Not so long ago, retail was all about offering the right products at the right price at the right time. But in today’s integrated consumer-driven marketplace that’s no longer enough. Now it’s about persuading customers to buy into your brand by showing them who you are, what you stand for and why you exist.
In short, it’s about going back to your roots and offering a clear and renewed sense of purpose.
Inside the Future Integrated Marketplace
Today, nearly everything we desire is just a single click away. New points of purchase are proliferating. The home is the fastest-growing retail platform, and the store is just one node in a network of buying opportunities. Digital platforms let customers talk to brands around the clock, and in ways that are so much more personalized, relevant and meaningful than in the past.
That’s changing the very essence of retail. Modern retailers need to prioritize the dynamic relationship between consumer and merchant. They need to be in tune with the fact that consumers today are looking to buy something they desire from someone they trust. They want to feel a connection with a brand that shares their values.
That calls for very different offering, selling and operating models. And it calls for a clearly defined purpose. After all, that’s how a brand communicates what it represents and why it’s here. Crucially, a revitalized sense of purpose shows customers that a retailer can be trusted to provide what they desire.
Moreover, the expansion of customer touch-points will force retailers to transition their distribution strategies from fixed real-estate portfolios to dynamic service-led approaches. That doesn’t mean the end of fixed assets in prime locations — these will still serve as brand icons. But it does mean greater reliance on lower-cost digital plus physical formats that can rapidly adapt to fast-changing markets.
Revitalizing Purpose in the New Integrated Marketplace
Massive changes in information flows, technology and communication, redefined customer expectations and ubiquitous points of influence and sale create ripe opportunities for retailers to serve a meaningful purpose in consumers’ lives.
Retailers with purpose can become consumers’ trusted partners. But doing so takes an ability to constantly realign the company’s offering with the consumer’s desire. And it means asking the right questions:
• What’s my customer’s true purpose? Not what they want to buy but what they desire.
• Which offerings will serve that purpose? The right mix of products, partners and services to fulfill customers’ desires.
• How do I serve this purpose? Engagement platforms, ecosystem partners, intelligent agents and predictive automation.
In the end, a company’s purpose informs every decision about how and what it sells, how it competes and how it operates. A well-defined purpose is a magnet that draws customers to buy what they desire from someone they trust. It means they’re doing more than simply purchasing a product or service – they’re buying into the brand.
Bringing Purpose to Life
The integrated marketplace calls for near real-time content and messaging which captures true insights into consumers’ past, present and future desires. That means engaging in frequent interactions. But, while digital leaders have always achieved that degree of connection, most traditional retailers and brands have far less frequent contact with consumers — on average just once a year.
For retailers with the ability to deliver daily consumer interaction, the path is self-evident: continue to scale their brands via ad-serving platforms. But the rest also have clear choices:
• Partner with brands and other retailers serving the same consumers; or
• Create their own services that generate high-frequency interactions with consumers.
To avoid losing traction, relevance and trust, retailers also need to become predictive in their ability to anticipate and deliver to consumers’ desires. To do so, they must take advantage of the increasing availability and richness of data, analytics and AI. That will help them plan ahead to deliver the right offer to the right customer at the right time. With this new clarity, retailers will be able to use AI in real time to drive LTV yield, essentially evolving from digital marketing to digital selling.
Acting With Purpose
To thrive in the new, retailers need to rethink how they operate. We believe there are three dimensions to focus on.
First, the move from one or two channels to multiple channels requires integrated P&Ls that reflect this new environment. That’s particularly important when ultimate performance will be determined by how well an enterprise can dynamically deploy opex and capex to drive LTV yield from every household and market region.
Next, it’s inevitable that the historic leverage ratios of legacy retail will be unsustainable. AI provides the answer. Over the next five years, AI will automate most back-office processes as well as optimising core planning and execution functions. Robotics and automation will similarly drive profound changes in supply chain and logistics activity.
And finally, it is about looking at people. While AI will transform historical leverage and remove costs, in the new market consumer-facing employees will in fact become even more important and much better enabled. Having people augmented by AI and intelligent agents, will directly impact the way consumers will interact with both the brand and the store staff. AI/human integration will deliver new levels of always-on, responsive services that support and delight consumers. Service marketplaces will provide seamless integration for consumers between the products they buy and the services they need. And when it comes to store staffing, AI can enable new ways for store employees bid and sign up for shifts putting them more in control of their time.
The market is tough. Being a retailer has never been more challenging, but those that can define their own unique reason for being and truly deliver on their brand promise have a chance to thrive.
Jill Standish is senior managing director and head of Accenture’s retail practice.