Impact of the customer-driven economy on retail business strategies

Over the last 20 years we have seen a seismic shift in retail and the customers that retailers serve. Globally, we are living in an era where customers are in the driver’s seat more than ever before and they are craving authenticity, newness, convenience, and creativity – we are living in the customer-driven economy. What does this mean for retail business strategies?

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. Traditional fast-fashion retailer H&M is responding by launching programs like “H&M Conscious” which will debut a new Conscious

Exclusive collection of high-end, environmentally friendly pieces each year.

“Following” economy
Customers worldwide are busy “following” celebrities and brands on social media and simultaneously building their own “following.” They want authentic, sharable experiences to further their personal brand. Retailers that can consistently deliver these moments will likely grow a fiercely loyal customer base.

“Retailization” of the world
In years past, it was easy to spot a retailer. It bought and sold goods, either in store or online. 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.

On-demand shopping and fulfillment
Relevancy will be determined by the ability of retailers to meet the on-demand mindset of the modern customer. Amazon and other on-demand delivery options have forever altered customer expectations for fulfillment. Speed alone, however, will not be enough to compete. Consumers have been conditioned to expect a high-quality, on-demand shopping experience

Exponential living.
Exponential technologies, like artificial intelligence, robotics and virtual reality are changing how we live and how we will shop. 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.

The Global Powers of Retailing 2017 discusses these and more; exploring the art and science of customer engagement to help retailers design fresh experiences and strengthen customer loyalty.

Contact us to further explore these trends, and how they may affect your business.

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