The future of retail: What marketers can do to reach their customers Bookmark has been added
The future of retail: What marketers can do to reach their customers
Today’s retail landscape is changing rapidly, remapping how marketers try to influence the purchase process. In the early 1900s, retail was dominated by local mom-and-pop stores, each providing its community with a highly personalized shopping experience. One hundred years of change later, technology improvements coupled with shifts in consumer mindset are yet again changing the nature of retail. This “Big Shift” is causing new pressure on marketers.
Lowered barriers to market are bringing in many new small players and fragmenting the retail landscape, resulting in increased competition.
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 sell and hold inventory. Tools such as digital platforms and social media can connect buyers and sellers directly across regional and even national boundaries.
In the face of these enormous changes, marketers must take on the challenge of finding ways to serve individual consumers in ways tailored to their needs and desires. They expect a seamless shopping experience across online and offline channels, with integrated virtual and physical operations. The retailers most likely to survive the current “Big Shift” are those that can provide the personal touch of a mom-and-pop corner store while also offering multiple options.
Traditional marketers need to reimagine how they create and capture value, thinking past omnichannel positioning to examine and find the best uses for their assets. In order to position themselves correctly, marketers should start by understanding what “role” their organization plays in the retail ecosystem:
Digital marketplaces cater to consumers’ demands for more options. Most so-called “fragmented players” often fulfill orders on demand using platforms such as eBay, Storenvy, or Etsy. On-demand fulfillment is affecting both luxury and mass-market retailers, as consumers are willing to pay for custom, especially as the price of manufacturing custom goods drops thanks to 3D-printing and other technologies. Fragmented players also use crowd-sourcing as a way to both fundraise and market new products and ideas. Crowdfunding-based presales, for example, guarantee demand before production even starts.
Brick-and-mortar stores now serve as a stage for customized consumer experiences that not only surprise and delight but also educate the consumer, helping them find the most relevant and valuable products to them. Brick-and-mortar marketing needs to focus on engaging deeply with and educating the customer—and evolve with consumers’ changing tastes, preferences, and needs. These physical spaces become “experience bazaars,” catalysts for engaging consumers around products and creating a supportive community among fellow customers. Oakland-based independent retailer Umami Mart connects with its customers through its blog, hosted by the owners with guest posts from food industry professionals. In-store events help the business further connect with customers around merchandise and blog themes.
Infrastructure capability providers are a new service some larger retailers are starting to offer. They support smaller, more fragmented niche players, rebranding themselves in the process. This becomes an important function for smaller niche players as they themselves try to grow, as sourcing, management, operations, marketing, and fulfillment becomes more efficient as they scale. For example, Stitch Labs is a cloud service that can track and manage inventory and sales across multiple online storefronts, and large retailers are becoming agiler in integrating independent one-off products into their regional in-store offerings.
Consumer agents use a deep understanding of individual customers and their unique contexts to become more and more proactive in helping them connect to the most relevant products. Amazon and subscription models like Birchbox have developed consumer agent capabilities by leveraging technology to understand consumer needs, then recommending options that address those needs.
Once retailers and marketers understand which role their company plays, they can more readily adapt to how they market their company’s offerings. They also prepare themselves to notice and react to shifts in consumer attitude and mindsets.Marketers will also need to integrate their efforts with traditional customer support systems. There is an often-untapped opportunity for further meaningful consumer engagement before, during, and after purchase. Marketers that nurture these support ecosystems can derive real value from the engagement by offering advice, recommendations, and upselling additional products.This big shift may seem like it demands a dramatic change in approach. However, our research has found that focusing on “scaling the edges”—starting off with a small budget and a small test campaign—can demonstrate the effectiveness of a new approach to your broader organization that can then scale. It’s not only a more manageable approach than trying to rewrite the entire organizational roadmap at once, it also allows for your organization to be more agile as the landscape continues to evolve in the future.
To learn more about retail trends and the Big Shift, read Deloitte’s report, Retail transformation: Cultivating choice, experience, and trust.