Mapping the Dynamic Changes Reshaping the Retail Industry

22/06/2023

THE WORLD of retail is fast-paced and ever-changing. Led by consumer demand – which can drastically shift from generation to generation – shops have to keep up with modern-day expectations and trends, creating agile business models to avoid stagnating. But with digital developments and constantly evolving consumer behaviour, how can retailers keep up?

To add insight to the matter, we’ve looked into the dynamic changes reshaping the retail industry and what shops can do to meet current and future expectations. 

Omnichannel Approach and Customer Experience

An omnichannel approach refers to a sales and marketing strategy that spans multiple platforms. For many retailers, that includes a shop and an online eCommerce platform, but it can also encompass social media, email, and third-party marketplaces, like Amazon – to name a few. 

Nowadays, an omnichannel strategy is becoming less of a niche and more of a must. Almost 90% of Gen Z, for example, expect brands to have touchpoints across both physical and digital channels. If you’re currently sticking to one platform to sell and market your retail business, it’s time to change.

But, before you hop onto every platform available, consider that your omnichannel approach has to consistently offer exceptional customer experience. Just one of your channels falling behind will tarnish your brand image and could turn potential customers away. 

Consumer expectations are high, too. For example, if you use social media, consider that around 40% of consumers expect your brand to respond to their communications on this channel within an hour. On Facebook, that changes to most consumers expecting a reply within 30 minutes.

Before pursuing an omnichannel approach, take the time to map your customer expectations and create a detailed strategy to meet them. 

Cashless (and Cardless) Shopping

In 2021, over 23 million British people used almost no physical cash when shopping. As retailers, the past decade has seen a rise in cashless consumerism, and shops have had to adapt. If you don’t, you’re almost guaranteed to miss out on sales.

Now, though, the way consumers pay has once again evolved. The rise of technology like Apple Pay and Google Pay has created the expectation that consumers will be able to make transactions using a contactless card machine. Where just twenty years ago having a card machine was a choice for retailers, already that system is out of date and retailers must upgrade to contactless machines or risk falling behind. 

The Rise of Value-First Consumerism 

Not all of the dynamic changes reshaping retail are under the umbrella of technology. Millennials and Gen Z are pioneering the rise of value-first consumerism, in which a brand has to make a moral or ethical connection with its audience in order to win them over.

One study uncovered that a huge 84% of Gen Z consumers choose the brands they buy from based on their beliefs. Values that are important to younger consumers include:

  • Inclusivity
  • Diversity
  • Sustainability

Support for black-owned businesses, for example, has seen a major push in recent years, while 87% of millennials are willing to spend more for sustainable products.

As a retail business, it’s important you hold values that your audience will connect with, and have evidence of actions you’re taking to meet them. 

Cutting Back on Free Returns

Free returns have been a growing problem in the retail industry, with companies frequently seeing products returned that they can no longer sell – either because they’ve been unpackaged or because they are no longer being sold in their current line. Historically, it’s been a standard that retailers offer free returns. Now, though, that’s changing.

Particularly in the fashion industry, where 1 in 3 items bought online are returned, it was becoming unsustainable (both for the environment and company finances) to keep up the practice. Big high-street names, from Boohoo to Zara, have completely stopped free returns, with other retailers considering following suit. 

Whilst some consumers are likely to be disgruntled by the change, there is a way that shops can spin it to still win favour. Consider the previous point that younger consumers are looking for strong values in their brands, and market the charging of returns as a move to cut down on waste in your industry and help the planet. It’ll ease strains on your finances and create a more eco-friendly brand image.

Same-Day Delivery Demand

More than 50% of UK consumers now consider same-day delivery to be important when making a purchasing decision. A further 62% expect next-day delivery options as standard.

Impatience is growing in the eCommerce world and consumers don’t want to wait for the products they buy. As a retail brand, though, meeting same-day and next-day delivery demands can put a strain on your company.

One option is to offer click-and-collect services. This could be in a nearby physical shop or at a third-party location, making it easier for delivery drivers to drop off large quantities of parcels at rapid speed. 

Consider looking into third-party delivery services to aid in your next-day/same-day delivery. Though costly, it could be a winning move to convert browsers into customers and differentiate yourself from competitors.

Final Words

With the rise of technology and younger generations with money to spend, the retail industry rarely ever stays the same for long. Hopefully, this article has shone a light on current changes that are reshaping the world of shopping and given you an insight into how to create a successful business model for the future. Be sure to follow our retail blog for more.

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