At Flame we have had an insightful interview with Miguel Murta Cardoso, a prominent expert in the retail sector, Head of Retail at Sensei. In this conversation, Miguel delves into the crucial role of technology in retail, the pros and cons of online versus offline shopping, and the significant challenges facing the industry today. He also offers an inspiring vision of the future of retail, likening it to a masterpiece created through the collaboration of a skilled artist and artificial intelligence. Don’t miss out on this interview packed with valuable insights and perspectives to better understand the world of retail!
Interview Retail Sector: “Technology is crucial in the retail sector”
We start by assessing the current context of the retail sector. Will offline disappear?
Absolutely not. The disappearance of offline retail, especially in the food sector, is not on the horizon. This is such a distant possibility that none of our living relatives, barring an unprecedented societal shift, will witness it. However, this does not mean that the importance of online channels should be underestimated. On the contrary, significant investments in online platforms and digital initiatives are crucial. These investments should focus not only on e-commerce but also on enhancing overall digital engagement to strengthen customer connections. The right online strategies can greatly influence and boost offline sales, which will continue to account for a substantial portion of total sales.
The right online strategies can greatly influence and boost offline sales
What are its defects and virtues in front of online retail?
In my opinion, there are three main reasons why online food retail sales haven’t soared. First, the in-store shopping experience, particularly for fresh products, is irreplaceable. Customers value the ability to personally select their produce and other perishables, an experience that online platforms struggle to replicate satisfactorily. This difference significantly limits the appeal of online food retail.
Second, while convenience is a major reason for shopping online—avoiding traffic, parking, and queues—the delivery aspect of food e-commerce poses significant challenges. Scheduling precise delivery times is difficult, leading to customers feeling confined to their homes, waiting for their orders. This diminishes the convenience factor that is supposed to be the primary advantage of online shopping.
Retailers must ensure that store operations are as close to perfect as possible
Lastly, current online platforms (websites or apps) often fail to provide a seamless shopping experience. Issues such as incomplete product listings, inaccurate stock levels, and technical problems detract from customer satisfaction. For food shoppers, these shortcomings are particularly impactful, affecting their overall experience. From the retailer’s perspective, the challenges are equally daunting. Managing the logistics of online food sales introduces a level of complexity that demands significant resources and sophisticated systems to ensure efficiency and customer satisfaction.
On the other hand, there are virtues that attract a segment of the population to online food retail. The convenience of home delivery is appreciated by some, particularly those who don’t mind waiting at home for their orders. Additionally, the benefit of not having to carry heavy items is a major plus, with many customers opting to purchase bulky, non-perishable items online while still shopping in-store for fresh products. Finally, online platforms can offer a larger assortment of products than physical stores, which is a significant advantage for consumers seeking variety.
Wages in retail are traditionally lower than in other sectors, making it difficult to retain staff
What is the biggest problem or weakness that retail has to face?
Historically, retail has been characterized by very low profit margins, and this challenge is likely to persist into the foreseeable future. It is exceptionally difficult to alter this fundamental aspect of the business. Additionally, a significant challenge related to low margins is employee retention. Wages in retail are traditionally lower than in other sectors, making it difficult to retain staff. However, there are numerous initiatives and tools available today to address employee turnover. By carefully analyzing and investing in these strategies, retailers can improve retention rates and achieve best-in-class results.
In the current context, what role does technology play in retail? Does it help to engage your customers?
Technology is crucial in the retail sector, serving as a solution to many of the challenges previously mentioned. It enables improvements in operational efficiency and customer loyalty, which are essential for success. A wide range of technologies is transforming traditional retail practices. Autonomous stores, predictive sales models, advanced loyalty programs, and sophisticated stock management systems all contribute to increasing sales, reducing expenses, enhancing employee satisfaction and retention, and improving customer loyalty. However, with so many technological solutions available, it can be challenging to determine where to invest.
A wide range of technologies is transforming traditional retail practices
What does it take for a store to work? Is there a magic recipe?
Achieving excellence in the operation of a retail store is nearly impossible due to its dynamic, ever-changing nature. There’s always room for improvement, every day, every hour. Anyone, especially technological providers, who claims to have a magic recipe for retail success is either misleading or uninformed. However, one crucial factor that can significantly impact a store’s performance is having the right store manager. A skilled manager can effectively oversee daily operations, motivate the team, and ensure customer satisfaction. While it’s not a magic recipe, investing in the best talent for each store is a powerful way to facilitate great results. Retailers should allocate time and resources to hire and develop top-notch store managers.
Investing in the best talent for each store is a powerful way to facilitate great results
How is customer loyalty achieved? How do you engage your customers?
Each retailer must develop its own unique value proposition—be it exceptional service, a wide assortment of products, or the lowest prices. The key to customer loyalty is consistency in delivering on this value proposition every single day. While developing a solid strategy, designing effective processes, and crafting a sound business plan are crucial steps, the real challenge lies in daily execution on the store floor. To engage customers and foster loyalty, retailers must ensure that store operations are as close to perfect as possible, always keeping in mind that perfection is unachievable. This is where the role of the store manager becomes indispensable. A competent store manager ensures that the value proposition is consistently met, thereby fostering customer loyalty and engagement.
How do you see the future of retail?
Imagine a stunning painting created through the collaboration of a skilled artist and artificial intelligence. For me, this is analogous to the future of retail—a masterpiece crafted by retail experts with the support of advanced technologies.
