The retail transformation
Cultivating choice, experience, and trust
New technologies and new ways to connect with consumers are transforming the retail sector. To compete effectively, traditional retailers should reimagine how they create and capture value, thinking past omnichannel positioning to find the best uses for their assets.
Today’s retail landscape is rapidly and dramatically changing. Driven by the forces of the Big Shift, consumers are becoming far more informed and product choices are proliferating. Technological advances and public policy liberalization are unleashing new flows of information, knowledge, and resources. As a result, retailers face new pressures:
- Lowered barriers to market entry are bringing in many new small players and fragmenting the retail landscape;
- Online marketplaces are transcending geographic proximity and expanding market demand for highly specific offerings. Small niche players can reach consumers regardless of physical location;
- Technologies such as on-demand fulfillment are changing how and where retailers hold inventory;
- New retail models are arising out of new technologies and new ways to connect with consumers.
To survive and thrive in this environment, established retailers should reassess how they create value, adjusting their asset mix to focus on the roles they chose to play. For example, digital marketplaces with on-demand fulfillment can be incredibly well suited to providing low prices and extensive choice. Brick-and-mortar assets can serve as a stage for customized consumer experiences that go far beyond ambience to surprise and educate the consumer. Another opportunity for many large retailers is to become industry infrastructure providers. Because sourcing and procurement, inventory management, store operations, marketing, and fulfillment become more efficient as they scale, established retailers can extend these capabilities to support smaller, more fragmented niche players. Traditional retailers can also move to transform into consumer agents – new entities that use deep understanding of consumers to help them navigate product choices. This requires established retailers to embrace new business models, dramatically altering both their mindsets and their business models.
When the future is uncertain, change can be difficult – and can be met with internal resistance. At the same time, periods of uncertainty can offer tremendous possibility for those able to choose a direction and shape the opportunity. By driving change at a business’s “edges,” retailers can prototype and test new business models, gather meaningful feedback, and learn and reflect with less internal tension and resistance. Small moves, smartly made, can set big things in motion.
Read our full report here: The retail transformation: Cultivating choice, experience, and trust
Do you want to know more on the retail transformation? Please contact Wassili Bertoen at +31 (0)6 21 27 22 93.