The Changing Consumer Shopping Experience: Trends and Technologies Leading the Way
Increasingly, the consumer is taking control of his/her shopping experiences. He/she are proactively deciding where they want to shop, how they want to shop, and what they want to buy. They are doing their own research before, during and after their purchases and are more influenced by what their peers think than by what any “push” advertising has to say.
New technologies, better access to relevant data, and more sophisticated online capabilities are enabling the consumer and allowing him/her to be in the “driver’s seat” for their shopping experience. Exploding penetration of smartphones and tablets and the use of social media are at the heart of these enabling technologies and are changing the retail environment forever. As we often like to say, “like it or not, the ‘digital genie’ isn’t going back into the bottle.”
In this new environment, retailers are striving to provide the ultimate omni-channel experience for their customers. Why? Because that’s what their customers are demanding. If the retailer can’t provide an integrated, unified, flexible online/offline shopping experience for their target consumers, they know that those shoppers will go find that experience elsewhere. The problem is that offering that “ultimate” omni-channel experience is quite complicated to do in reality, especially for the traditional retailers who must deal with oversized physical stores, use or replacement of outdated technologies, and traditional (and often inflexible) business models and personnel.
However, the traditional retailers must “jump in” and take the “omni-channel plunge.” Not doing so could have severe consequences to their business. The retail Industry today is a $22-trillion market worldwide and, at less than 7% of the total, ecommerce is still in its infancy. There is a huge growth opportunity ahead for omni-channel and online retail and this growth will come at the expense of less effective traditional models. Just look at what has happened in the $300-billion+ advertising industry. Look at the spending growth in digital advertising at the expense of the shrinking budgets for traditional media such as print and radio.
Finally, the new ecommerce companies are bringing massive disruption to the retail industry. They are able to build more efficient and effective business models from scratch and aren’t inhibited by outdated cultures and technologies. They embrace the fickle, price sensitive, more informed, mobile consumer and strive to figure out how to satisfy him/her. Use of data, technology and constant innovative thinking are often the key success drivers for these new companies. Finally, they are even starting to “beat the traditional retailers at their own game” by opening up highly successful, profitable brick and mortar stores.
It’s against a backdrop of all this activity that we decided to put together this report. Our goal was to lay out the key issues and trends driving the consumer’s shopping journey today and the technologies and capabilities that support it. We purposely didn’t include the changing “front end” retail models as we felt like that is a whole separate report. Instead, we tried to outline the various “back end” content, technologies, and services that are affecting this changing consumer shopping journey and the retailer’s ability to respond effectively to it.