The retail world is experiencing a moment of transformation and technological innovation combined with a change in consumer habits is redefining its contours.
Amongst the analyses of a scenario that is difficult to decipher, which sees a clash between those who claim that the days are numbered for points of sale and those who think that they will make a comeback, there is a recent publication of KPMG, a leading global firm that provides professional services to businesses, present in 152 countries worldwide with more than 207 thousand professionals.
In its consulting activities for large international companies, the advisory firm has identified 7 trends that are shaping the retail world.
Deep retail is transformed into the concept of hyper-personalisation. Deep awareness of customers makes it possible to construct personalised and tailor-made product and service purchase experiences. The use of behavioural data obtained in real time used to generate products, services and communication approaches dedicated to the individual customer translates into the concept of hyper-personalisation.
The transition is evolutionary: from the acquisition of data by clusters that satisfy increasingly small and fragmented slices of the market to the analysis of individual needs, which can be met with tailor-made solutions.
Consumers are increasingly experts in evaluating prices, giving priority to value. With more and more tools available to make their decisions and knowledge to evaluate every aspect of the offering, the price has to meet three requirements: value, convenience and user experience.
81% of consumers perform online searches before buying
L’89% dei clienti inizia un acquisto online partendo da un motore di ricerca
The assessment criteria also change: the perceived quality of a product is not always associated with the highest price, we refer for example to the rise of many smartphone brands whose strength is their quality/price ratio. And precisely the advent of smartphones has contributed to the specialisation of the consumer, who thanks to a tool which is always connected has continuous access to information with no space limits.
2019 was characterised by the rise of voice assistants. In 2017 alone, people with at least one virtual assistant (such as Google Home or Amazon’s Alexa) nearly doubled, from 14% to 27%. It is no coincidence that the majority of these devices are manufactured by the big Ecommerce operators, the giant of Jeff Bezos first and foremost; it is expected that purchases made through these platforms will reach 40 billion dollars by 2022.
Ecommerce vs in-store purchases: discussions have been taking place for years regarding the decline, for many inescapable, of bricks-and-mortar shopping against constant growth in Ecommerce. In reality, the experiential desire that especially characterises younger generations is marking a possible trend reversal. Indeed, 52% of millennials claim that they prefer purchases more linked to an experience than to the physical product in and of itself.
78% of Millennials gladly spend money on an event or an experience.
69% believe that participating in experiential events helps them to become better integrated with their friends and the community.
The key to retail success is creating an immersive experience which aims not so much at the product as at the memories that the purchase can generate.
The environmental sustainability of a product is no longer an option. Current generations are more sensitive to this matter than previous ones, giving priority to values and emotions over and above their wallet.
One-fifth of consumers would select a brand if its environmental policy were explained more clearly on packaging and in communications.
In 2019, companies will commit themselves more seriously to long-term projects linked to the sustainability of their brand, leaving behind a more fragmented approach linked to the promotion of small, ad hoc campaigns. A strategy which, while it could bring results in the past, today leaves itself open to a less superficial consumer who is more sensitive to environmental problems.
One-to-many communication has worked since the debut of the first advertisements, but today, it must make way for interaction on social platforms. 80% of “Generation Z” (people born starting in around 1995) rely more on word of mouth than on traditional advertising.
74% of Millennials make purchases based on what they read on social media
Companies have understood this for some time now, and this year a well established trend will be confirmed. The social platforms themselves have observed this change and are integrating tools to make purchases: first and foremost, Instagram and Snapchat, which just this year introduced functions enabling users to purchase products from the brands advertised.
In today’s retail ecosystem, the capacity to grasp the potential of platforms is crucial: a brand’s ability to create networks between different stakeholders counts more than its assets.
Naturally, not all players are capable of creating platform models, due to both the risk that a sudden change in the core business may entail as well as a lack of resources. However, this does not mean that the interconnections will be the prerogative of just a few businesses: 2019 will see an increase in joint ventures and business partnerships which, in many cases, will invest in projects without being directly involved in them.
The KPMG analysis identifies seven trends which, in part, are already an integral part of the business models of many companies. The leitmotiv that we also find in other research is now clear: technological innovation which increases at exponential levels and consumer habits which in some cases cause it to accelerate. The near future will definitely require a capacity to adapt that companies will necessarily need to keep up with in order to continue to be competitive.
We have sought to summarise some highlights from KPMG research full of many other points for reflection and interesting case studies. Anyone who wishes to read the full analysis can download the document here.
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