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Empowered consumers force retail change

| Economic factors

Retailers have either changed or died and all because of empowered consumers, said Chris Sanderson, co-founder of the UK based Future Laboratory.

He was one of the guest speakers on the first day of the 19th congress of the SA Council of Shopping Centres taking place in Durban this week.

“The retail landscape is shifting and consumers are at the heart of the process. It is not just about concluding a transaction anymore,” explained Sanderson, adding that big international retail brands have told him that the industry is in a new era.

“Stores have to do battle with e-commerce in order to try and attract an empowered and connected consumer with a fickle loyalty.”

At the same time, he pointed out that research shows that internet shopping will remain in the minority until at least 2050.

“Brick and mortar shops – therefore a physical environment -  will remain the preferred way of shopping, but customers may behave differently and expect more from retailers as well as transact differently,” said Sanderson.

One of the big trends in the retail landscape is the use of mobile phones to make retail purchases. It is estimated that 30% of e-commerce in the world is now via mobile phones. Mobile phone sales are predicted to reach $120bn in 2015.

Another big trend is what he calls phy-gital domination in retail, in other words where retail incorporates technology in-store.

“The combination of the physical and digital is very important as they make the customer’s experience deeper and create layers of experience as well as luring the customer to stay in the store longer and spend more,” explained Sanderson.

He emphasised, however, that the use of digital must not be impersonal.

“Digital is actually deeply personal as the retail experience can be tailor made for each individual. Retail is, therefore, about knowing your customer and technology can enable a retailer to build a unique relationship with each customer,” he said.

“These so-called Generation C customers want to co-create in the retail space. They are not passive consumers. Research actually shows that 87% of consumers in the world want meaningful interactions with brands.”

He said a store can no longer just be a store anymore. It must become a “converged space” where there is an interplay between retail, hospitality and culture. It, therefore, also involves a strategy on how to sell non-core products in a store.

It therefore, becomes more and more important for malls to create experiences beyond mere retail, but rather community hubs offering customers a “mix of everything to do with your brand”, but with no pressure to buy anything.

“The role of retail will be to link up systems to know customers even better than they know themselves. The availability of big data means there is no excuse anymore not to know your customer,” said Sanderson.
“Create multi-functional spaces where consumers can linger and use digital technology to enhance the ‘story’ you are telling.”

* Carin Smith is a guest of the SACSC at its congress.




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