Proactive retailers act on societal changes impacting consumer behavior

The retail sector stands out as an industry with a seismic shift in its challenges and opportunities. It has navigated uncharted territory with revamped regulations, unprecedented tactics and a perpetually evolving consumer base. With such a dynamic field of play, all retailers must be agile and proactive in adapting and conquering the market's changing needs.

This requires a holistic approach encompassing every aspect of the consumer experience, from marketing and sales to customer service and after-sales support. Retail businesses must prioritize transparency, authenticity and social responsibility and engage with consumers through channels that resonate with their values and preferences.

Key retail scenarios

Certain megatrends represent significant and long-lasting shifts reshaping the way retailers operate. The pivotal scenarios below demonstrating a profound impact on a retailer's business strategy and overall success:

• Consumerism and anti-consumerism movement: On the consumerism versus anti-consumerism scale, retailers will find a plethora of challenges and opportunities to conquer to find the right balance. While those on the side of consumerism demand a constant supply of high-quality products and services, the anti-consumerism champions remain vocal about eco-friendly and sustainable commodities and amenities. Retail players must inculcate business practices that enable them to provide high-quality goods and services to their customers while ensuring less wastage and environmental sustainability.
• The chemistry among digital only, physical only or everything in between: Some retailers are adopting an all-online approach, closing physical stores and focusing exclusively on e-commerce. Others are doubling down on physical stores, offering immersive in-store experiences that leverage technology to enhance the shopping experience. Finally, some retailers have successfully tread down the fine line between brick-and-mortar stores and e-commerce. The best business path for these retailers is seen toward their investment in hybrid models, including physical and online storefronts. 
• The growing demand for unified commerce processes: Retailers must achieve seamless integration of all their consumer sales channels, including online portals, mobile devices, social media and brick-and-mortar stores. Today, consumers are constantly demanding convenience and flexibility across all retail environments available to them. As such, it has become increasingly crucial for retailer businesses to provide a seamless and consistent shopping experience, regardless of how their customers choose to interact with them.
• The desire toward driving customer centricity: Retailers who prioritize customer centricity are rewarded with increased patronage, loyalty and favorable brand reputation. This can be achieved by providing tailor-made products and services that fulfill customer needs and desires. In addition, adopting a customer-centric approach yields higher operational efficiency by optimizing product and service offerings to align with customers' top priorities. As a result, such businesses can streamline their operations, allocate resources efficiently and deliver unparalleled value to their customers.

Call to action

To remain aligned with the changing expectations of consumers, retail organizations must undertake several essential measures to augment their business agility and flexibility: 

• Unlock business value through intelligent technology integration: Retailers must assess their business requirements and identify the areas that need improvement. Then, they can determine what technologies will help them address these requirements effectively. For example, a retailer may need to integrate its inventory management system and e-commerce platform to provide real-time inventory information to customers. The retailer may need to invest in technologies such as RFID tags or cloud-based inventory management software to achieve this.
• Smart tech choices while balancing customer and business needs: While technology can help improve the consumer experience, it can also be costly. Therefore, retailers must identify the technologies that will significantly impact their customers' experience and prioritize these investments accordingly. For instance, a retailer may prioritize investments in mobile payment solutions over investments in new point-of-sale systems, as mobile payments are becoming increasingly popular among customers.
• Deeper collaboration to drive retail innovation: A retail enterprise with siloed business units may need help achieving its key business objectives. To attain success, it is vital for leadership teams — encompassing IT, business and operations leaders — to engage in close communication and collaboration. By working in concert, implementing effective business strategies within a retail organization is much more likely to be achieved.

What’s next: Expect retailers to look at ways to limit the complexity of their business operations to stay more agile in response to ever-changing consumers and conditions. Streamlining operations and removing duplicative activities can help the industry to weather uncertainty.