Consumer Goods December 2012

U-Channel Retail

“Ubiquitous, Universal and Unique”

U-Channel Retail

U-Channel Retail

The retail landscape is undergoing major changes driven by external trends and due to a challenging economic environment, spending and recovery continues to be challenging.

Tomorrow’s customer wants to complete purchases when they want and where they want – and rapidly evolving mobile and online sales platforms enable this. In response, retailers are adapting their business models and we are seeing the appearance of U-channel retailing.

U-channel retailing is a new form of retailing that is Ubiquitous, Universal and Unique, focused on “U” – the customer. In practice a future proof U-channel is the ability to offer the customer more channels to interact whilst seamlessly integrating them to ensure “one face to the customer”. Channels will become mere “touchpoints” as consumers navigate smoothly through the buying process; selecting products online at home, picking-up their products at a convenient location and paying from their mobile phone.

This transition will not be an easy one for many retailers and at first sight nobody seems to have a clear advantage: “bricks and mortar” establishments are reluctant to embrace mobile technology, while online retailers lack the physical presence on the ground. In parallel, large online media groups have the customer base and customer knowledge but are yet to leverage this into the retail sphere. Tomorrow’s winners have already begun drawing the roadmaps of their transformation and are making the required investments to rethink the backbones of their retail models. At Arthur D. Little we are convinced that in order to transform successfully to a U-channel environment, retailers need to address seven key domains of the company:

  1. Culture
  2. Channel strategy
  3. Value offering
  4. Process landscape
  5. Governance
  6. IT architecture
  7. Workplace 2.0

Developing true U-channel retailing is a multi-year program requiring well thought-out roadmaps. Only by initiating reflections today will retailers be able to craft the organizations, logistics networks and partnerships required to succeed in tomorrow’s retail environment and retain the ownership of their customers.

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