8 Trends in Retail

Main trends dominating discussions in Retail are:

1.    Multi-channel (or Omni Channel)
The way consumers interact and shop, demands from retailers the development and use of a wide "mix” of channels. These channels involve different store formats (in size, assortment and focus), investment and development of e-commerce and m-commerce (mobile commerce), use of pop-up stores (temporary stores), catalogs, kiosks and commercialization in public places (taking the possibility of consumption to a location closer to the consumer: i.e. metro).

E-commerce is a channel that demands a lot of attention, because currently there is an unfair division of the revenues generated among the ecosystem’s participants. Platform, system developers (IT companies), transportation companies, payment gateways and demand generators (i.e.: social networks, search engines, price comparators) capture most or even more of the generated profit margin.

2.    Store size reduction
The proliferation of new formats, coupled with the high occupation costs and little customer's willingness to spend time with everyday purchases, has led to the reduction in size of the stores. This is a trend that will endure. Existing hypermarkets, over time, should be transformed into shopping centers or areas of mixed use (residential / commercial).

3.    Format segmentation (Niche)
Specialization around the consumer lifestyle, combined with the increase in consumption power, has given space for creating niche stores formats. This is a concept opposite to "one stop shopping". Additionally, it is related to the re-valuation of the consumer experience as a whole.

4.    Offering Solutions and Experiences rather than Products
The retailer should be concerned in offering turnkey solutions to the consumer rather than products. The concepts of basket, pre-prepared, pre-selection and ready for use or consumption are in the consumer's mind, that retailers that do not pay attention to it will put in jeopardy its existence. This trend is in line with the following demographic changes: smaller family units and / or economically active, aging population and reduction in the use of domestic employees.

5.    Show Rooms
Physical stores have a new role: show room. Consumers visit them to interact with the products, ask questions and eventually buy from an online store. Mindful of this, investment in social networking to identify consumers with this profile and design specific offering for them makes sense. Additionally, having an e-commerce and to its integration with major marketplaces are complementary movements.
 
Another trend is the replacement of sales for the provision of services in a model whereby the supplier will fund the store operating costs and pay an administration fee. The store would function as a show room for the suppliers’ products, adding the services of curator and product"evangelization".

6.    Rent (Leasing)
A force or trend is the subversion of the logic of purchasing by leasing, loan or shared ownership. The store would offer the possibility of rental, such as, for example, tools or household items. This is something that, with the new generation of consumers known as millennials, will gain traction.

7.    Marketplaces
Physical stores with large areas may position themselves as marketplaces, allowing third-party merchants to offer in their sales area their products and services.

The major online stores are expanding their "market places", to the detriment of their own stores, assuming that they can be more successful and profitable by originating traffic and being paid a percentage of sales made. The merchants selling through the marketplace are responsible for relationship with suppliers, ordering, inventory management and delivery.

8.    Picking Points (Click & Collect)
Another trend is the provision of picking point services, or points of collection for products ordered from an online store. In this case, the physical store would be charging the virtual store by providing handling service, storage and delivery of purchases.

 

At 2B Partners Consulting we are dedicated to help companies to optimize their businesses by offering the following services: advisory board, interim management, managerial applications and consulting focused on financial advisory, operations improvement and organizational efficiency. Feel free to contact us to obtain more information by sending an email to This email address is being protected from spambots. You need JavaScript enabled to view it.

This email address is being protected from spambots. You need JavaScript enabled to view it. | Advisory Board | Interim Management