You don't have to wait to witness the future of retail. As you read this, new models and experiences are taking shape across digital retail platforms and brick-and-mortar stores alike. The challenge is no longer about predicting how customers will change but catching up to where (and how) they're doing business.
It can be hard to keep pace—especially when one effect of the global public health crisis has been to accelerate key trends and technologies. From my perspective, the way to run—and win—this race is to understand how customer habits and preferences are evolving and build your business in such a way that it is thoroughly connected, both with itself and with the market.
KPMG has been following the retail transformation closely. And in developing our 2021 report, Future of Retail: Transitioning from 'retail' to 'consumer commerce', we've homed in on several "drivers of consumption that will shape consumer purchasing decisions": value, convenience, experience, choice, privacy and security, and purpose.
All of these are, and will continue to be, important to understand and address, especially for niche or smaller companies looking to expand their market presence and grow. But in my opinion, four of these drivers are especially critical and demand a particular approach. If your business is looking to up its game, start with the following.
Give them choice
Today's customers have easier access to more information to guide their shopping choices than they ever have. This has allowed them to become ever-savvier consumers. They want the best product for the best price, and they know exactly how to find it.
Meanwhile, there's no way for retailers to "compete on choice" other than to actually provide it. And that's going to come down to your supply chain. The more digitized and connected your supply chain, the quicker and more effectively you can spot customer trends as they emerge, predict future demand with greater accuracy, and work with your vendors to respond. Importantly, having a connected digital supply chain during times like these is essential to navigating the product delays and added costs that have become common throughout the pandemic.
That's because a well-designed digital supply chain allows you to offer the best value while reducing shipment costs, increasing product quality, hitting fill rates, and ramping up turnover.
Make it convenient
Consumers today want their shopping experiences to be as quick and frictionless as possible. They want to order the latest technology or a quick ride in as few "clicks" as possible, and to make their brick-and-mortar experiences fast, safe, and hassle-free.
There is no magic bullet for convenience. Each organization must first understand when, where, and how their customers prefer to interact (a.k.a. the "customer journey") and build solutions to match.
Convenience is critical, but there can be no shortcuts. It's not enough to cobble together a website or app and claim victory. Online channels need to be linked to supply chains and sales supports so that customers know exactly what's in stock in the moment, giving them to confidence to order what they want without jumping through hoops. Here again, the best customer journeys are seamless and satisfying.
Make it an experience
Online competition can be fierce, but it is not insurmountable. Competing with the online retail giants means creating physical and digital (a.k.a. "phygital") experiences that online-only platforms in particular cannot easily replicate. Examples of phygital experiences are already out there. They include high-end retail brands that send salespeople with inventory directly to customers' homes, clothing stores that provide unique ways to test their goods, or cosmetic retailers that provide hands-on demos.
Make it safe
Customers may be searching for faster and more convenient digital experiences, but not necessarily at the expense of their personal data. They've read the headlines. They know the risks. Now, most are willing to trade their data only if they receive fair value in return and their security is assured. Understanding this, retailers must show they are taking their customers' data privacy and security seriously and ensure all sides are entering transactions with eyes wide open. This is as true online as it is in-store, where electronic payments are standard and where physical health and safety are also critical to the customer experience.
It's a rapidly transforming world for retailers, and it's not slowing down. These are just some of the ways the game is changing. In future blogs, I'll take a closer look at the trends, models, and long-term strategies now defining the future of retail.