Retail trends: Customer centricity shift to stick has been saved
Retail trends: Customer centricity shift to stick
Rethinking retail stores for differentiation and growth
Online shopping trends—accelerated by the COVID-19 pandemic—have prompted retail and consumer products companies to rethink their approach to creating memorable, innovative, and customer-centric shopping experiences. To succeed, today’s retailers should draw on a personalized, omnichannel strategy that’s both digital and in-store.
- The rise of a customer-centric ecosystem
- The store: Past, present, future
- Expectations of convenience
- The new consumer retail environment
- Download the full report
The rise of a customer-centric ecosystem
An evolving economic environment of financial pressures, rising educational and healthcare costs, and, above all, new technology-aided competitive options is reshaping consumer behavior. The pandemic accelerated some retail trends and made others seemingly permanent while forcing a reconsideration of what “personal” means when it comes to shopping.
Retailers must reimagine how to create a holistic, tailored shopping experience, enabling customer-centric journey touchpoints. Successful omnichannel retail is about recognizing how customers are thinking and behaving, starting with seeing how people toggle between—and blend—shopping online and in stores.
Leaders will see these channels as complementary in the customer-centric ecosystem they are creating.
The store: Past, present, future
In the mid-2010s, many retailers steadily increased investment in e-commerce. Some noted a “retail apocalypse” was occurring, as store closures and bankruptcies increased from 2017-2020. But retailers are responding to shifting consumer demands, and a retail renaissance of sorts is catalyzing a reverse in the store closure trend.
In fact, retailers opened more stores than they closed in 2021 as they looked to capitalize on revised approaches to convenience, product strategy, pricing, and in-store experiences. And after months of online ordering and opening cardboard boxes, consumers recognized that physical stores offer benefits that no app or website can match: hands-on product demonstrations, easy pickups and returns, expert support and advice, convenience, and immediacy.
Stores should serve as a tool to help strengthen brand relevance, reinforce confidence in selection and quality, and enhance in-store customer experience, effectively encouraging consumers to build emotional connections with brands and local communities.
Expectations of convenience
Before the rise of online shopping trends, the customer experience was generally linear and somewhat contained. Consumers largely associated retail convenience with store location and operating hours: How far do I have to drive to run that shopping errand? Now, technology is “always on,” which allows customers to experience virtually every step of the retail journey simultaneously—whether at home or in-store.
The explosion of retail channels has raised expectations to sky-high level. Consumers are taking for granted the ability to buy just about anything, 24/7, at a competitive price. Meanwhile, an arms race in consumer retail to provide rapid fulfillment—whether in the physical or digital purchase channel—has stressed retailers’ ability to profitably serve the customer.
The new consumer retail environment: stores and beyond
The future of retail is a blend of online and in-person—a customer-centric shopping environment that’s as personalized as possible. Looking ahead, retailers should adopt a holistic strategy that integrates all channels, including those that have yet to emerge. Stores will increasingly look to technology and data to help shape customer experience, aligning new online and store design with overall customer strategy. They will need to balance, however, overall process execution and the human touch, where needed.
We recommend retailers amplify their strengths by advancing their strategy on convenience, product, and price while looking to differentiate based on personalization, experience, and ecosystems. Flexibility and a long-term view can help retailers create a shopping journey that stays customer-centric no matter who the customer is or where they are shopping from.
Download the full report to learn why retailers should shift to a customer-centric merchandising and pricing strategy to maintain profitability.
The BIG question
Macro trends, from the integration of digital and physical channels to increasing calls for diversity, are upending the marketing function. What can brands learn from their highest-growth counterparts to thrive?