New Retail: where the Shopper is king!
New Retail is here, but are we ready? This is the fundamental question every self-respecting brand and retailer should ask themselves, as the retail landscape is changing at an unprecedented rate, putting the shopper at its centre.
The “Amazonization” of society is taking the “Walmartization” phenomenon of the 1990s to a whole new level. Amazon’s mission — “to be the most customer centric company on Earth” — has raised the bar for retailers worldwide, not least for brick-and-mortar businesses. At the Nordic Business Forum 2018, Aswath Damodaran, Professor of Finance at the Stern School of Business at New York University, noted, “Amazon is a disruption platform with an army called Amazon Prime. They might not make money, but everyone else (in the industry they enter) will lose billions.”
“Omnichannel is more than just a buzzword — it is the New Retail where the shopper is king!”
Online commerce started with books and music, but according to the Food Marketing Institute and Nielsen, 70% of consumers are expected to occasionally buy groceries online by the year 2022. In this reality, omnichannel is more than just a buzzword — it is the New Retail where the shopper is king! An online presence is crucial for any retailer, especially when considering the vast amount of consumer data that can be collected online and then used for personalized, agile customer communications.
The shopper of tomorrow
At the same time, new payment methods, such as tokenization and biometric authorization, make purchases ever so simple and safe both in stores, on your mobile device, through the internet or even via social media. Online-to-offline showrooms, pop up shops and personalized experiences are also on the rise. To stay ahead, today’s retailers need to know the shopper of tomorrow and use that insight as the basis for concept development and strategic initiatives.
The shoppers of tomorrow may seem a bit polarized:
On the one hand, they are looking to make shopping into the easiest and most time efficient chore possible. Because there is no excitement in buying commodities, such as milk or toilet paper, it might as well be done online with direct delivery to one’s doorstep.
On the other hand, they are spending time discovering and experiencing new products and services in an inspiring environment, maybe even designing a tailor-made product and sharing that experience with others, live and online.
The polarization of shopping is heightened by technology innovations, both when it comes to simplifying the shopper’s daily tasks, and when taking the customer experience to the next level. IoT devices could, for example, anticipate the service needs of household machines or order vacuum cleaner bags just-on-time.
“Consumption choices and lifestyle define a person, much in the way fashion or brands did before”
VR and AR applications are also increasingly used to improve the shopping experience. One example is the “IKEA Place” AR app, which allows consumers to place a sofa in their living room before actually buying it — smooth, engaging and sustainable at the same time! The last point is something that the shopper of tomorrow does make a big deal about because consumption choices and lifestyle now define a person, much in the way fashion or brands did. This means locally produced organic food, clothes that last more than one season or a sofa chosen for life. The shopper of tomorrow will look for transparency in production and supply chains and is ready to pay more for a clean conscience. Informed consumption is a way of increasing personal status, often by sharing purchases through social media or word-of-mouth.
A retailer’s paradox
One paradox from the retailer’s perspective is that even though the world and the retail landscape is changing, the KPIs and the deliverables remain the same. Retailers still want to drive traffic, increase basket size, optimize margins and stock turnover while building their brand and positioning on the market. But suddenly, the old playbook is not working anymore — in the New Retail landscape, the shopper has changed, and the toolbox has evolved. That is why retailers worldwide need to look into customer-centric, data-driven, real-time personalized concepts and solutions.
This is a blog series about trends and insights in New Retail. We look into the changing needs and behaviours of shoppers, innovative technologies and the consequences for retailers from an omnichannel perspective.
If you want to know more, please reach out to the Marketing Clinic Retail team — we are happy to help you win in the New Retail landscape!