Recently, PWC released Total Retail 2015: Retailers and the Age of Disruption. The research conducted was sampled from over 19,000 individuals across 19 different countries. Information was obtained from retail professionals across the globe to gauge their view on where retail was headed and what disruptive factors we’re likely to see next.
The PWC report predicts four ‘waves’ of retail disruption businesses across the globe are likely to encounter. Their analysis indicates these four waves are likely to be: “the evolving role of the store, the proliferation of social networks, mobile phone technology, and global demographic shifts,” the PWC report says.
Disruptive factor #1: An evolving retail store
The first disruptive factor the report outlines is the evolving role of the retail store. To some retailer’s relief the report doesn’t indicate a fundamental shift away from brick and mortar stores. Rather, physical retail stores are being used as an end-cycle. By that, I mean the report indicates customers are performing their research before reaching the store – usually online. This means stores are becoming places whereby customers walk in with their decision making process almost complete. It also alludes to purchases being made online – and online returns being handled in store, as a place of logistical convenience rather than a place to purchase.
Disruptive factor #2: The proliferation of social networks.
Social media and its influence is an obvious disruptive factor that’s been droned about for the past couple of years. Frankly, I find that it’s quite boring to still be talking about the benefits of social media and convincing people of the benefits. Nevertheless, it seems some retailers still don’t understand its impact hence its inclusion in the PWC report.
The great insight lies in its findings which suggests there is a link between social media investment and consumer purchasing. I always say “suggests”, as that’s my statistical lingo talking but it’s pretty clear social media is influencing the way we research brands and products we like. The report also mentions “there are two possible transnational models of the future when it comes to social media. One is the massively networked Chinese model (which is also the case for developing nations such as Brazil, India, and Turkey), which can help create such phenomena as Single’s Day, which had humble origins at Nanjing University just over 20 years ago and has now exploded into the largest 24-hour shopping event in the world. Another is the more traditional European model (shared also by Japan), which transcends technological networking for a more traditional or “laidback” appreciation of shopping”.
The majority of our customers are based in the Pacific and US so we don’t expect customers to adopt a shopping approach experienced in China. Buyers in our geographies will be engaged with social media, but not to the extent buyers in Asian geographies are using devices to research or even be part of product design.
Disruptive factor #3: Mobile and related technologies
Let’s be frank, ever since people discovered phones they were using it for things other than texting or calling – and probably that snake game those classic Nokia’s had. Now mobile purchasing has been growing ever since we started online banking, but it hasn’t really taken off like we’ve seen until lately. For retailers, it means they’re simply going to have to adapt.
The report delves into mobile technology challenges which is really focused on information security. That’s always going to be an issue, but probably one the retailer won’t solve – it’s going to be up to the banks and manufacturers. A surprising finding in the report indicates to a strong interest of use for digital currencies. 39% of respondents indicated to using a digital currency in the future. 36% indicated they weren’t sure.
I’m not sure Australian or New Zealand retailers are ready for that. Having recently travelled across the U.S, I can say I was much more aware of digital currencies being an option and I assume the U.S will lead the way with adoption.
Disruptive factor #4: Demographic Shifts
The millennial generation (born between 1985 and 2004), are important purchasers for retailers. This is the demographic out there buying a significant amount of fashion products, as they are old enough to be income earners but young enough that they’ve been exposed to all facets of technology and social media. This is the texting and Facebook generation that don’t need to be educated in how to use technology to research and purchase.
Thus, it makes sense for the report to include this aging demographic into the disruption mix. As this sample size gets older, it’s obvious that the use of technology and social media to purchase will only increase. Referring to the graph below from the PWC report, you can see an obvious difference between respondents aged 18 – 24 and those listed “everyone else”. This supports that prediction, mobile engagement will only increase and cause more of a disruption in the way we buy.
The report itself, focuses heavily on technology and social media as the leading disruptions for the coming years. That means retailers will continuously have to keep up with the pace of change. It seems that in the last ten years, there has never been more disruption to the retail market. For Cin7 customers, that’s going to mean keeping up with the pace of change and making sure you partner with the right technology. We’re taking steps to keep up with this rapid change, by focusing on product rather than marketing tactics that are short lived.
References:
PWC (2015), Total Retail 2015:Retailers and the Age of Disruption. Available at: https://www.pwc.com/gx/en/retail-consumer/retail-consumer-publications/global-multi-channel-consumer-survey/assets/pdf/total-retail-2015.pdf.
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