The retail of the future: digital and liquid yet human
We live in a hyperconnected world where the demand for personalization is king, consumption habits and preferences may change almost in real time and the competition for attracting customers is fiercer than ever, with pure online players, new sales channels, engagement models, brands moving up and downstream the value chain and niche players that have a say in specific categories.
Given this new context, most companies are struggling not only to grow but to survive, as the impact of digital revolution is not exclusive to retail or CPG. As a fact, the average lifespan of an S&P 500 company in the US has fallen from 67 years in the 1920s to just 15 years today. And it is expected that 75% of firms in the S&P 500 now will be gone or going by the year 2027.
So, what are the key levers for retail brands, both legacy or newcomers, to remain competitive in this era?
Being digital is not a choice anymore, it is a must for companies that do not want to be left behind. And it goes further than using new tools or technology. It has to do with rethinking the ways of interacting with customers, employees, suppliers and community while leveraging digital capabilities to build more personalized relationships.
New data capture mechanisms, analytics & artificial intelligence to understand, predict and prescribe and, finally, using from social media to VR, AR and sensors to create an integrated end to end omnichannel experience are the steps under scope of this topic, which is by the way, the most popular nowadays.
Bauman introduced the idea of liquid modernity, which perfectly describes the current situation: the rapid speed of change makes impossible to settle solid, lasting foundations. At least as companies were used to in the past.
Becoming liquid has to do with the way required capabilities for competing in this new context are built. It is needed to reset the logic behind what is strategic and what is needed to be kept in house and considering the importance of speed to market as a key decision driver. Then, companies’ liquidity will be subject to their ability to leverage and, above all, coordinate, a digitally-enabled ecosystem, setting partnerships with startups and any value-added service suppliers and even peers to remain fit to compete in this permanently and fast changing context.
Despite AI, chatbots, startups… the human touch still matters. A recent PwC survey says seventy-five percent of customers report that they want more human interaction in the future, not less.
The truth is that human interaction builds communities. And communities go beyond the product and create brand ambassadors. And ambassadors close the loop by bringing more sales.
But being human has little to do with turning the back to technology. The point for brands is finding the way to foster employee empowerment through technology across the whole value chain to gain efficiency and efficacy, as not only customers value it but all the business-related interactions would benefit of it.
Digital and liquid yet human. Mix well and serve. But don’t forget the basics: a clear vision, current and required capabilities, ambitious but realistic plans & goals and follow up mechanisms to succeed in the competitiveness journey.