Tag Archive for: Digitalisation

[Intern Insights] Digitolution: The sharing economy

What is a sharing economy and what changes came along with it?

Sharing and exchanging items has been around as long as humanity and digitalisation has brought it to the next level. With the rise of the Internet, people can connect across boundaries, now able to swap, lend, rent, resell, donate, subscribe, and share all kind of item.

The sharing economy movement, collaborative consumption – the definitions for this vary per disciplinary field – as we know it today, is all about people sharing underutilised human, physical and intellectual resources. The concept might have originated from idealism but with the help of digitalisation, it has evolved into a profit-driven business model.

With a sharing economy, the borders between customer and professional have been blurred. In many cases, the middleman has been cut out. Every consumer is now empowered to make business by monetizing their own assets, knowledge, and services.

Behind many peer-to-peer transactions, we often find fast-growing profit-driven, multi-million dollar corporations. Start-ups that had a simple but brilliant idea based on the values and spirit of the sharing economy movement now surpassed the sizes of well-established companies, disrupting several long-established industries and economic structures. With all advantages that have come along, such as a boost of innovation, marketplaces have become less regulated, creating challenges for established industries and businesses.

To quote Tom Goodwin:

“Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.”

Reasons why the sharing economy might revive:

 At the core of the sharing economy are the people., Whether it’s individuals, communities, or companies, all are embedded in the sharing system. Aside from the fact that every aspect of out lives is digitalised, changes in demographics have contributed to a sharing economy as well.

Maybe it’s due to our exposure to news on a daily basis, but certainly, our societies experience a shift back to community values.

Especially in developed economies, we can see a shift away from status-driven values, instead, we see that unique and authentic experiences, coupled with convenience, is what people are really after [Escan, 2011].

A sharing economy reflects those changes: trust between the provider and user lies at the core and using a service offered on a sharing platform often is perceived as a more authentic experience than purchasing the same product or service at a traditional store.

Besides this, people’s consumption patterns changed. Just look a few decades back where we lived in an ownership economy and dreams were realised by buying a nice house with garden in a suburban area, owning a car and all. Today ownership often feels like a burden. The dream house now has been swapped for a small rented apartment conveniently located in the city centre.

“We always have been in a culture where more is more, and suddenly we’re in a culture where less is a better quality of life. It’s pretty revolutionary.” – Bill Steward-

People want to be satisfied on the spot, having the product or service delivered instantly and conveniently, without having to put any effort. Connectivity, social media and smartphones make this possible. This is especially true for Millennials, that take part in sharing goods most actively, and for whom sharing is becoming the norm more and more.

Depending on the model, sharing concepts indeed are a more sustainable form of consumption that can contribute to a more circular economy. However, this story is more complex. Sharing can make us consume more as well, but we’ll save that discussion for another time.

How does the sharing economy affect the retail industry?

When hearing about the sharing economy, mostly we link this to companies like Airbnb, Uber, or Spotify, which have changed the concept of travel, transportation, and entertainment. But it is not ending there, small companies based on the sharing economy models are popping up everywhere, letting my wonder, which industry will be next?

In 2015, a survey conducted by PWC found that whilst the percentage of US adults that already have engaged in a sharing economy transaction connected to the entertainment and media industry with 9%is the highest, only 2% did so for a service within the retail industry in 2015.

I would probably have been reluctant letting a complete stranger stay at my house a few years ago, it’s something I could consider doing today. This is because platforms like Airbnb have managed to create trust. People have already opened up their homes for a night’s sleep, sharing cars for carpooling, and so on, and yet, we’re not really ready to share clothes quite yet.

Also read this article: Retail Customer Service: Reality of Retail Industry

How come?

It might be because whilst the examples above provide services, the retail industry is product based. Furthermore, owning assets such as a car comes with a lot of extra costs, such as insurance and ever-rising fuel prices, that make it less attractive to own a car. Owning a normal-priced piece of clothing, on the other hand, does not have further implications for the owner than the initial price and using up some space in the wardrobe – however, the implications on the environment the production and distribution of clothes have is huge. To get a better idea of what impact the fashion retail industry has on our environment you can have a look at this blog.

