Post-Christmas is always a time for the retail sector to regroup, scrutinising what’s gone well, where the challenges lie and what needs to change in 2020. Retail is undergoing change at pace and survival depends on being able to adapt at pace too.
According to the British Beauty Council, fast beauty’s contribution to the British economy at over £28bn is now outstripping that of the automotive industry. This is a clear example of how embracing opportunities, without compromising on customer experience and service, is delivering rapid growth for players both large and small.
Fast beauty is a truly omnichannel market. Beauty businesses are selling to spas and retailers on the B2B side, delivering on social-led sales driven by influencers at the highly demanding end of the spectrum and exploring experiential and pop-up shops to service the more traditional route of sales in the field.
New ranges, new regulations, access to global markets and increasingly diverse customer segments are now typical of the sector. So, what can businesses learn from the beauty industry’s savvy approach to change, transformation and growth in a diverse and demanding market?
Digital technology has unlocked an overwhelming array of opportunities to reach customers and sell products, not just in the UK, but around the world. The demand for choice, availability and service is prompting businesses to fast track change to keep up.
Getting the balance right between innovating and navigating change is not straightforward. There is no classic business model that works for everyone. However, while there is a sense of urgency about adapting to new markets, successful change is rooted in careful planning.
Done badly, it can result in losing customers and market share. Done well, it can deliver rapid business growth. In either case, businesses need to have a clear strategy, a workable plan and a collaborative approach that is geared to exploiting the value of seeking out expertise which isn’t currently available within the business.
Partnering with some of the fastest growing businesses in the beauty sector we have seen the change come in many forms. It all boils down making sure scaling or shifting your business model is as frictionless as possible.
Interest from overseas markets, demand for more flexible or 24/7 delivery options and free returns, new products coming online, consolidation of product ranges or the need to rethink your storage and delivery options as you are at capacity, each of these are potential opportunities for growth, especially if the following underpin your planning.
Choose a logistics partner that buys into your vision
Your logistics partner should be agile, flexible and creative and willing to invest in your scaling plans. This could be through innovative insight, collaborative working or contributing to develop new system solutions to give you the edge.
A good logistics company won’t just deliver the goods, it will commit to delivering on your brand promises, supporting a positive customer experience, sustainability goals and convenience in a way that delivers sustained value by helping to retain customers, increase sales and gain new customers through advocacy and positive reviews.
Think customer first
It may seem obvious, but customers should be front and centre of all decisions for successful growth. Pure play, omnichannel or clicks-and-mortar businesses all need to consider the choices they are offering their customers – convenience is a huge factor as is having product in the right place at the right time.
With the increasing demand for quick delivery and next day delivery representing around 30% of today’s ecommerce market, it’s vital to meet customer needs to minimise basket abandonment but do it because it is valued by your customers, not just to follow the crowd. Free delivery and returns are complex areas that will benefit from expert advice from your logistics provider as well as customer insight to achieve the right balance between service and profitability.
Learn from your data
Utilising the power of data, technology and working in unison with your logistics partner allows you to innovate and create great services that are exclusive to your brand. If done properly, this should act as a point of differentiation in the increasingly competitive retail environment. It will also enable you to respond to regional and channel variations in demand to optimise inventory.
Retail is a seasonal market. There is much to be learned from what you have achieved in peak and most likely it is driving change. Uncertainty and changing consumer behaviours can be as much opportunities as they are threats. There will be businesses that are slow to respond, don’t be one of them. Choosing the right logistics partner can be the key to realising your ambitions and unlocking your share of 2020 retail spend with confidence.
Simon Clifford, director at third-party logistics provider, Cygnia Logistics