The retail sector, as we know it today, is facing a change that will fundamentally change this sector. There are two market drivers that have redefined and will continue to shape the industry as a whole: the new digital customer and a new kind of competition.
The new digital customer
The typical customer that retailers face today is digitally networked, knows their needs and desires accurately, is well-informed, and demands a unique shopping experience, the “extra mile.” These claims will establish themselves as the norm, above all else Millennials will soon become the main consumer group with a high purchasing power Retailers need to take into account that the shopping spree can start and end in any customer-selected channel – desktop, smartphone, tablet or store – and must ensure that they are present wherever the customer is.
In 2015, as many as 92 percent of shoppers used a digital device before or during their product search shopping spree. Seamless advice that provides customers with great service regardless of the channels and rewards them for their loyalty will be the key element in promoting brand loyalty.
This omnipresent presence is called omnichannel and is designed to guarantee that customers are consistent and comprehensive customer experience is offered. Omni-Channel is not just a new buzzword or an optional way for particularly innovative entrants. It is the new – and only –
way to run a retail business. But it’s not just the customers, their way of shopping and how they interact with a brand that have changed, but also the competition that is forcing existing companies to change their market presence and create a consistent omnichannel channel.
The new competition
A number of factors are removing barriers to entry into retail markets: rapid technological development, universal access to information, increasing the size of venture capital funds and less restrictive regulatory requirements. While it used to take a considerable amount of time,
money and human capital to open a retail store, today an online store selling products from a variety of brands and manufacturers can be set up within a few days.
Retailers need to be aware that the real threat in the future is no longer only from traditional competitors, but also from the flood of small and young businesses, which are increasingly entering the market. These new players pursue a customer-centric approach Approach – the customer is at the center of all their activities – and provide customer value through revenue from pure sell-off. For example, models that rely on “sharing rather than owning”, personalization and tailored offerings instead of generic products and services (eg Outfittery), and centralized marketplaces revolutionize fashion retailing in the direction of having less, getting the latest products with no or little upfront cost, getting personalized advice and getting the job done as quickly and easily as possible, the new competitors mentioned above are in a position to immediately analyze their business model, processes and processes and can therefore respond very quickly to changing customer needs.
What is needed
Retailers need to constantly redefine who they are, how they operate, what benefits they offer customer, and how they position themselves in a highly competitive marketplace. The good news is that new businesses often lack the experience, the catchment area, the customer base, and the resources that traditional players have. Established retailers need to leverage this advantage to create a competitive advantage and a unique customer experience. In the following pages, we present eleven predictions on how retailers will change and what businesses need to consider as they prepare their businesses for the new omni-channel world.