Industry Observations on the Trends and Challenges Retailers Face Today

1. The customer is in the driver’s seat

Everything about today’s customer is changing: the products they want, their habits and behaviors, how they engage with you, and when and where they want to buy. Keeping pace means looking at your business in a completely new way. It means making EVERY decision with the customer in mind, Putting the customer at the center of that process is key to success in today’s competitive landscape.

With an increasing adoption rate of Voice of Consumer Analytics, the industry is increasingly moving towards customer-centricity. Understanding what the customer wants and expects enables retailers to have a full picture of their customer, and take the actions needed to compete effectively.

2. The customer expects a seamless experience

The customer that shops multiple channels is far more valuable and loyal than a single channel shopper. And given that today’s customer wants the same products to be available online and offline, they want and expect their experience to be seamless.

That puts increased pressure on the retailer to recognize their most valuable customers, regardless of the channel they choose to shop.

A robust CRM tool can help retailers centralize data and provide a seamless fluid customer experience. Additionally, many retailers are tapping into robust loyalty programs, recognizing that rewarding customers and building fans are an integral part of optimizing their relationship with their best customers.

3. Brick and mortar isn’t dead

There are more store openings than closings in 2019. According to IHL Group’s recently released report, Retail Renaissance – True Story of Store Openings / Closings, 5-times as many retailers are opening stores as those closing them.

Additionally, as store concepts continue to evolve – more and more retailers are experimenting with technology, location, size and customer service to enhance the customer experience.

Online stores are moving into physical retail, allowing customers to try on products. Warby Parker, Bonobos, and Amazon are great examples.

BOPIS is expanding its reach, enabling retailers to drive store traffic and leverage their inventory across their system.

Forrester Research has estimated that ecommerce will account for 17% of total retail sales with an additional 41% of offline sales influenced by digital.

4. Product innovation as a differentiator

One of retail’s biggest challenges is also a great advantage for consumers – in that consumers have never had more choices or easy access than they have today.

For retailers, the bar has never been higher, and never has it been more important for retailers to truly differentiate themselves through product innovation.

Private label continues to grow at a faster pace than branded product. Successful retailers need great product that is special and differentiated, backed by innovative and differentiated service and marketing. An example is the home textiles industry, and industry innovating by leveraging fabrics designed for the athleisure world for more comfortable sleep.

Creating products that are unique isn’t enough to gain the competitive advantage of product differentiation — the buyer needs to also recognize the value.

5. Sustainability is the new focus

Fashion is the second dirtiest industry in the world next to the oil industry.

Sustainability issues in the supply chain are an increasingly important consideration in shopper purchasing decisions. There is now an active war on waste…resulting in a series of efforts to re-distribute leftover products to where they are needed.

 New ways to recycle and reuse products are being developed throughout the industry to reduce what goes into landfills.

Today’s customers are far more aware of the packaging materials used. They are increasingly rewarding retailers who are working on initiatives to reduce packaging waste, eliminate plastic and move towards goals of 100% recyclable, reusable or compostable packaging. 

6. The growing importance of storytelling in content marketing

Stories share a real experience – you can inform your audience about the way they will benefit from your products through a story. They will understand why they need your product.

To communicate their unique selling proposition, brands and retailers must focus on storytelling that is authentic and understandable.

Storytelling makes you unique…distinguishing you from your competitors. Storytelling adds a human element to your content…they share the same problems and want the solutions. Storytelling helps you create an emotional connection with your customers.

When you promote your brand through a story, you’re not trying to convince the customer to buy your products…you’re sharing an experience and leaving the decision to them.

7. Personalization is key to retail success

Customers are seeking a retail experience that is tailored to their own personal shopping preferences.

An Accenture study shows that 75% of consumers are more likely to buy from a retailer that recognizes them by name, recommends options based on past purchase and knows their purchase history.

Personalization also impacts how a customer views a brand….63% of customers reward brands that gives them content that is more valuable, interesting and relevant.

Digital personalization is relatively easy with the right CRM tools. For brick and mortar stores, understanding their customers and utilizing targeted advertising and reward programs is key to success.

8. Building a diverse and engaged team

Research shows that diversity and inclusion across leadership, the workforce, the workplace culture, and marketing are critical to business success.

A recent study by Deloitte found that companies with an inclusive culture are twice as likely to exceed financial targets, six times more likely to be innovative and agile, and eight times more likely to achieve better business outcomes.

Customers shop based on their own values and needs. A diverse workforce has a better understanding of an increasingly diverse customer base, ensuring that the products and services your company delivers are the right one to meet your customer’s needs.

The need for diverse teams extends across all departments and functions, including merchandising and marketing. Hiring diverse teams to design your products, market your campaigns and manage your online presence ensures that your company values are well represented to your customers.