Navigating disruption to capitalize on consumer trends
Retailers are not new to disruption — they’ve faced the entry of technology-powered online competitors, start-ups and marketplaces for years. But many have not been at the leading edge and have responded to, rather than anticipated these threats. As retailers look to reset and move forward, they must build on efficiency and operational excellence to deliver growth by truly reflecting what consumers want. Technology can help retailers do this, but consumers have already shifted their expectations further ahead — creating a gap that retailers must close.
This imperative comes against a backdrop where technology is blurring industry boundaries and opening new possibilities in every aspect of retail — across marketing, procurement, sales, planning, logistics and cross-functional support, such as finance, HR and real estate. At the same time, COVID-19 has accelerated a lifestyle shift to online platforms. There is now a greater acceptance of digital alternatives — whether it be to shop, work, get fit, or as a source of entertainment.
Nevertheless, predictions of the death of the physical store have failed to come true. The EY Future Consumer Index indicates that consumers want the best of both worlds:
- Fifty-five percent of people actively decide not to shop online because they feel it gives them less control of the purchase.
- Forty-five percent are mixing online and in-store for grocery shopping.
- Fifty-eight percent say they like to shop in bigger stores for more choice, consolidating multiple shopping trips into one weekly shop.
This last point opposes an underlying trend toward more convenient formats, as consumers stay home more and shop on the go less.