This post is brought to live by AQ’s Undergraduate Alexa V. .
As part of our internship programs, undergraduates and classic interns are encouraged to take part in company culture. Alexa’s primary focus is in digital marketing.

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[Intern Insight] Imagining the Future: My Future Shopping Experience

We have come to an end. This is the final article in this series and I’ve been struggling to find a fitting finale for it. We have covered topics ranging from customer service, customization, psychology to retail sustainability and global influence. All relevant sides to this major economic engine. I have conducted relevant research and read a lot of expert opinions. I think the only thing left to say is how I picture my future shopping experience.

What makes me so special?

Simply? The future shopper generation is my generation: The Millennials (Synchrony Financial, 2017). These shoppers will be technology-oriented. I am a futurist, hence the title. These shoppers will make purchases mostly online, but they will visit brick-and-stones store to benefit from merged service experiences! I’m partial to bookshop-cafés for example. Further, Millennial shoppers will opt for augmented reality to enhance their experience (ibid); I limit myself to trying out new hairstyles on mobile apps…

What I am trying to say is that I am a tiny drop in a massive storm that is about to come down on the retail industry. Together with my fellow “drops”, I have the power to shape the future and this is how I picture my future shopping experience:

First, I would like to bring to your attention the Law of Technological Adoption. As Taylor Romero said in his TED Talk “Everything invented before you were born: it’s just how it’s always been. Everything invented before you were 30: it’s innovation. Everything invented after you are 30: it’s impossible.” (Taylor Romero, 2016).

Let’s take a product that I like: books. You cannot go wrong with books. Nowadays, books come in many formats; hardcover, softcover, eBooks, audio books. When I was a kid, those formats were more limited. So, softcover and hardcover, it’s just how it’s always been. Ebooks? Innovation. I can take an entire library with me in just one tiny device, everywhere, every day. Currently, I’m still in my ‘innovation’ window of opportunity. What I really want, what I imagine many an avid reader wants, is total immersion in the world of stories.

I would love to walk into a bookshop and be welcomed by the smell of chocolate, hot pastry, and fresh paper. When I walk into a specific section, I want the authors to talk to me, let them be the advertisers.

Imagine a holographic Shakespeare popping up in the Classics section to tell you more about Hamlet, or King Lear, or Romeo and Juliet. This technology is not as science fiction as you might think. With the help of digital holographic projectors and optical screens that reflect the light of projected holographic 3-D images to a target observation area, digital 3-D signage and holographic in-car dashboard display is just around the door (Phys, 2016). Why shouldn’t it be adopted in the retail industry?

How wonderful would it be, if I would walk into the Fantasy aisle and an entire panorama of the Lord of the Rings’ Middle Earth would appear with Aragorn’s holographic self to escort me to the cashier. Talk about personalization!

If I had doubts about my choice of literature and immersion, then the augmented reality technology from my phone would help me understand what each book is about. In any of these situations, I would get my information instantly and accurately, no “buffering” for me, no sir! Because I have no patience. My gratification needs to be instant.

For a long time, I thought that this imagined experience was just wishful thinking, a daydream, but technology has this miraculous quality of transforming the abstract into almost tangible interactions.

Technology is the avatar of what we dream and cannot express.

It makes self-interaction possible without selfishness. The retail industry of the future can help me understand myself better: letting me explore the reasons why I like certain products or services, the reason why I chose them, or why I am not trying out new ones. Most importantly, the accessibility of the retail industry would be so easy; I would not be held back by the inertia of buying simply because it’s comfortable. Everything will be comfortable. What is left to say other than the fact that I am looking forward to the future. And William Shakespeare speaking to me from the aisles. And being guided to a cashier by a favourite character. Thank you for imagining the future with me.

