The changing face of the retail sector
By David Barragán Álvaro, director Negocio Retail de Aguirre Newman.-
Change is afoot in the retail sector. Retailers are now continually confronted with many threats/opportunities that are forcing them to take complex decisions. Getting their future positioning right is key to success.
In recent months technological advances have come on in leaps and bounds and are reshaping consumer spending habits significantly. New technologies have been around for some time, but the real difference is the number of people now using them. Over the coming years their use is expected to grow exponentially and new generations joining the consumer market will no doubt turn the market on its head.
We live in a highly globalised economy in which consumers are not held back by borders, they are much more knowledgeable about products, they have greater access to information, they compare prices and when they buy, they do so after having compared various different options.
With their limited amount of space/product, bricks-and-mortar stores continue to fight a one-sided battle, compared to the never-ending supply of products on offer in online stores. Differentiating their products will be key to their success.
However, in the majority of cases, both markets (physical + online) tend to complement each other. Brands will build their strategy on winning customers’ loyalty, a battle which began several years ago. The biggest retailers have developed technology to get to know their customers’ likes and dislikes in an attempt to foresee the changes in trend and are breaking up the market so that they can offer each customer exactly what they want. Social media is also playing an ever-more important role in this field.
This is where bricks-and-mortar stores play a key role. The brands are aware that a consumer’s loyalty comes from its brand reputation, hence they need to create memorable shopping experiences and their flagship stores are a clear demonstration of this trend.
The physical stores of the future will be packed with the latest state-of-the-art digital advances and will be showrooms where shoppers can see and feel the product, even if the subsequent purchase is made online. They will have Click & Collect systems (buy online and pick up in the store) and they will have interactive digital screens, which will allow you to try clothes on virtually and even buy online. Even more importantly, they will have technology that will allow them to analyse in-store customer behaviour.
The introduction of smartphones into the buying cycle has meant that brands are opting to develop apps that improve the shopping experience. Stores have recently begun to allow customers to pay directly with their mobile phones, doing away with the need to stand in line and pay at the till, and there are applications that send you the latest offers as you walk through the door of the store (these will pinpoint the customers’ preferences that have been noted in the past).
In the majority of cases, online customers are also physical store customers and the interplay of physical + online store is often a deciding factor for them when buying.