Today’s shopper craves authenticity, newness, convenience and creativity
The latest annual Global Powers of Retailing report by Deloitte examines the art and science of customer engagement.
“What was once considered futuristic is now table stakes,” says Deloitte.
“Retail innovators know technology is no longer supplemental to the shopping experience, it is fundamental.”
However, technology alone isn’t enough. Customers are seeking new and surprising products and experiences.
The five trends identified in the report are:
- Less is more. “Customers are defining themselves less by how many things they own and more by how curated their lives are in terms of possessions and experiences,” says Deloitte. Consumption of experiences has outpaced the consumption of goods by a factor of three over the last two years. Deloitte uses the example of Cuyana, a San Francisco based e-commerce retailer which has found a market niche by selling customers high-quality, craftsman-made goods. The success of their “lean closet” approach reflects a change in preferences away from rampant consumption.
- The following economy. Customers are seeking experiences and products that reflect their personal brand they promote on social media. Deloitte says: “The trends toward personalisation and customer experience are not new. What is new is the level to which we define ourselves by the products we buy and the experiences we have. For this, we can thank social media.”
- Retailisation of the world. The maker movement, the sharing economy, and other factors have made it increasingly difficult to define what a retailer is and does. “Non-traditional retailers are developing new business models to serve customer needs, such as subscription services and flash-sales,” says Deloitte. “In 2017 and beyond, market fragmentation in the retail space will continue to grow.”
- On-demand shopping. Deloitte says: “Relevancy will be determined by the ability of retailers to meet the on-demand mindset of the modern consumer.” Amazon and other on-demand delivery options have forever altered expectations. “This year, Amazon joined the list of top 10 global retailers for the first time. Amazon’s growth has been significantly driven by its prime service which attracts younger, higher income customers,” says Deloitte.
- Exponential living. Exponential technologies, such as artificial intelligence, robotics and virtual reality are changing how we live and how we shop. Deloitte says: “Much has been prophesised about the disruption coming from exponential technologies like artificial intelligence, robotics, sensors, and virtual reality. These technologies are no longer futuristic. The most innovative retailers are already using them to enhance interactions with customers and to change the way work gets done.”
“Over the last 20 years we have seen a seismic shift in retail and the customers that retailers serve,” says David White, national leader of Deloitte’s Retail, Wholesale and Distribution Group.
“We are living an era where customers are in the driver’s seat more than ever before and they crave authenticity, newness, convenience, and creativity. We are living in the customer-driven economy.”
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