Successful retail organizations and brands will need to address changing customer expectations around consumption by focusing on the role they play beyond product sales. The future belongs to businesses offering honest products and enabling meaningful consumption.
The above will introduce a new dimension to future business models. Global consumers are more than ever looking for products that are good for, or at least do no harm to, society, the environment and their health (learn more about trends within retail and consumer goods here). They increasingly prioritize product longevity over buying something disposable. As a result, successful business models of the future will not be about selling more products but about empowering consumers to lead better lives. They’ll focus on helping consumers make the right choices for themselves, the environment and the planet.
New technologies will play an important role in shaping the future of retail and consumer goods. Because neither industry has historically been a fast technology adopter, there is a gap to overcome. Just as virtual and online shopping experiences have become more customer-focused and efficient, technology also offers the possibility of enhancing the physical shopping experience and producing consumer goods at a personalized and sustainable level.
Rise of hybrid experiences
Consumer goods and retail have always been product-centric, with the focus on transferring products from an organization to a consumer. In physical retail stores, service has been about having the right products in a clean shop with little to no waiting times. The intent of physical stores has been to keep consumers in them as long as possible.
New technologies have fundamentally changed this concept, as they enable consumers to search, discover, evaluate and purchase products totally differently. Digitization has also resulted in consumers looking beyond the product and expecting the transaction to be not just about the product but about the experience. At a time when we’re adding intelligence to our brick-and-mortar world, physical stores will become multisensory, immersive and adaptive environments, with no distinction between the physical and virtual (learn more about the merge of the physical and digital worlds here). Both the physical and virtual worlds will seamlessly connect with each other and with the needs and wants of the individual. Products will become fully personalized, with new ways of promoting and even producing them.
Store experiences will be seamlessly integrated into the customer’s hybrid shopping journeys. Physical retail will use technology to enhance experience and convenience, while digital retail will embrace the physical world to fuel trust with the benefits of touching, seeing and experiencing. The question is: for how long will the digital world need these attributes?
For decades, retail and consumer goods were based on gut feeling and market research. Now, with the capabilities of real-time and even predictive data analytics, the consumer goods industry is moving from a model of reactive operations toward a data-driven, proactive approach. Rather than pushing products to consumers, the model is increasingly based on consumer pull.
Data is being extracted in every phase of the factory-to-consumer journey. The combination of all these insights will bring enormous possibilities to adjusting products and services to changing demands, enhancing the customer experience, offering new products based on a continuous flow of predictive insights and minimizing stock. Supply chains will be streamlined, and relationships with retailers will be intensified and enhanced. With the data consumers share, they will make it possible to experience a way of shopping that is fully calibrated to their needs and wants. Retailers will receive instant information to better serve and advise shoppers. All of these capabilities are changing the business playing field fundamentally.
In many cases, new technologies have the potential to surpass our physical shopping experiences and fundamentally change the world of consumer goods. But many consumers still need physical connections and interactions in the shopping process. The future will blend the best aspects of the physical world with those of the virtual world.
How well are companies delivering when it comes to customer experience? What capabilities and technologies are necessary for CX success? How important is a customer-centric culture? To find out, we surveyed over 2,000 business professionals and consumers.