Over the last ten years, we have seen a steady state of disruptive technologies driven by social media, cloud based services and mobile computing. What was once considered cutting edge, like ecommerce stores, paying online, recommendation, etc. is now considered essential for any retailers who hope to stay relevant.
With this rapidly evolving digital landscape, it is not enough for retailers to look at this digital disruption as something that is disrupting their businesses, they need to dive deep into the future to understand and stay relevant, and begin planning before the next wave of digital disruption hits them. Same is happening in the fashion sector, for years it has stumbled along without any influential infusion of new ideas. Now, it’s all changing and it’s all happening too fast. Apple, Inc. was not the first to digitize music, but when they combined several tech to make it easier for consumers to buy and access their music anywhere, Apple not only successfully changed the retail model for music, but it also made consumers demand the same from others. Therefore, it’s become important for retailers to tap into these shifting consumer expectations by embracing the next wave, or risk being washed away.
Birth of the agile retail that leverages on data
The agile retail is a direct-to-consumer model that uses smart data to predict trends, manage highly efficient production cycles and achieve lightning fast turnaround on emerging fashion trends. Take the likes of H&M, and Zara, these fashion stalwarts who are capitalizing on tech to promote high street fashion. These companies are using the latest technologies to stay ahead in their game.
Additionally, with the consumers demanding more and better, these agile retail companies have stepped up their game by shifting their approach from a traditional fashion company, where a designer creates an entire collection, have fashion shows and eventually these find their way on the shelves of mom and pop stores six months later. These companies are using smart data analytics to read and even predict trends. They are aware of what colors and cuts the consumers are demanding and are adjusting their deliverables based on these.
Only time will say if there is a showdown between the big fashion elites and agile retail. We are already seeing retails been taken down by web-based businesses, the reason – people don’t need brick and mortar that offers them the same products that are easily accessible on mobile or web. These consumers want personalized experience, and agile retail houses are already in the crux of this disruption. They are already delivering what consumers want even before they want it.
Age of the customer redefined
Regardless of the industry, that we have moved into an age of the consumer is indisputable. This is most evident in retailing industry, especially with consumers being now more empowered by online tools and mobile devices that would enable them to shop the way they want and however they want.
These changes in consumers have brought forward a ubiquitous connectivity. Many of the retailers have been able to harness the powers of data to understand their consumers better and build models of value exchange using loyalty programs. However, with consumers becoming increasingly resistant, which started with using technology to gatekeep from those who wanted to promote and sell, the challenge to maintain brand loyalty has become increasingly difficult.
It started a few years back, with spam filters in email, and more recently adblockers in browsers cutting off more than 40% of consumers. The retailers shifted to promotions through the apps, but a new trend emerged where consumers moved away from using apps and instead preferred virtual assistants and bots like Siri, Alexa or Cortana to brokerage their interactions with brands. It doesn’t sound less than a scene from a science fiction movie, but this is happening now, and happening fast. And, soon in the not-too-distant future, it would be the personal assistants who would be making the decisions for the consumers – and informing the retailers to fulfill it when the moment is right – call it machine buying if you must!
Even if it appears to be profound, this new form of convenience and real time trading delivered by virtual assistants is just evolution of consumers rebooted. However, it always takes years for retailers to adjust to any wave of digital disruption, a luxury that is unlikely to be available this time around if they are not better prepared.
Personalized experiences over items
The buying power of the millennials already surpasses that of the past generations. Mobiles and other technologies are already an integral piece of their life. These millennials demand personalized experiences across their favorite channels and they use social media extensively to share their experiences. They want their favorite brands to engage with them and want an experience that makes them feel special. Retailers need to capitalize on this trend, leveraging on the consumer-generated content to create word of mouth marketing and appeal to a broader audience.
What is important is to understand that technology disruptions can change value chains, destroy existing ones and create others. However, disruptions cannot be predicted accurately, and more often than not, since these are not caused not by a single technology but by several new and existing technologies, it is important for retailers to safeguard themselves. They need to catch up with the new demands; otherwise, they will go the way of the 8-track and VCR.