The availability of more information and choice has changed consumers’ expectations about how, where and when they shop. Consumers are less willing to settle for a ‘one size fits all’ shopping experience. When we asked a panel of retailers and retail experts in an international survey to rate the factor that will have the biggest influence on retail development this year, the top choice was the overall convenience of the shopping experience for the consumer.
Ranked seventh most important influencer in the same survey two years ago, the overall shopping convenience has even overtaken internet shopping – now in second position – as the top driver of retail development. Convenience is expected to remain a key driver, however, its influence will be matched by that of mobile communication in years to come. While currently ranked third most important influencer, mobile communication is expected to become the number one driver of retail development in the future. As more mobile services are made available, customers will increasingly use them to search for and to buy products and services online. They will also use these mobile services to compare and share information about brands and their experiences of them while shopping. Mobile communication will therefore be a means of extending the social nature of shopping to an online setting.
The influence of price on retail development is in decline
Price competition, on the other hand, ranked second most important influencer of retail development in the same survey two years ago, is now ranked fourth. The impact of this factor is expected to further weaken in the future. While 83% of respondents in our survey think price competition has had a high impact on current retail development, only 73% believe this factor will be relevant in the future. In fact, price has become a hygiene issue for consumers, while convenience has emerged as both a way to achieve competitive advantage and differentiation for retailers.
Innovation has pushed convenience and will push mobile retail to prominence
The retail industry has been an innovation hotbed in the last few years, leading to the co-existence of digital and physical stores and, in turn, providing consumers with numerous ways to shop. Consumers are embracing the convenience of these new ways of shopping, including the immediate access to retailers and products offered by their smartphone or other mobile devices. Retailers will need to enhance their current formats with smart mobile solutions to capitalize on shoppers’ thirst for an increasingly connected shopping experience.
The majority of retailers in our survey think mobile solutions such as location-based apps are an opportunity for attracting customers and researching their behavior in-store. This is a good example of the proactive way in which retailers could innovate to face changing consumer needs.
How retailers can differentiate their offer
The challenge for retailers is to ensure that the right products are presented in the right way and at the right time to the customer. Bearing in mind it is increasingly difficult to differentiate through price, providing consumers with opportunities to shop according to their lifestyles and “on the go” is an area where retailers can stand out. Successful retailers will be those that make shopping a convenient part of people’s lives.
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