Today’s retail market is crowded, with many brands struggling to stand out and attract consumer attention. The digital revolution and the era of greater consumer choice has fundamentally changed the way customers and retailers interact. Our highly connected, digital world gives consumers control, with more choice, higher expectations and more power than ever before. Take the explosion of ecommerce as a telling example—consumers often choose online retailers to purchase what they normally would have in a store. And the results show it, as revenue for non-store retailers rose 14.2 percent in June, while department store revenue contracted by 3.7 percent.
It’s the New Retail Economy—a hyper connected, fast-paced, consumer-focused retail industry today. Consumers demand—and often get—the products they want right when they want them. It can seem almost impossible for the average brand to stand out, pushing retailers to compete on things like price.
But it’s a race to the bottom, and it’s unsustainable. Retailers need to think differently about how they create and deliver products in the New Retail Economy. Instead of agonizing over price, can brands instead drive consumers to buy by staying ahead of trends and offering a better product than anyone else? Where does a retailer even start down this path? Here are some of our recommendations:
- Match the speed of the consumer: Consumers don’t shop in a linear way, so why are we developing our consumer products that way? The way in which we create and shop for products in the B2B space is not able to support the new demand—we must change that to be able to bring new products to market, faster.
- Cross the B2B-B2C divide: Retailers need to be more market-driven, more visual and more human when developing new products. They need to be able to take advantage of the new digital, cloud-based technology. After all, every retailer is powered by actual people—we should treat them as such and give them an experience that rivals what we provide consumers. Bridging the chasm between the B2C and B2B sides of the retail business is essential for driving the kind of product innovation helps brands stand out.
- Collaborate with your communities: Having and tapping a strong retail community that connects designers, retailers and suppliers through entire product lifecycle—design, development and delivery— can provide the comprehensive insights that inspire new ideas and lead to your next innovative product.
Success in this highly visual, constantly changing and digitally connected market means retailers and manufacturers need to change, and start working together to keep up with what their customer wants and needs. The retailers that will thrive in this New Retail Economy will be those that focus on the heart of their business: offering great, unique products consumers can’t get anywhere else, rather than slashing price through reduced quality.
To learn more about the New Retail Economy, check out our article in Supply & Demand Chain Executive: Retail Dynasties: What Ruled When and How They Drove Today’s New Retail Economy