How The Digital Economy Is Upending The Retail World

Tom Redd

Retail is my life. Since the age of 15, I always found myself linked to the business side of retail. From my early years working on the daily books for a local retailer to my current responsibilities helping retailers and retail vendors best address their customers, it’s safe to say that retail is in my blood.

Outside of work, I indulge myself with a variety man on motorcycle heading to futureof hobbies, which range from motorcycles, fishing, and guitars to home renovation, electronics, and antique collecting. To support my hobbies and my passion for retail, I dedicate a considerable amount of time toward searching for deals both online and at local mom-and-pop shops. And as the retail industry continues to evolve, so do my shopping habits. 

The Digital Economy: Powering the evolution of the retail experience

Over the years, I have seen firsthand the transformation happening within the sub-verticals of retail. Retailers now understand that the supply chain is global. At the same time, there is no longer a single demographic or customer segment – it is individuals who consume goods and services. Each person is demanding attention to help them solve a lifestyle problem or bring a daydream into reality.

Take motorcycle add-ons, for example. Catalogs and well-inventoried bike shops were once the most common way people shopped for cool accessories and add-on components for their bikes. Nowadays, this is no longer the case. Everything is now available online and small shops no longer carry these niche products. Instead, retailers are going online and creating networked business environments to support faster order fulfillment. Top accessory vendors, such as BMW and KTM, have created complete online shopping environments selling directly to riders – removing the middleman, the retailer.

Other vendors carrying parts and accessories are going exclusively mobile and driving comprehensive loyalty programs to generate sales from returning customers. And powering this transition is the world of social media – various social sites designed to gather together the motorcycle-riding community. Personally, I enjoy www.advrider.com. On this site, riders advise each other with real-time advice and feedback on the best brands and accessories to purchase for their bikes. We even exchange pictures and videos that explain how to install the accessory!

The road to the future of retail is paved with individualized consumer intimacy

If my experience is any indication, the retail world is heading toward a profound shift, and technology will enable further change. According to Tim Hood, global vice president of Strategic Technologies and chief solution architect for Retail at SAP, “Retailers must embrace the opportunities and manage the challenges in order to be successful. The technology exists on both sides of the retailers that provide great opportunities. There are many ways the consumer can interact with the retailer. In some cases, the consumer doesn’t even know that they are interacting with the retailer, but that’s an opportunity for the retailer to understand their consumer better – in an anonymous and individual way.”

At the end of the day, it’s all about enticing consumers to spend more. As retailers get closer to consumers as individuals, more opportunities will emerge to achieve the ultimate goal.

For more insights into the future of retail in the Digital Economy, listen to the replay of “The Networked Economy: Shaping the Future of Retail,” from the special edition series “Transforming Your Business” presented by SAP Radio.

 


Tom Redd

About Tom Redd

Tom Redd is the Global Vice President of Strategic Communications for SAP Retail. His specialties include business development, product management, marketing strategy, marketing management and CRM.

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