This post is brought to you by one of AQ’s Undergraduates, Laura Susnea. As part of our internship programs, undergraduates and classic interns are encouraged to take part in company culture. Laura’s primary project focusses on training programs and eLearning and how best to adapt this to industries under pressure.

This is the final entry for the Imagining the Future series. The entire collection can be read here.

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[Intern Insights] Digitolution: How digitalisation changes the global retail supply chain

A supply chain covers all businesses and individual contributors that are involved in creating a product, ranging from suppliers of raw materials to the end-customer.

Technological innovations can be used to upgrade traditional supply chains to smarter, more connected and highly efficient digital supply chains. This is not an easy process, as supply chains are very complex systems embedded in an even more complex global economy. Contributors often are internationally located, which involves dealing with different politics, trade and traffic laws, and quality control regulations.

I like to imagine it like the Butterfly Effect: a small wing flutter, a slight change of a process or regulation, might affect another stage in the chain.

Today, a supply chain is often a series of isolated steps taken through different stages of logistics such as manufacturing, warehousing, and transportation.

In a digital supply chain, those stages will be seamlessly connected and fully transparent to all individual contributors involved. A completely digital chain does not exist yet, but to keep up with demands and technology, and to profit from the financial benefits, many companies within different industries now started digitising their supply chains.

Whilst industries such as electronics are already further in the process of digitalising their chains, asset-intensive companies or consumer-facing companies, such as retail and fast-moving consumer goods, stayed behind [PWC, 2016].

How is the general supply chain going to change?

A digital chain becomes more transparent, which contributes to a better understanding of what every link in the chain is doing. Amongst others, this leads to:

  • Improved collaboration: Real-time insights in the needs and challenges of others will be possible.
  • Fast communication: Information that used to be delayed, as it had to move through each step and reach all stakeholders will be available to all simultaneously.
  • Demand driven supply chain: Planning will be fast and flexible and away from just forecasting, instead of being demand driven.

The transformation to optimise supply chains becoming more reliable and responsive is driven by new technologies such as track-and-trace technologies, big data, cloud computing or the Internet of Things, but it’s not technology alone. People’s behaviour changed, they became multichannel consumers, more demanding, wanting the product delivered instantly and conveniently.

[PWC, 2016].

What do the changes in people’s behaviour and expectations mean for the retail supply chain?

Today, people purchase digitally. Online shopping is booming, even categories that relied on an in-person shopping experience moved online. In 2016, nearly two-thirds of consumers shopped online at least once a week, an increase of 41% from 2014.

People shop using multiple channels, be it in-store purchases, mobile, tablet or laptop, consistency, high quality and excellent service is expected, of course to the lowest costs (The Future of Retail Supply Chains, McKinsey, 2016).

Comparing competitors’ prices online or ‘showrooming’ – browsing in stores but buying from a cheap competitor online – give the consumer more power. Customers define more and more how companies have to structure their supply chains.

The shift to multichannel, the customer’s expectations such as same-day deliveries or returning online ordered goods free of charge – using any channel – lead to blurring the boundaries of channels. For example, goods ordered online but not liked can be returned back in-store.

This requires adaptation, to give a simple example:

Instant deliveries require a high stock of inventory in strategically positioned distribution centres. One centre might is enough to secure delivery within 2 or 3 days, same-day shipping requires more distribution centres. A piece of clothing that was ordered online gets returned in-store, means that the store now must stock an item that might is not sold usually or bring up time and costs of returning it to the distribution centre.

What does an optimised retail supply chain look like?

In the example above, technology that allows seeing inventory levels across the store network can help managing inventory levels across the store using various channels. A returned item that the store normally does not manage, can be delivered straight away to the next online order that comes in, saving time and operation costs to return that item to a distribution centre whilst cutting time on the delivery side. With technology, information about products that are stored anywhere, be it a store, a warehouse, can be made available to customers instantly.

