Changes in consumer behavior, driven by an always-online lifestyle, are forcing retailers to rethink age-old practices across their organizations. The continuously evolving digital landscape is resulting in an age of hyper change where the old way of doing things is simply no longer going to cut it.
When searching for inspiration, we are much likely to turn to Instagram, Houzz, Snapchat and Pinterest than browsing through retailers’ meticulously merchandized category tree. Indeed, the idea of starting to research a product on the web site of a specific retailer is almost alien to Millennials, who are far more likely to start their path to purchase on social channels or Google.
For the digital native, social engagement and engaging content provides the inspiration for the purchase decision and then guides them in the direction of where they can seek out retailers to satisfy their need for instant gratification. Retailers without the assortment breadth and exposure to emerging consumer channels are risking a harsh reality where they miss out on growth that naturally follows new consumer behavior.
Only Amazon can honestly claim to be a one-stop destination — both a retailer and a first stop for consumers researching purchases. Shoppers are now finding their inspiration from authentic sources that are free from the bias of the online shopkeeper. Retailers are now unlikely to influence consumers’ tastes as they could back in the good old days.
Online stores with large product assortments have a much better chance of competing in a war for the attention of their future customers. Forget webrooming and showrooming, sophisticated users now seamlessly drift between the two.
Over the years many retailers have attempted to compete with new market entrants by doubling down in their traditional roles as tastemakers. When consumer choice was restricted by the physical constraints of a downtown showroom, the curated approach made sense — homing in on the touch and feel of specific items added real value for consumers. But online those physical constraints vanish and consumers expect an endless aisle of choices. E-commerce changed the game once and the ever-changing digital world will ensure that the playing field continues to evolve.
To dismiss the digital transformation as just another buzzword would be incredibly foolish. We are rapidly approaching an era where only retailers that can leverage data and analytics to select large numbers of relevant products efficiently will thrive. The demise of Kodak and Blockbuster video was just the beginning of many warning signs of how even established household names need to evolve or perish.
The fact that Amazon has over 400 million products available for sale compared to Walmart’s 60 million speaks volumes. In essence, the role of the retailer is shifting from curator to marketer and assortment analyst.
Consumers are not only changing where they shop, they are changing how they do it. There is already a realization that we are heading towards a mobile-first marketplace. However, the reality for retailers is that their customers are suffering from app fatigue and will have little interest in adding an app they won’t use to their smartphone.
Most users will spend much of their time using the same handful of mobile apps. Everything else will be left neglected on page 2 of their phones, which is the modern equivalent of not appearing on the first page of Google’s search results.
One-stop mobile marketplaces for fashion such as Spring are increasingly changing the game too. With 3,000 brands in its arsenal, they can group all popular brands under one roof combined with the all-important easy and secure checkout with minimal clicks or swipes.
Curation was a necessity for retailers because physical stores can only fit so many products into their bricks-and-mortar stores. These constraints disappear online, but a new set of challenges are starting to emerge. For example, how can a retailer effectively discover and source a massive number of products that are consistent with the consumer’s expectations that are equally fitting to the brand image?
Smart retailers are already leveraging competitive intelligence data and analytics to discover products they should be selling. This new approach enables retailers to leverage web-based content management tools to prepare products for sale on their web sites in real-time.
However, very few retailers are able to make significant capital investments into inventory. The only realistic strategy for many is the use of drop-shipping to fulfill the evolving product demands from increasingly demanding consumers.
The combination of a large assortment of relevant products combined with a capital efficient way to fulfill orders is the secret sauce to success in a digital age. There is no longer a place for outdated business models in the retail landscape, whether it be online or offline.
We have arrived in a new era where both content and the customer continue to rule the digital landscape. Retailers now need to start thinking outside of their physical store, website, and mobile app. Consumers are no longer looking to retailers for inspiration, but are using their own trusted, authentic channels.
For retailers to have any chance of remaining relevant in the eyes of their audience, they need to think bigger than curation and become a marketer and assortment analyst too.
Erik Morton is senior vice president of strategic development at CommerceHub.
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