The magnitude of disruption over the last decade is indisputable — as evidenced by ongoing rounds of store closures including several new rounds in 2017. Does the future of shopping belong to e-commerce? Actually, no. In fact, many retailers are heralding a new retail ecosystem.
PwC’s latest report, “The New Retail Ecosystem: From Disrupted to Disruptor,” celebrates the physical store as a key retail component — a combination of physical, digital and complementary service offerings to attract and retain today’s mercurial shoppers. This means consumers can expect immersive, seamless, brand-defining experiences across all channels, regardless of where they shop.
So what six strategies constitute the new retail ecosystem?
- Pricing: While speed and convenience are key for today’s shoppers — 45% of those we surveyed said convenience is the main reason for shopping online — low price continues to by the primary motivator for two-thirds of shoppers across all channels. In response, retailers are exploring dynamic pricing models that allow real-time price adjustments based on customer loyalty, shipping costs, and inventory updates.
- Loyalty: Brand loyalty, while hard-won, is not easy to shake. A whopping 90% of consumers are Amazon shoppers accustomed to frictionless, one-click checkout, so much so that 40% of them say they shop less often at retail stores and 25% shop less often at other retailers online. Brand loyalty reinforces the power of one-to-one connections with customers via personalization.
- Fulfillment: Home delivery is most popular but click-and-collect — in-store pickup after ordering online — is gaining ground. So is shipping from existing stores, which allows traditional retailers to better compete with online counterparts. These models will continue to grow as retailers and consumers trade off speed, cost, and convenience to achieve the most value at the lowest cost.
- Assortment: The right mix of physical and digital product availability is essential. Some retailers are using showrooming — where customers browse and test products in-store, then buy them online — to provide an immersive experience while shrinking their retail footprint. Customers can see, touch, feel the products; skilled sales associates provide knowledgeable guidance as necessary.
- Platform: Customers expect a secure, always-accessible, easy-to-use technology platform; 50% of our survey respondents told us they browse retailer websites as their main search option for purchases. Meanwhile, mobile payment adoption continues to accelerate: 46% of consumers are open to using mobile payment via smartphone, a 17-point increase over last year.
- Innovation: From self-checkout devices to touchscreen fitting-room mirrors that offer immediate help from sales associates, retailers are experimenting with various options to make the shopping experience more convenient, yet personal. Some retailers are partnering with tech accelerators to expedite digital offerings and offer small-scale, test-and-learn experiments — rather than full-on rollouts — to stay abreast of the accelerated pace of digital change.
Clearly, traditional retailers are here to stay. There’s room for a variety of models to meet ever-changing consumer needs. In the coming weeks, I’ll be weighing in with a more in-depth examination of the six strategies within the new retail ecosystem. Share what you’re most interested to know.