Retailers Must Embrace New Shopping Experiences
The tidal wave of digitization is creating choppy waters for traditional retailers and consumer goods companies. As digitally empowered consumers continue expanding their demands for new shopping experiences, meaningful brand engagement, and fluid ways to purchase goods and services across every channel, consumer industries are being forced to undergo one of the most dynamic transformations in their history.
The tell-tale signs of change are here; store closures, workforce shifts, and liquidations have become commonplace for traditional retailers that have failed to keep abreast of digital developments. With online disruptors stealing market share and consumers responding positively to greater choice, retailers and consumer goods companies need to fundamentally rethink their purpose to ensure future relevance.
This is not a traditional crisis of competition, operational execution, or communication; it’s an existential one. Those that sit idly by will inevitably get left behind.
With 54 percent of U.S. consumers switching companies in the past year due to poor customer experiences, retailers and consumer goods companies—old and new—are pivoting quickly to develop new shopping experiences that are hyper-personalized, convenient, and compelling.
In the past few months alone, Amazon has launched its self-service marketplace, which allows digital subscription providers to reach millions of Amazon customers, and Procter & Gamble’s Gillette subsidiary has launched “Gillette on Demand,” reinventing how it delivers products to consumers.
Recent research suggests that U.S. consumers not only have an appetite for these new shopping experiences but also have become open to intelligent technologies taking an active role in purchasing decisions.
A sizable and growing group of consumers are waiting to be served differently. Today, 37 percent of U.S. consumers would allow companies to collect their personal data via intelligent devices in return for a better experience or financial reward. Over a quarter (26 percent) would use sensor-based digital services that pre-emptively address their needs without human intervention. Another 24 percent would subscribe to brands that analyze their shopping history to select products especially for them and order them automatically.
CATCHING A BREAK
Traditional retailers and consumer goods companies that have been slow to respond to this reality can breathe new life into their organizations by reimagining how they serve customers.
Accenture Strategy’s analysis for the World Economic Forum found that retailers and consumer goods companies could unlock $2.95 trillion in value over the next decade by accelerating digital transformation. The key to success will be the adoption of new, digitally driven business models that will enable companies to offer consumers the shopping experiences they crave.
To reach the next frontier of digital commerce and thrive in the next decade, retailers and consumer goods companies must aggressively pursue innovation and be willing to disrupt themselves. The following four business models have the strongest potential to transform digital commerce:
1. Sharing economy. This is essentially the next-generation rental market where consumers experience a product without direct ownership. Rent the Runway is a great example of a company offering consumers the opportunity to experience fashion items in this way today. We have found that 37 percent of U.S. consumers said they would rent a fashion item for an occasion and then return it, instead of purchasing it outright.
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