What are some of the most important issues facing the retail sector in 2014?

Sme of The important challenges facing retail sector in2014 are given below:

1.The customer is rapidly changing. They are better informed, more interactive and more selective than ever before.   Shopping Surveys bears this out as nearly60 percent of respondents feel they are better connected to coupons, competitive pricing and what retailers sell than store associates themselves. What retailers are seeking are ways to deliver high-touch, personalized experiences to their customers; in other words, a truly omnichannel experience. Unfortunately, many retailers still rely heavily on the “old school” approach — mass advertising and promotions that do not speak directly to the omnichannel customer. Understanding how your customer expects to be “spoken with” — whether through an app on her smartphone as she shops in your store or via an instant chat on your website — will continue to challenge retailers well into2014. Getting personalization right can help build loyalty and prevent the dreaded showrooming effect that puts so much pressure on margins.   

2.A particularly important way for retailers to be successful at personalization, though, is to develop meaningful insights about the customer. The second big challenge for retailers in2014 will continue to be mining the mountains of customer data and deriving relevant, actionable insights from them. This imperative refers not only to historical data, but also predictive data about what the customer will want in the future through the development of sophisticated modeling techniques.

A big challenge for the brick-and-mortar retailers is that the purely online players are trying to become more like the brick-and-mortars. Historically, the distinct advantage of the brick-and-mortar retailers over the purely online players has been their ability to provide product experience through touch and feel. Now, however, the online retailers are offsetting this immediate gratification by creating an emotional rush through flash sales, social shopping and near-real experience through augmented reality (AR) apps. As such, the brick- and-mortars need to leverage every opportunity they have to engage customers and build loyalty that endures. Innovative technologies — such as smart shelves, Wi-Fi hot spots, point-of-sales (POS) systems, virtual storefronts and endless aisles — are effective tools to engage customers both in-store and elsewhere.  

Finally, a big challenge for all retailers concerns the supply chain. As customers demand instant gratification, the industry is faced with a myriad of supply chain challenges — and opportunities. Same-day delivery and free shipping are no longer unique — they are expected. In our2013 holiday survey,71 percent of respondents said they would take advantage of free shipping if offered. And, a bit more than two thirds (68 percent) said that they were more likely to shop online if the retailer offered free shipping. Additional customer expectations — inventory availability, free returns and “buy online /pickup in-store”—are driving retailers to test new approaches to their legacy supply chains.