The 6 Traits of Winning Retailers in the New Age of Uncertainty
How can retailers succeed in this new era of inflation, economic uncertainty and lightning-fast technological change? What companies will succeed, and which ones will fall behind?
Of course, without a crystal ball, it's impossible to be sure. But looking at the emerging trends in retailing over recent years, a picture begins to emerge of those companies that are prepared to grow and even flourish in this challenging environment.
The Winners Will Be Consumer-Obsessed Companies With Ultra-Personalized Products
Consumers will expect brands to offer them precisely the right options at exactly the right times. With fewer dollars to spare, shoppers will become even more selective and demand that products and services speak directly to their preferences and lifestyles. Fortunately, innovative technologies and artificial intelligence integrations are giving brands the power to do so by providing a deeper understanding of the preferences of individual consumers.
Retailers will have to make satisfying the consumer nothing less than an obsession. However, becoming a consumer-obsessed company is far more complicated than simply introducing a few new process innovations or an AI integration. It requires a culture of nimble and ever-morphing responses to customers’ changing needs.
The Winners Will Liberate Decision Making From the C-Suite
In the coming era of retailing, there will be no place for top-down decision making. Those companies that wait for the C-suite — or the levels just below the C-suite — to make all the major decisions will be defeated. To respond to fast-changing consumer tastes and the varied needs of individual consumers, companies will have to push decision making down into the organization, closer to the front lines of battle.
There are some relatively young companies, like Netflix (founded in 1997), that have always understood the dangers of top-down decision making. Netflix has been able to respond quickly to consumer demands. But even some older companies have learned the secret of empowering those close to the front lines. Nike (founded in 1964) is one company that has never lost touch with its customers. Nor has it hesitated to make quick decisions on the basis of new and fast-changing information.
For example, Nike was one of the first major brands to commit to selling its products on an upstart site called Amazon.com. It was also one of the first major brands to yank its products off of Amazon when Nike recognized that it was Amazon, not Nike, that was gaining advantage from access to customer data. In making both decisions, it was far ahead of the competition.
Winning Companies Will Offer High Quality Before Low Prices
It may sound counterintuitive, but consumers in this new age are likely to want to spend more if it's a product of quality. The inconvenience of returning products and the cost of replacing those products that wear out quickly will take its toll on companies that have vied for profits with cheap, low-quality offerings.
For example, companies that have ridden the wave of “fast-fashion” — i.e., producing cheaply made garments designed to be worn a few times and tossed away — will face an increasingly disenchanted customer base. They will also contend with protests from unions and environmentalists who say such products support substandard working conditions in poor nations and contribute to global warming.
Winning Companies Will Offer Transparency
Customers will want to know more about what they're buying, what it contains and where it came from. Take, for example, the challenge of buying organic products. The definition of organic has changed so many times over the past decade that I'm not really sure what I'm getting when I buy a quart of organic milk. Add to that the question of sourcing. With a globalized economy, a product may be coming from just about anywhere. And if a bottle of vitamins comes from anywhere, couldn’t it contain just about anything?
Brands and retailers will find that building a more transparent customer experience will be of growing importance. Consumers will reward those brands that can assure them of what they're getting with each purchase.
Winning Companies Will Welcome the Metaverse
In 1947, there was a great deal of talk in the press about the future of television. But at the time there were only about 44,000 television sets in the U.S. That number swelled to 20 million by 1953. And by 1960, when 90 percent of households had televisions, the technology had profoundly changed society, from the way people spent their time and money to the way they voted for president.
While the exact timing of its adoption is still uncertain, the metaverse today may be comparable to television in the late 1940s. Speculation about the metaverse is widespread in the media and consumers are intrigued — with one in five (20 percent) respondents saying they've shopped in the metaverse, according to a Smarty survey. Top brands ranging from Gap to Wendy’s to JP Morgan Chase are moving into the metaverse, snapping up virtual land in virtual worlds that are far more immersive than existing online offerings. It's too early for those brands to actually make money from their metaverse investments, but the brands that have moved in say it's a great marketing tool to stimulate consumers in the real world. In the not-too-distant future, having an effective presence in the metaverse will be as essential to retailers as having a website is now.
Winning Companies Will Be Prepared to Grow in a Decentralized World
Today, Amazon, Facebook, Google, and a handful of other companies control key channels and large swaths of the retailer’s world. To play, one has to play by their rules. However, with the rise of the metaverse and blockchain, technologies that are by definition decentralized, things will look quite different. No one will be in charge. No megacompany or group of large companies will dominate. This will create a host of new opportunities for players to grow and thrive if they brilliantly serve their customers’ needs.
Vipin Porwal is the founder and CEO of Smarty, a premiere shopping destination that makes online shopping time- and cost-efficient by eliminating the endless search for coupons and promo codes.
Related story: The Future of Retail: Trends for 2022 and Beyond
Vipin Porwal is the founder and CEO of Smarty, a premiere shopping destination that makes online shopping time- and cost-efficient by eliminating the endless search for coupons and promo codes. Smarty adds the best coupons and codes directly into the user’s shopping cart. Porwal is also an entrepreneur with more than 20 years of experience in finance and consumer technology.