But it can go further than just inventory management.

Imagine that drones could be used to deliver goods faster, a move Amazon is looking into. Or imagine virtual reality, used to shop online, letting customers enter a virtual store with products they actually can engage with whilst just sitting on their sofa in the living room. A whole new level of customer experience! – and a way to collect more data about the customer than was possible before. Every move, every product just looked at could be tracked.

Retailers that want to stay competitive need to find a right balance between quick wins and long-term strategic vision. The supply chain needs to become more customer-focussed, agile to fast respond to the changing needs of the consumers and cost-effective. Big data helps better predicting demand, even though combining internally available data with external, less transparent data as well as correctly interpreting the data will be challenging [KPMG, 2016].

What will change is the way the supply chain is looked at, seen as a cost driver – factors such as total cost of ownership, spend analysis and so on are very well understood – however, with technology, that brings an understanding of how customers’ behave, the supply chain will become a sales driver.

This post is brought to live by AQ’s Undergraduate Alexa V.
As part of our internship programs, undergraduates and classic interns are encouraged to take part in company culture. Alexa’s primary focus is in digital marketing.

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Understanding Customer Service: A Social Media Tale

What does Understanding Customer Service mean?

I’m not talking about understanding them in terms of demographic or marketing terms. Here we will explore understanding them in terms of Understanding Customer Service.

Is the first thing that came to your mind after that sentence “empathy”? Well, that is right. Though, just the tip of the iceberg.  Let’s take a look at some amazing examples before we move on.

Here we have the tale of Salisbury customer Service Legend “Ross” (it’s even mentioned by the customer herself)

 

Understanding Customer Service - Salisbury

Understanding Customer Service - Sainsbury - Ross

Understanding Customer Service - Social Media

Understanding Customer Service - Social Media - Sainsbury - Ross

You can read the rest of the conversation here.

I hope you have a smile on your face after reading that.

Now, if you get “English Humour”, you can see from the first post from the customer that she was complaining in a very tongue in cheek way. This is very dangerous since it could have easily been misinterpreted. I’m sure you can tell that it could have gone sideways very fast.

 

Our legend, Mr. Ross, understood his customer. He was not afraid to match the humour, maintaining completely professional to resolve the issue. This isn’t something easily done. Of course, some training is required (at the beginning). After years of dealing with people, it becomes possible to understanding customer service and the reasons why certain situations are handled in a certain way, breaking away from that rigid structure. This is when fluidity happens.

 

Different situations call for different actions. In Ross’s case, it was probably one of the worst customer service situations that could have happened. Worst still that it all took place was on Social Media – which could have led to a PR nightmare. Ross kept his cool, dug into his customer service tool box, and pulled out humour as the main weapon. LEGEND!

Customer Response - Customer Service

If you want to see more of this Customer Service Fluidity, here is another great tale for you to check out.

The tale of “William the Worm and Tesco.” There is even a poem – as you can see below – and a Facebook Page dedicated to William.

Poem - Customer Service

 

Customer adaptability depends on understanding the customer. So what does that mean? How do you built trust in a bad situation? Can you mimic or match that customer’s humour (if any)?

If you’re able to understand your customer, then you can adapt to them, and provide fluid customer service.

Tell us you thoughts and what you would like to read from us in the comments or on our social media sites.

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[Intern Insights] Imagining the Future: Retail and Consumerism, How they affect the World

What is the consumerism?

Consumerism in one of its interpretations is a doctrine which states that the increasing consumption of goods and services is the basis for a healthy economy (Business Dictionary, 2017). In other words, for a society to function properly, it must produce and sell goods and services (Shah, 2005). Capitalism 101. The more that is produced, purchased, and consumed, the more successful and prosperous the economy becomes. This culminates in the yearly gross national product (GNP), the measure of success every nation uses to rank its economic power (ibid).

What does that have to do with the Retail Industry?

