The traditional pyramid structure segregating a consumer by either mass, mid level or premium has subtly become more acutely defined. Consumer segments are no longer just these three broad segments but should now be looked at more minutely on the basis of sharper and more specific differentiation into mass, middle, rich, premium, luxury, super luxury etc.
With this sharper segmentation would come product customisation as well. Each category of consumers would want not only a separate product category but also service levels. The service level expectation of a mass level customer would be distinctly different from that of a premium customer. Thus customer focus would become the key to retention.
This sharp segmentation would further lead to differing modes of shopping as well. The move would be more perceptible in the “all under one roof” stores, which would have to transform themselves into specialty stores.
Not only this; with the levels of disposable incomes and need for exclusivity, one would see the rise of “concierge” marketing, till now the domain of only very premium customers of top-end credit card companies, a la the platinum card holder of Amex.
Product differentiation and customisation would further be divided along lines of the consumer’s lifestyle, preferences and needs depending upon their stage in life: retired, empty nest, rural rich and so on.
Pursuant to this differentiation would be the difference on how each category defines “value”. The value that each consumer derives from the same store could vary from price, range, quality, convenience, service, ambience, facilities. A loud, noisy, garish display would perhaps appeal to a youngster from the same socio-economic background as a retired person, who would find the same repulsive. Such niche targeting and marketing is what would be the mantra of success for a retailer in the markets of the future.
The future will also change the definition of store, as we know it today. The store will no longer be defined by a brick and mortar structure but will increasingly move towards a virtual space ranging from electronic to mobile devices.
To sum up, the successful retailer in these changing times will be one who can understand, differentiate and cater to his customer base on the basis of their dynamic value equations. A whole new paradigm is emerging and one needs to keep abreast of it to ensure success.
