Retail and Digital
Retail and Digital
A decade ago, when the economical crisis had perhaps passed its peak, retail companies were in pretty good shape. As a ‘necessary’ intermediary they mastered the relationship between customers and their brands.
Over time, most retailers have had to face and adapt to many and common changes: mass-consumption leading to larger stores, economical downturn(s) leading to pressure on prices, the rise of foreign production hence dealing with evolving stock and logistic issues, etc. Nothing as dramatic as of today.
Once, “retail” had been an understood marketplace between the “customer” and the “product”, eliminating bottlenecks through a fluid supply-chain. Concerns such as quality, production, communication, brand awareness were out of their sight. According to the type of business segment they were a part of (independent, networked or chain), retailers had to negotiate with manufacturers and topics of high concern were mostly concerned with procurement, price, availability, promotion, merchandising, real estate, payment systems, and the like.
Simply put, the customer was not central.
Digitisation shuffled the cards drastically. It brought new ways of consumption to a more creative type of consumer; from a mere “price / availability” matrix, in-demand consumers discovered they wanted even more – more proximity, choice, flexibility, (better) prices, experiences, and more fun. Climbing the steps to the upper part of the Maslow pyramid, they also grew a conscience, and found new ways to express their values when consuming. Among others, the capability directly to source products led to trends such as DIY (do it yourself), enabling consumers to transform into self-made producers and retailers!
Brands themselves changed to reach, seduce, and retain the consumer. They invested heavily in the product itself and on the brand too; with other retailers creating their me-too products, brands became their own retailers through a multi-channel approach, developing new consumption trends and concepts.
Last, the outbreak of digital platforms turned the whole value-chain upside-down, dismantling the traditional Brand>Retailer>Customer relationship.
From a leadership position, and unprepared – perhaps unable – to adapt rapidly to this new deal, retailers were caught between platforms (data-driven) and brands (product-driven), themselves bearing the weight of both real estate assets and extensive headcounts.
From a simple and rational historical model, we shifted quickly towards a fast-paced, multi-players and obviously digital market. In that ever-changing context organisations needed to restructure drastically, via leaders with a strategic foresight, but also gifted with proven operational abilities.
At Horton International, we advise clients in many sectors such as: electronics, luxury goods, beauty, sporting goods, food retail, home, DIY.