Conventional solutions to an unconventional new world order

 

Conventional solutions to an unconventional new world order
Consumers' desire for individuality is demanding a more personalised experience from brands.

Dubai - New era of interaction, engagement seen in Retail 3.0

By Krishan Kumar Chutani
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Published: Wed 23 Jan 2019, 7:15 PM

Last updated: Wed 23 Jan 2019, 9:22 PM

With the advent of Retail 3.0, we are seeing a new era of interaction and engagement between brands and consumers.
As the lines between the offline world of mom-and-pop stores, modern trade retailers and online-only brands combine, brands face a difficult journey when vying for limited mind space of consumers. Both offline and online consumers face issues, with offline retailers feeling the pressure of fierce pricing and nimbleness of the online world, while online retailers are now realising the vast foothold brick-and-mortar has on consumers.
Consumers have revolutionised the way they perceive brands and the retail experience. For the modern-day consumer, shopping online feels as natural today as going to a physical retailer did in decades' bygone. With the ease of access to global information on brands and products, the consumer has become aware, curious and more demanding from brands. It is not hard to miss young consumers looking at product prices and reviews online while standing in retail stores.
A defining factor of this change for both brands and consumers has been the availability and accessibility of information. The democratisation of data is aiding smaller, younger brands to benefit from category, consumer and product insights, which earlier were limited only to bigger, well-established brands. Consumers also have a wealth of information from all corners of the world at their fingertips. Thus, they now demand more from brands and are challenging brands locally and globally. No mediocre product or communication is now acceptable to this ultra-aware, always-on consumer.
In an effort to bridge the gaps, we are seeing a multitude of brands adopting nascent technological innovations, but without properly considering this adoption against the emergence of a new, revolutionized Retail 3.0 consumer. Thus, this chaotic adoption of new tech won't translate into the effective fulfillment of consumer demands and expectations.
Worldwide, Retail 3.0 requires retailers to take an omnipresent, omni-channel and omniscient approach towards retail strategy in order to solve consumer needs. This needs to be backed by a conventional approach to investment behind brands, consumer engagement and a strong innovation pipeline to effectively marry brand legacies with new technology to achieve a 360-degree, evidence-based value proposition.
In light of the evolving retail landscape, here are three points that brands can embrace to stay relevant and resonant:
Reducing friction - the rise of the seamless user experience
Although brands are registering their presence both online and offline, consumers are left yearning a cohesive retail experience to combine the best of both worlds. This want is led by the digitally-savvy Gen-Z and millennial consumers, which will soon become the dominant force of spending in retail. The fourth annual JDA Software report, prepared by PricewaterhouseCoopers, found that just 12 per cent of 350 retailers surveyed provided a seamless shopping experience across channels. Though foretold prophecies regarding the death of physical stores exist, these are negated in eMarketer's findings, which reveal that 90 per cent of retail transactions are still taking place in the physical world; this industry truth is even more significant for offline-heavy brands which will have to focus on evolving their experience and reduce consumer touchpoint gaps.
Seamless digital and physical touchpoints are thus essential to achieve positive customer experiences. Alongside technological capabilities, retailers will be able to make use of droves of data to deliver a more enriched and personalised experience to consumers. Looking ahead, strong brands will emerge that satisfy the need for strong customer experiences along with price and product differentiation in the coming years, especially with the accessibility of new technologies. Because of the disruptive propensities that can arise with new technology, the best way will be to merge these with multi-pronged retail strategies and online-offline approaches to intelligently impact the consumer path to purchase and the omni-channel journey. By establishing a well-derived mix of commerce formats, the varying needs of consumers can be effectively addressed.
Understand your consumer
The lives of consumers have changed drastically in recent years with waning attention spans and an increase in screen time. The consumers, led by a younger generation with higher expectations and access to a greater variety of products, are looking for relevant and useful content and products. They want brands to more than simply provide products. They look for brands who they can connect with, and view brands as an extension and expression of their individuality.
Consumers' desire for individuality is demanding a more personalised experience from brands. Historically, they have demanded a personalised experience, for example from the local grocer who knew them by name, or the tailor who would remember their precise shirt seam length. In today's world, brands are offering a more intimate experience for consumers due to the wealth of information available to them. Consumers likes, dislikes, habits and characteristics are just some of the elements a brand knows about a consumer. Global players like Amazon, Netflix and Ixigo are predicting the next possible purchase for each and every of their consumers, shaping micro-strategies to position their brands in the minds of the consumers.
When it comes to shopping, consumers are also looking for convenience and are constantly on the lookout to reduce store visits for mundane items. With trips to retail stores reduced to being purely for shopping purposes, brands will need to turn stores into experience-based centers and understand that each format, from e-commerce to company-owned stores, will play a unique role in the consumer's life. This will also be impacted by the various product categories. As per the Symphony Retail report on 'Supermarket 2020', bulky purchases such as diapers and washing powder will shift to the e-commerce space due to the ease offered by home delivery, while everyday purchases like groceries will continue in physical stores.
Reinvent and innovate to stay relevant

The world of e-commerce has thrived on a diversity of activity since it emerged in Retail 2.0. As the online-offline relationship has steadied, many retailers have experienced difficulty in terms of volume and the ability to make this accessible and actionable to drive sales. Variety and differentiation in offerings have enabled the growth of online against the Goliaths of offline and this is leading growth rates. While many legacy retailers struggle to remain relevant in today's fast-moving environment, companies like IBM provide a poignant example of how to continue raising the bar for innovation through continued reinvention and incorporating digital initiatives that tap into over a century's worth of data to generate insights and future value propositions.
Firstly, brands will have to tap into the plethora of information carried down through different cultural and social practices within the consumer ecosystem. Secondly, there is an imperative for researching the changes happening around the consumers and the alterations to the consumer's journey, needs and wants. With these two lenses, brands can harness effective, evidence-based product propositions as the momentum of artificially-intelligent technology transpires to change the world of retail. Legacy brands like Nivea and new-age brands like Fogg are innovating product categories to increase product relevance to consumers, while technologies like Blippar media are helping brands showcase their products in innovative, effective ways. These continuous innovations with constant and consistent communication will be the way forward to showcase brand relevance to consumers.
In view of the above considerations, we can conclude that the prospects of the next evolution of retail go hand-in-hand with consumers' demand for an evolved format. We are living in unconventional times, where Davids and Goliaths walk shoulder-to-shoulder. Although technology will continue to change the way we live, we must remember that retail will change to newer audiences, audiences will demand more from brands, and brands will have to win the trust of these consumers.
No matter the retail platform or the omni-channel strategy in place, we can continuously build the engagement of consumers' hearts and minds by pairing legacy and innovation to generate customer-driven value propositions that create long-term resonance. Although everything is changing, nothing is changing.
The writer is CEO of Dabur International. Views expressed are his own and do not reflect the newspaper's policy.


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