The next generation retail industry ecosystem will be driven by relevant marketing to the individual shopper, according to the keynote presentation during by Gary Hawkins at yesterday’s Retail 3.0 Virtual Conference & Expo. Hawkins defined Retail 3.0 as “real-time marketing and supply chain synergies, built on the foundation of shopper-identified transaction data.”
The CEO of Hawkins Strategic, a firm that spearheads efforts to gather, understand and use detailed customer data in the retail industry, said customer centricity will become a competitive necessity as part of next generation retailing.
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“During the past decade, power has shifted to retailers driven by consolidation (fewer, bigger tail companies) and the accumulation of shopper data through loyalty programs,” Hawkins said during his presentation. “Larger retailers leveraged size to develop sophisticated marketing capabilities and private label programs.”
Hawkins emphasized the significance of focusing on the shopper by leveraging shopper identified transaction data, which enables retailers harness the power of purchasing behaviors, store level retail and supply chain issues. Relevant marketing in real time drives the Retail 3.0 concept to the shopper.
Hawkins discussed the evolution of retail, and highlighted the role customer intelligence will play as a key differentiator about where industry is headed. “Retail was simply viewed as real estate for distribution,” Hawking said. “Life was good for brands until the mid 1990s when the entry of Wal-Mart into the supermarket business impacted the space.”
The giant’s expansion into new categories spurred the growth and explosion of frequent shopper and loyalty programs throughout retail. These programs gave retailers specific information about their customers and their buying patterns. Retailers had information that wasn’t available to brand marketers, Hawkins said, and this led to a power shift.
Hawkins said the industry is now at the start of a new shift of power, where the shopper is enabled by applications and technology available today. This shift will have a profound impact on supply chain activities and how retailers go to market.
What’s Driving Retail 3.0 Development?
Hawkins pointed to Kroger’s work with dunnhumby, the analytics company that helps Kroger understand and analyze data gathered through loyalty program. “They’ve enabled Kroger to effectively create a new asset for itself, shopper data,” Hawkins said. “Kroger monetizes assets from direct targeted marketing to store level ops and merchandising, which gives them a good idea, store by store, which brands to merchandise and display. They monetize that information by selling insights and aggregated data to brand manufacturers. This incurs $100 million per year in incremental revenue stream from this new asset.”
Center for Advanced Retail Technology (CART)
To bring the vision of Retail 3.0 to life, Hawkins Strategic's Centre for Advanced Retail Technology (CART) has partnered with RetailConnections, creators of peer-to-peer events that bring together a diverse range of retailing companies and senior management executives. The events, which provide quality education and sharing of ideas are seen to be perfectly aligned with CART's educational mission to move the industry to RIndustry educational center, showcase for these things, how they can be leveraged. CART’s mission is to enhance industry learning from hands on views into new technology
“Shopper data is now becoming very important to compete in retail today and it’s going to become even more so as we move into the future,” Hawkins said. “Retailers are going to need the efficiencies of knowing specifically who their shoppers are and being able to communicate promotions to them in a very cost effective manner to maximize and optimize their business gain.”