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As the shift to digital accelerates and more of their business moves online, retailers have invested in developing a more digital first approach, both in terms of the need to be digital-by-design and being more thoughtful about the customer experience in general.
During the pandemic social commerce rapidly accelerated, offering integrated shopping experiences on a social media platform. This offers shoppers an even more seamless way to shop online. Instead of clicking through to a third-party website, users can make purchases right from the social media app or site.

For companies with physical locations facing declining demand, retailers are distinguishing themselves from online-only retailers by providing unique in-store experiences, that are both immersive and ‘Instagrammable’. For example, Nike’s Time Square flagship store which has a basketball court with cameras to record shots and treadmills with screens mimicking famous running routes. 1

Key trends

The pandemic has led to significant changes in the decision criteria consumers use to choose a supplier. In the non-grocery sectors, there are three clear drivers of choice, accelerated over the last 18 months:

  • The health of the consumer: as consumers have been forced to think about their health, they are increasingly concerned about being fitter, healthier, and better. They are gravitating towards companies that can demonstrate how their offerings enable healthy lifestyle choices. This is fueling companies such as Nike who are focused on fitness and healthy living rather than just selling sportswear.
  • The health of the planet: concern about disposable plastics, packaging, CO2 and other areas of sustainability are at an elevated level. De-carbonization has become a major focus with increasing commitments being made as to when Net Zero will be achieved. In the research some two thirds of customers say they are willing to pay more for goods that demonstrate they are planet friendly.
  • The quality of the digital experience: as consumers of all ages have become proficient at using digital channels it has become core to the customer relationship. Consumers have high expectations of the digital experience which have been set by companies such as Amazon.

The consumer is now multimodal, keen to use whatever is the most convenient approach at any point in time. The need to physically engage with the products on offer in-store has become less and consumers are increasingly happy with a hybrid approach. The challenge for the retailers now is understanding these multiple touchpoints - knowing when the customer is shopping in-store and online and making sure the data enables real-time decisioning about offers, products and services.

The key trends across The Six Pillars are as follows:

Integrity
Transparency, values, and ethics have never been more important to shoppers. The KPMG Global COVID 19 tracker showed that 71% of shoppers want to buy from companies that share their values, and 41% of consumers actively seek to buy from a company associated with social, environmental, and political ideals. You can find out more here.

Resolution
To meet customer needs for rapid responses, more and more retailers are turning to chatbots and AI driven devices. Whilst this can be an efficient way to cover greater volume for lower cost, it can also be a source of customer irritation if not executed well.

Expectations
Customer expectations for shipping times are only getting faster. First came 2-day, then next-day, then same-day with Walmart in the US expanding their two-hour express delivery options.

Time and Effort
Some brands, like Lego, have even created digital shopping assistants, which give customers personalized gift recommendations based on their answers to a few simple questions. Once a user decides on a product, the chatbot directs them to the website where they can complete the purchase.

Personalization
There is a growing focus on personalized product recommendations and going beyond traditional points-based loyalty schemes into much more customizable and personally relevant applications. Retailers talk about being able to know the customer’s preferences even before they walk through the (physical or digital) door.

Empathy
COVID 19 has driven the emergence of empathetic retail, how businesses can connect with consumers by promoting progressive policies and taking compassionate actions. Authenticity is key here, consumers are on the look-out for green-washing and other exaggerations.

The Customer Experience Leaders

Industry leaders Fielman and Martinus have pioneered digital interactions and smart technology in their individual fields. For Fielmann it has been 360 degree augmented reality for its eyecare business, for book seller Martinus it is communicating the love of reading over digital platforms and for Amazon it has been a concerted effort to make everything online easier.

Lush has sought to use its campaigning style to change mindsets in the areas of sustainability and ethics since its inception. During the pandemic, it has attempted to modernize its digital offerings via the launch of a 24/7 digital personal shopper service with digital ethics at its core.

The power of omnichannel experiences comes to the fore for Mecca. The online beauty brand's ongoing commitment to customer and employee experience has driven a successful path through the COVID period and set the standards for future growth. Putting the emphasis on customer and employee experience and, more recently, driving a rapid acceleration of digital and personalization capability alongside physical retail expansion, has led to its number one position in Australia.

As retail businesses look to the future, they will also need to meet the expectations of increasingly aware and passionate consumers who expect today’s businesses and brands to stand for something bigger than merely the products and services they sell. A clear purpose has become essential to defining for consumers why a business exists and the positive impact it can have on their lives, society and the environment.

René Vader
Global Head of Consumer & Retail
KPMG

  

Non-grocery retail industry Hall of Fame 2021

Allegro


Poland

FarmaciaTei.ro


Romania

Fielmann


Germany

Fielmann


Austria

John Lewis & Partners


United Kingdom

Leading online retailer


Italy

Leading online retailer


Spain

Lush


United Kingdom

Martinus


Slovakia

Mecca


Australia

*Brands are listed in alphabetical order

  

1 https://qz.com/836671/nikes-new-store-in-new-york-has-a-basketball-court-where-you-can-test-drive-their-shoes/