Since 2008 recession and eurozone crisis, the prevailing air of uncertainty has changed how consumers spend and shop. From enjoying every aspect of consumerism, they now spend in mindful manner. They seamlessly move from big box to small store or online to get the best deal and avoid paying mrp.Retailers have had to come up with new strategies to cope, from reinventing the small neighbourhood store to repurposing the big box and rethinking a purely online or offline strategy.
Today’s shoppers know they have endless options and infinite ways to shop. The oldest retail story has had a 21st century makeover. The eager shopper has become a discerning consumer, who is also a researcher, analyst, advocate, expert, pundit, evangelist, portfolio manager, judge and jury.
Global Retail Trends: Aligning With the Consumer Shift
Retailers around the globe are recasting their strategies to be able to target the consumer better across retail channels: online and offline.
1. The online-offline symbiosis
The two supposedly dissimilar retail formats are now converging to create a seamless shopping experience for the consumer, who is intent only on getting the best experience and the best deal, whenever, wherever.
Click and collect: This is designed to solve the problem of waiting for delivery, by allowing consumers to order online and then collect their parcel from a designated store on their way home. Major retailers are looking to roll out click and collect, as it saves them delivery costs and reduces the problems of supply. The concept is led by the well-established services offered by French hypermarkets, including Auchan, E Leclerc and Casino.
Instant gratification in online shopping: E-tailers are upping their game in terms of delivery times. A clutch of UK fashion brands like Karen Millen, Oasis and Warehouse are offering delivery within 90 minutes of ordering. Premium e-tailer Net-A-Porter offers Londoners same-day delivery.
Self-collection: This allows consumers to exercise more control in when and where they get their goods delivered. Russia led the change with the introduction of Postamats, secure metal lockers that allow consumers to pick up goods they’ve ordered online at PickPoint areas in department stores and other public places with high traffic.
More control: Deliveries can be made to an address of the consumer’s choice, a self-service collection point, a range of local shops, or the local post office, in the morning or evening, as desired. The French postal service has launched So Colissimo, which will deliver to a location chosen by the consumer at the time of purchase.
Smart stores: Innovative brick-and-mortars are starting to develop in-store tools that reflect the capabilities of e- and m-commerce in providing access, empowerment, inspiration and information on the shop floor to empower shoppers to manage internal and external inventory searches and get advanced, personalized information.
One of the big concerns for retailers who are also present online is that their big, bold stores have become a nice place for consumers to swing by and check out what’s on offer, before purchasing online, for better discounts or more convenient shopping times. Many retailers are converting their stores into concept stores or brand experience centers, where the store’s purpose is to build the brand equity and experience, while retail traffic is being driven to the online store. Retailers like Gap and Abercrombie & Fitch have all expanded globally using this strategy.
3. The Big Box Downsizes
As consumers start to prize convenience and value time more, brave new retailers in the US and Europe are starting to shrink store sizes and locate them closer to home or work. Value and a reliable (smart) product selection are in high demand. This is coming into play at a key time when 1. Gas prices make errand commuting less palatable, 2. Choice fatigue starts compounding shopping stress, and 3. Low prices become key to the anxious household’s financial security plan.
Retailers across categories are launching exploratory missions, but the food and grocery category is the one with the most promise. Target is opening downsized prototypes with edited stocks in 3 US cities in 2012, while Walmart has opened four drugstore-size Wal-Mart Express concepts. Sainsbury’s now has more than 2,200 small format Sainsbury’s Local Express stores in the UK, while Tesco’s Fresh and Easy has been its avenue of small-store expansion in the US.
4. Exorcising the tyranny of choice
The plethora of brands and products, and the number of places one can shop for them, both online and offline, can give shoppers a headache.
Here are some ways retailers have found to help them out:
We make your shopping list: Consumers want an easy life and nothing is easier than somebody telling them exactly what they need. Tesco and Ocado, through their recipe websites, offer consumers the chance to skip the process of making out ingredients lists. The retailers take control of selecting the products and drop them straight into the consumer’s basket. Other third party retailers make life simple for consumers inundated with choice by surveying the choices and recommending and selling just the one.
Subscribe and save: It’s a pain to remember what one ordered the last time one shopped. Consumers like a service that enables them to keep track without that bother. Amazon has taken this to a new level by offering a subscription service for frequently bought items – consumers can subscribe to buy these items on a regular basis, like a magazine subscription. No more midnight dashes for diapers