Future trends in retail and how a product data strategy can help retailers adapt
Covid-19 has triggered an upheaval in the retail industry, causing many retailers to urgently ramp up their online offering. eCommerce is already well- established in mature economies worldwide, so any digital strategies which are behind the curve are very quickly having to address weaknesses.
Regardless of the changes wrought by the pandemic, there will be other trends emerging in the coming years. The key question is how retailers can adapt and use a product data management strategy to exploit these trends.
Retail Trends in the Near Future
We’ll look at two areas:
- Changes in consumer profile and behaviour
- Socio-economic trends, particularly sustainability.
These trends will highlight why investing in a high-performing product information management strategy is key: ensuring it has robust product data governance, processes and cutting-edge technology.
The Changing Customer Profile
As personalised experiences and frictionless purchasing become ever more prevalent in the retail landscape, consumer behaviour will continue to move with evolving trends. The principal drivers continue to be technological advances and a shift in power towards the consumer in terms of what they want and require, alongside their ability to make informed decisions.
Customers will expect everything to be ‘right’. To be precise; right in terms of what they pay, when they want it, where they can buy it, whether it lives up to their expectations, and how much information they have to make an informed decision.
The level of responsiveness, information, quality and reliability (in fulfilment, for example) will need to be of a uniformly high standard.
Consumers will not just expect but demand a friction-free experience, whatever channels they use to access the product. Be it physical, digital (home or mobile), or other channels, like IoT or voice-activated, the linkage between one channel and all others should make the experience easy and trouble-free, thereby enhancing the consumer’s relationship with the brand.
Back in January 2020, things looked very different to now, as we’re feeling our way towards ‘the new normal’. Nevertheless, trends which have been emerging in recent times will establish a firmer grip on the retail sector;
- There will be fewer middle-class consumers with high discretionary purchasing power. Even before the market upheaval caused by Covid-19, consumers in mature markets have been demonstrating the 3 ‘C’s from figure.1: caution, conscientiousness and consideration in what, where, how and from whom they buy. These three factors, especially the first, will be accentuated in the coming two to three years, as digitisation of retailing spreads exponentially.
- More and more highly socially conscious Gen-Y consumers will be moving towards peak earning power with high expectations about innovation in digital retailing and the values they expect to see evidence of from their chosen retailers. Their needs will be constantly evolving, forcing retailers and brands to demonstrate genuine responsiveness and adaptability.
Fig 1. The evolving consumer
Widespread awareness and activism around corporate ethics and sustainable practices will favour those companies which walk the walk and don’t just pay lip service. Clean and green retail is here to stay. Whether it is the casual browser, an individual researching purchase options or the committed buyer, savvy consumers will use online information and social media sources to keep well-informed about issues around fair- trade practices, sustainability and ethical practices. Issues like food miles, supply chain transparency, and product provenance will be key drivers in their decision-making.
How a product information management strategy will help companies adapt
Product data management needs to be at the centre of any retailer’s digitisation strategy. Procurement, marketing, sales and customer service all have critical dependencies on product information data. Those retailers who fail to establish a robust and coherent approach to managing product data will set themselves up for;
Directly or not, all the above (and more) risk damaging company performance and brand strength.
A product data management strategy which embraces efficient processes, product data governance and scalable technologies not only adds value to the customer experience but eliminates a lot of business costs incurred throughout the product data lifecycle. When building such a strategy, a retailer should consider;
The key word is convenience: ‘the state of being able to proceed with something without difficulty.’ This applies as much to a retailer’s data management efficiency and scalability as to a satisfied and loyal consumer. The range and volume of expectations generated by that word will multiply in the coming years and those companies who manage their product data strategically will have a competitive edge.