In this new interview we speak with Jordi Farre, CEO and Founder of Pangea Retail. Jordi defends the permanence of the physical store as a means through which companies create connections and generate reactions with customers, after all, “human beings are gregarious animals that need physical connection“.
The CEO of Pangea Retail also highlights the importance of technology for the retail sector, although he emphasizes the need for people who know how to analyze the data obtained through it.
Do you want to know what else Jordi thinks about current situation in the sector? Continue reading this interview.
We start by assessing the current context of the retail sector. Will traditional/offline store disappear?
Never. The physical store and online sales are complementary and do not cannibalize. Today there is a lot of talk about online sales, but for most of the large European chains it does not represent a very high weight compared to total sales.
Another important issue is the profitability of those sales. The cost of acquisition per customer continues to grow as a result of an oversupply and a drop in conversions, and digital native brands are beginning to move to the offline world to continue growing and contain their costs.
What are its defects and virtues in front of online retail?
Human beings are gregarious animals that need physical connection and that react to impulses such as a good song, the touch of cotton, a salesperson’s smile or the smell of perfume. Today, these are impacts that can hardly be obtained on a website.
On the other hand, the physical store must be a last-mile distribution hub that allows brands to improve costs and speed of distribution, and optimize their stocks. The only drawback of a physical store is that it requires a high initial investment with long-term amortization, which always forces us to do things while measuring the risks very well. Online is more flexible.
What is the biggest problem or weakness that offline retail has to face?
Retailers know very well what we have to do, the problem is accepting that the traditional physical store model has to change and above all, we have to invest in equipment that improves the quality of service and customer satisfaction.
It seems that the weakness is the digitization of the point of sale, nothing is further from reality. You have to generate sensations and you get that mostly with a good team.
In the current context, what role does technology play in retail?
I know it’s counter-trend but the problem is not the technology, it’s the people who apply it. Something as simple as the people counter is useless if there are no people behind it who know how to analyze your data. But if I have to choose a technology that is helping all retailers a lot, I would highlight the single warehouse. Being able to access the stock of each store from any point of sale greatly improves customer service and sales. All happy.
The problem is not the technology, it is the people who apply it. We need people who know how to analyze data!
What does it take for a store to work? Is there a magic recipe?
Of course, and it is as old as it is simple:
- Location. It represents 40% of the turnover and determines the viability of the business
- Equipment. It contributes 40% of sales and guarantees loyalty and a feeling of belonging to the brand
- Product. The remaining 20%. Now the old school will be on me for saying this…
How is customer loyalty achieved?
Service, Service, Service. We always return where they treat us well!
How do you see the future of retail?
Very fun, there is everything to do and new technologies warn us of rapid and more frequent changes that we will have to face with continuous training and many reflections.
Retail is more alive than ever!
At Flame Analytics we develop analytical and marketing technological solutions specialized in the retail sector. Thanks to technologies such as big data and Artificial Intelligence, we help you improve the management of your physical spaces and help retailers to understand the behavior of their customers.