Winning with future shoppers.
This empowered and diverse shopper landscape presents a number of implications for the retail industry, but two in particular stand out as especially foundational and formative, and they are critical to understand in order to achieve growth with shoppers today and tomorrow. First is the paradox of retail choice, and the second is the evolution of what "value" means to shoppers.
Despite the demise of a handful of notable retailers over the past several years, shoppers today have a sometimes overwhelming number of choices of where to shop, as more niche players have entered the market and online options have proliferated. However, in the face of myriad retail options, shoppers have actually opted to shop at fewer retailers than they did several years ago. We see a similar trend in the diversity of product categories that shoppers purchase in any given month. This is reflective of a fundamental value shift toward simplicity, with the shift enabled and amplified by online tools that allow shoppers to streamline a whole range of shopping-related activities.
This is the paradox of retail choice: Given more options, shoppers are actually streamlining their shopping behaviors, opting out of retailers and brands that do not align with their values and preferences, and opting in to retailers, brands, and services that simplify the shopping process.
The paradox of retail choice is closely related to the second foundational implication of the empowered, fragmented shopper: an evolving notion of what "value" means to shoppers. Price has dominated the value conversation for decades, and one could argue that it still dominates the conversation between retailers and manufacturers. Shoppers, however, are moving on. Although price remains (and will continue to remain) an important part of shoppers' understandings of value, it has become a less dominant part of the value equation. Factors related to the ease of shopping, specific product qualities and claims, a sense of connection to the retailer or brand, and even the convenience of not having to shop at all are increasingly important to shoppers.
Of course, these nonprice dimensions of "value" tend to be more nuanced and qualitative (and therefore, more difficult to manage, market and message against) than a price-centered approach, but in this environment they are essential to understand and embrace. In general, the retailers and brands that clearly articulate their unique value proposition (not just their price-competitiveness) have been the most resilient in the face of streamlined shopper routines.
Winning with the future shopper requires us to accept the fact that the balance of power has shifted dramatically in favor of the shopper and recognize that the "average shopper" is a less meaningful common denominator to plan against than she once was. Although this shift in thinking introduces new complexities and challenges, it is one we must make to remain relevant to tomorrow's shoppers.
Rachel McGuire is a director at Kantar Retail.
Caption: The balance of power has shifted in favor of consumers.
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|Title Annotation:||KANTAR RETAIL: News|
|Publication:||Chain Drug Review|
|Date:||Oct 23, 2017|
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