decorations, furnishings,
accessories and industrial products.