Retailers are defined as the final link between manufacturers and consumers. Basically retailers are where demand and supply meet (The Balance, 2017). Philosophically, we could say that the retail industry is the wheel that turns the global economy. Round and round it goes. Yet, when mentioning consumerism, we often get a very negative impression. As if the world has gone bad. How can the world go bad, when the economy goes well? Does the wheel spin both ways?

I have touched on this subject on my previous entries. The moment when we, as consumers, ask for more goods, more performant, better quality, state-of the-art versions, we really confuse that poor wheel. Why? Even though we drive the economic forces that may result in a better purchasing power and life quality for us, we run the risk of stealing the same benefits from other people in other parts of the world. Or worse, we may be robbing future generations.

I am talking about the gap between the amount of resources we have and the speed through which we are using and misusing them.

Let’s take a classic example. Fast food restaurants such as KFC and Pizza Hut are designed to cater to the masses by providing food at a lower price (Global Issues, 2016). This way they are taking advantage of the economy of scale, having more beneficial prices from suppliers because of the sheer quantity that they demand.

At the same time, they create a competitive landscape putting in motion economic forces, such as the purchasing decision. Everybody’s got to eat. But what happens on the other side? Intensive breeding of livestock and poultry meant just for these restaurants. More animals means more space to house them, things to feed them, all of which can lead to deforestation, land degradation, contamination of water resources, etc.

If we were to transform this into an equation, it would look something like this:

 …for every pound of red meat or poultry or egg or milk produced equals the loss of five pounds of irreplaceable top soil from farm fields.

Another equation:

…for meat breeding one animal per day requires 190 gallons of water which equals ten times the amount of water that a normal Indian family requires per day. The sad truth is that animal farms use nearly 40 percent of the world’s total grain production (ibid.).

But this is food you might say!

We buy food, folks! It’s still on the retail side!

What does that have to do with the Future?

If we imagine the future we tend to always have these shiny, sleek qualities in mind. Everything is high-tech and functional and ordered and efficient. But this future will happen only for some people. For others, it will be messy, with masses of lands sliding away due to deforestation, limited resources of water, leading to relocation, poverty and famine. And suddenly you find yourself in Elysium with Matt Damon fighting societal inequality.

In an ideal future, all people would have access to the same resources, have the same possibilities, the same potential. Now we are digging at the roots of Marxist communism. Every way we turn a turn the wheel there seems to be a danger waiting for us.

Let’s stop the wheel. Let’s think about what we are doing and most importantly WHY we are doing! The retail industry is a powerhouse. Let it be a force for good.

If retails would think WHY they are supplying or enticing demand when it would not be necessary, their answers would be connected to the financial aspect. But future retailers…what would they say? Would they even exist? There is a precarious balance between the economical rise and downfall, sustainable development and environmental collapse. They’re all specks on a wheel and they’re turning our world.

Consumerism pushes this wheel but it can also break it. Would it be difficult to temper our needs and wants? We want so much more than any human wanted in the history of this planet and we are surpassing nature’s rhythms to supply us. What happens when demand exceeds supply? Scarcity. Economy 101. Unfortunately, this scarcity involves our home at a planetary level. And for now, it’s our only possible home.

What happens when the curtain falls?

Nobody knows what will happen, but we know for sure that the curtain must not fall. The rising awareness of consumer’s action over the environment shapes the new economic dynamics. Personally, I will pay attention to what I am buying and why. If I do need it or if 50% of the time I am just indulging myself. Because if it is the latter than I must change. Mother nature deserves more consideration. And if I can change just one person’s mind about it and that individual would change another person’s mind…well…with the risk of sounding cliché…we would change the world. So, let’s spin the wheel of fate!

This post is brought to you by one of AQ’s Undergraduates, Laura Susnea. As part of our internship programs, undergraduates and classic interns are encouraged to take part in company culture. Laura’s primary project focusses on training programs and eLearning and how best to adapt this to industries under pressure.

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