2023 & beyond
Reinventing Retail in 2023 & Beyond
With the digitization of multiple stages in the shopping journey, such as discovery and supply chain management, retailers are creating experiences to fit into consumers’ lives instead of having them conform to traditional methods. Social media and entertainment platforms have also evolved in their features resulting in people being able to shop almost anytime, anywhere – even while working out or driving!
However, there have been speed bumps with the adoption of e-commerce. E-commerce did not achieve the expected growth and revenue predicted during the COVID-19 pandemic. Retaining consumers has proven difficult, with ineffective, high-spend consumer acquisition and increased privacy regulations. Macroeconomic contexts of rising inflation and a recessionary environment also impact spending habits.
“Now, E-commerce sales are plateauing as shoppers return to physical stores. The share of total shopping that is represented by E-commerce grew from 11.1 percent in 2019 to 14.6 percent in 2020, where it’s stayed” – Excerpt from the Washington Post, 2022
Evolution of Commerce
What is Everywhere, Embedded Commerce?
As consumers’ online engagement expands beyond clicks and conventional ads, Everyday Embedded Commerce presents an invaluable opportunity to create new paradigms for shopping. By leveraging the power of multi-channel integration and hybrid stores, businesses can introduce a more natural experience that doesn’t intrude on or disrupt their existing operations. Here lies a chance for retailers across industries to find innovative solutions through Everywhere Embedded Commerce!
Key Insights for Everywhere, Embedded Commerce
• Retail starts in one channel and ends in another
The goal is to be present in every channel and for a cohesive dip-in-dip-out cross-channel experience.
Nordstrom integrated physical and digital with the launch of online orders & pick-up at their stores. They expanded their store fulfillment capability to meet the rising demand for BOPIS* and curbside pick-up. The company’s revenue grew as it integrated its store, fulfillment centers, and online inventory to create a cohesive experience.[2]Opportunity: How might retailers accurately identify where an individual is physically & cognitively to create cohesive, contextual experiences?
• Physical stores as hotspots for experience.
Unlike what we’ve known, redesign physical stores; reimagination towards experiences, fulfillment & meaningful human interaction.
Having faced setbacks and losses in response to competition from the likes of Amazon, it is preparing for a comeback as more people gravitate towards physical stores, this time bringing the familiar with more contemporary offerings of community spaces & coffee shops; and leaning into the identity of “the third space”; Barnes & Noble set to open 30 physical stores in this year. [3]Opportunity: How might retailers reimagine physical spaces as experiential, functional, brand-reinforcing, and purposeful?
• Transparency through inter-connectedness
Retailers will be able to ensure transparency and clear communication across all channels by providing information about all inventories on online and physical platforms. All consumers understand that friction is natural but don’t want their loyalty to be taken for granted. The time gap between negative experiences and negative media is small. Accountability means owning up to past mistakes and being proactive with ongoing experiences to prevent surface-level customer/employee complaints from becoming public trust & reputation crises.
LVMH has developed blockchain technology to track luxury goods and fight counterfeit sales. Louis Vuitton and Parfums Christian Dior are amongst the first brands to use ‘LVMH’s blockchain platform – ‘Aura.’ [4]Opportunity: How might retailers build visibility, assurance, and accountability across touchpoints?
• Emotions & engagement go hand-in-hand
Consumer purchases are driven by context and mental models; behavioral data can decode emerging consumer micro-moments.
Eager-to-help employees in colorful shirts, handwritten signage, limited-run experimental products, glocal flavor combinations, and curation of products to resemble that of a boutique store, among others, are some of the ways Trader Joe’s remains a shopper favorite. [5]Opportunity: How might retailers trace and leverage behavioral markers to create an omnichannel presence that maps to dynamic purchase journeys?
• Micro-communities: channel for the future
By curating strong communities with existing consumer sets based on shared identity or interests, retailers will be able to emerge stronger than ever. Creator communities or fan communities foster bonds and have a deep-rooted impact as consumers do for each other what no marketing campaign could – they teach, learn, exchange, empathize, and in doing so, create new meaning & utility for products.
Lego nurtures a product community. Through its Lego Ideas project, it asks fans to submit construction ideas, and the selected ones can be found on the shelves. Consumers are not just participants but also co-creators of Lego designs. Lego Ideas has approximately 1.5 million members who have submitted over 33,000 project concepts. 30 co-created kits have been brought to the shelf so far! [6]Opportunity: How might retailers identify, integrate, and innovate with core communities?
How can you leverage Data & AI to enable this future?
Image References:
1. Generated on Midjourney
2. JJG. (2021, January 28). 10 Retailers Ruling Curbside & BOPIS. RIS Retail Info Systems. https://risnews.com/10-retailers-ruling-curbside-bopis
3. Pressman. (2020, December 7). Is it too late for Barnes & Noble? Fortune. https://fortune.com/2020/12/07/is-it-too-late-for-barnes-noble/
4. Luxury Brands Want To Use Blockchain That Will Allow Consumers To Verify Goods. (2021, May 4). 101 Blockchains. https://101blockchains.com/blockchain-for-luxury-goods/
5. Bentley-York. (2022, March 26). GETTING SHIRTY I’m a Trader Joes employee and the reason we all wear Hawaiian shirts was inspired by Disneyland. The U.S. Sun. https://www.the-sun.com/lifestyle/4982946/trader-joe-employees-hawaiian-shirts-revealed/
6. The 8 approved LEGO Ideas winners under development to be released as LEGO sets. (n.d.). The Brothersbrick. https://www.brothers-brick.com/2021/02/07/the-8-approved-lego-ideas-winners-under-development-to-be-released-as-lego-sets-news/