Reimagining :: Retail & CPG

Customer Journey is influenced by external factors of global Inflation, geo-political instability, supply chain challenges, covid, e-commerce/omni-channel demand; all taking us to a new dimension of retailing and trends shaping up in 2023.

Rise of new concept as “pay online-collect from store”, curbside pickup, store locker-pickup, contactless payments, alternate currencies kept the Retailer/CPG industry on their toes to evolve while many branded retailers e.g. Nordstorm, Neiman Marcus, Forever 21, JCPenny, Bed, Bath & Beyond all filing for bankruptcies. Customer discretionary spending due to macroeconomic forces will continue to get hard-hit by the current inflation & economic challenges. Retailers have to find fine balance between rising costs, supply chain challenges while optimizing operational expenses and competition.

Experts predicted death of brick-and-mortar store post pandemic, with more customers love for shopping online. Though $ revenue growth of physical store down compared to ecommerce; still physical stores will continue to play an important role in customers buying journeys. It might be more towards seemless experience of omni-channel for a customer journey but Brick-n-Mortar stores will continue to evolve. Concept of DTC (Direct-to-Customer) intention of disrupting their respective categories made a big push though struggle with reaching profitability (e.g. Brooklinen, Bombas , Warby Parker, Allbirds and Bark etc.).

#supplychain The capacity to withstand another pandemic or geo political war to re-model the supply chain existing methods of sourcing, visibility and inventory. Visibility of suppliers in 3-Tier and beyond. Regionalization of sourcing by moving to onshore or near shore for high demand/volatile goods without missing opportunities or carrying excess inventory

#sustainability got significant tractions last few years. Customers now expect retailers to continue improving their sustainability and corporate social responsibilities (CSR) initiatives by selling ethically-sourced products, implementing green business practices (e.g. customer are ready to pay more if a product followed green business practices) – Kraft & Heinz committing to achieve Net Zero carbon emissions by 2050, halving same by 2030.

(a) which product or portfolio meets the decarbonization & increased revenue / margin ?

(b) which customers are receptive to lower carbon products by paying more

(c) collaborate & incentivise suppliers to measure and reduce green house emission (GHG)

• Contextual Retailing

R3 (Right Place, Right Offer, Right Time). Unlocking the untapped layer of transforming connected objects will give customer insights in behaviour, patterns, and preferences for customised offerings (e.g. in-store navigation, in-store product placement and specialised offer, immersive VR and AR platforms), the moment of consideration and of inspiration into an opportunity. Starbucks uses a real-time personalization engine to customize offers, so customers feel as seen and known in all of digital channels as when they walk into the store, and that it’s a seamless experience For example, the retailer uses loyalty program data collected in-store to serve personalized offers and updates via its app and email. The convenience and versatility of the communications, combined with personalization, helps increase revenue and average order value.

• Cognitive Retailing

Amalgamation of AI, robots and technology gives the belief technology can help solve all problems (e.g. pilot on paying with your heart rate to curb identity theft). New AI mathematical model will be able to emulate (a) when we realize we need a product (b) when we shop for it (c) when we experience the product

* AI-powered insights about customer segments to facilitate customer purchase and loyalty behaviors.

• Collaborative Retailing

Elevate the shopping experience through immersive in-store design and merchandising. Horizontal, vertical, diagonal collaborations are all norms of future to help real-time inventory (e.g. ecommerce platform working on same day delivery).

* The Chipotle Virtual Farmer's Market started in June 2020, where Chipotle's suppliers are now able to sell products directly to consumers, such as meat and cheese.

* Amazon “Buy with Prime” allows?third-party merchants to offer Prime benefits?like free shipping and returns on their own apps. This has 2 advantages 1) customer getting Amazon assurances of delivery 2) logistics collaboration on shipping

With the deluge of data, enterprises have the opportunity to create a richer 360 degree and lifecycle view of a customer with both internal, social and external datasets. New innovation will shape how Retailers and CPG industries adapt. Technology like ChatGPT will take us to a new dimension of building customer empathy to the conversion where technology can shift seamlessly from when an automated response versus actual support person addressing customer concern in real time.