We know retail is changing… so now what?

The tectonic shifts in retail that started a few years back hit critical mass over the last year, and a number of trends are clearly taking shape. Here, we examine two of them – and better yet – offer practical insight on how to leverage them.

Digital transformation has been sweeping through retail for years. In reality, it wasn’t a matter or “if,” but rather “how deeply” brands had infused technology into their DNA. Then 2020 – and in particular the pandemic – put the pedal to the floor. Entire books could be written (and likely will be) about what lasting impact this year will have on retail and businesses, but as the world impatiently awaits a COVID vaccine and a return to “normal,” one thing we know for certain is that shopping and buying will never again be what it was.

Through some level of necessity, even consumers previously inclined to traditional shopping habits were forced into new methods of researching and acquiring things they wanted. Studies by McKinsey and others reveals that consumers are likely to keep many of their newly adopted behaviors. As a result, retailers and brands will (must) continue evolving in order to please them. But how exactly can they do that?

Plenty has been written about the future of retail and how to succeed in it, but much of that rhetoric revolves around customer-centricity and vague notions of user experience. For this article, we’re locking onto two major trends emerging out of 2020 and the “new normal” we keep hearing about – and better yet – offering a real-world concept for simultaneously capitalizing on these trends.

Experience, experience, experience

If there’s one word we heard over and again in blogs and articles over the past year (aside from pandemic), it was experience. But that’s because no other singular word better summarizes the future of retail – because no other word impacts the entire buying journey from initial research to post-purchase. Experience encompasses those endpoints and every touchpoint in-between.

From a retailer perspective, brick and mortar stores will be more challenged than ever to get and keep people in stores, which means creating new, different and engaging shopping experiences. Even though more consumers will lean toward digital buying, online retailers aren’t absolved from elevating their own offerings.

As an example, one such expectation is the anticipation that social commerce evolves. Companies selling through social channels can incorporate social interactions, allowing customers to get peer feedback, reviews, interactive content and gamification. For brands and retailers, this opens opportunities for immersive experiences.

Where and how those experiences happen will have much to do with another important trend we’re watching closely – a shift in the fulfilment side of the equation.

Disrupted distribution

While COVID physically disrupted supply chains and literally disrupted distribution, the pandemic highlighted another emerging shift that is disrupting the entire retail model: brand manufacturers want to take back control of their own destinies.

That means becoming less reliant on these sometimes-fragile supply chains. It means having direct relationships with consumers that traditional selling models overlooked.

In order to reclaim the reins of their distribution (and improve margins), brand manufacturers are investing more in direct-to-consumer (DTC) relationships. Uncoupling from the traditional wholesale-retail paradigm won’t be simple, nor will be the challenge of existing among high-volume online marketplaces (you know who we’re talking about), but brands that do so will be those that ultimately flourish.

So, now what?

In a report about 2021 predictions for retail, Forrester noted, “The savviest retailers and brands have adapted and invested in the process of accelerating their digital transformation by months, even years.”

So, exactly how are these savvy brands achieving this? There are many elements to digital retail transformation, but one in particular addresses both the aforementioned trends and turns them into direct pathways for long-term sustainability: evolving your products into the experience.

By turning your products themselves into digital touchpoints, they embody the brand in a deeper and more memorable way. They offer an opportunity to fully embrace direct, two-way communication between customer and company, benefitting both parties and giving brands the 1:1 relationship practically impossible in traditional retailing.

In this relationship, consumers get information, offers, gamification – whatever your creative teams can imagine. Brands gain consumer insights, loyalty, affinity, and ultimately, a route to increased sales.

Fortunately, the technology already exists to easily transform your products into digital artifacts. NFC tags have shrunk in both size and price, and with its native integration into all modern smartphones, NFC innovation is within reach for almost any brand.

The tectonic plates underneath retail are shifting. Waiting and watching is a straight line to extinction. Brands and retailers must adjust to meet rising consumer expectations for rich experiences, and establishing direct relationships is the easiest way to do that. To better understand how you can turn your products into a digitally transformed experience, request a demo from WaveOn today.