How To Find More Retail Growth Opportunities
In the past few decades, most retail innovations focused primarily on efficiency in response to mass-market opportunities. While operating strategies will continue to improve efficiency, future retail growth opportunities will be more customer-facing.
Retailers will address the unique needs and desires of individual consumers and provide a more rewarding and memorable shopping experience.
They will innovate around new formats and distribution models, product and service offers, marketing and customer communications, and other components of the retail business model.
Digital Spark Marketing has identified 10 innovation opportunity areas that provide the solid potential for creating new consumer benefits and stakeholder economic value.
Catch a Wave
Solve My Problem
Do It for Me
Help Me Choose
Come to Me
Enhance the Experience
Make It Easy
Do It My Way
Help Me Connect
Speed It Up
HELP ME CHOOSE
More products, brands, retailers, and shopping formats are introduced to consumers every year. At the same time, technology has resulted in an explosion of information, including inaccurate and irrelevant information.
Faced with too many choices and information overload as well as more complex products and a lack of knowledgeable sales assistance, many consumers are struggling to make smart choices and are looking to retailers for help.
COME TO ME
In the old days, consumers made the pilgrimage downtown from miles around in order to shop. Then malls were created, and shoppers flocked to these huge centers as the main shopping hub. More recently, many retailers have been moving into neighborhoods to be closer to where their customers live.
What’s next? In my home, in my car, at my workplace. New distribution models are springing up as retailers take the show on the road and reach out to consumers wherever they are.
SOLVE MY PROBLEM
Retail problem-solvers understand what the consumer is trying to accomplish by looking downstream at his or her ultimate goal. For example, innovative home improvement retailers understand that the consumer doesn’t want to buy a drill. The consumer wants to make a hole in order to build a deck. Looking even further downstream, s/he wants to build a deck to entertain family and friends.
This consumer-centric approach results in opportunities to add value to the shopping experience by doing more for the consumer. Often, this requires adding services, information, and support to the product mix in order to provide a complete solution for task-oriented shoppers.
It may also mean offering additional product categories or adopting new approaches to marketing and merchandising that reflect a better understanding of the shopper’s ultimate goal. In every case, it means getting away from a transaction mentality and focusing on customer relationships. Retailers that have established relationships with customers have bonds of trust that create innovative opportunities to extend the relationship further.
ENHANCE THE EXPERIENCE
As busy consumers turn to the Internet to satisfy more of their shopping needs, store retailers will focus more intently on providing experiences that can be gained only by being there. Individual retailers—even category killers—may not be able to own a merchandise category, but they can own a buying experience.
The decision to create a customer experience shifts the focus from what moves products to what moves people. Experiences are more than entertainment, education, or interaction; they engage customers in a memorable and meaningful way.
In The Experience Economy, authors Pine and Gilmore discuss the opportunity for companies to script and stage experiences to create value that exceeds the value of the goods and services used to create the experience. The authors urge companies to look beyond traditional pricing factors like time and cost and consider charging for the value of the experience.
Goods and services say Pine and Gilmore, are no longer enough. Experiences are the basis for future economic growth.
HELP ME CONNECT
Consumers have a fundamental desire to connect with one another, and technology is facilitating the exchange of ideas, information, and opinions. New types of social networks foster community among consumers who share a common passion or interest.
Marketers can forge stronger relationships with these consumers and earn their patronage by helping them connect in ways that matter to them and by responding to their emotional as well as their physical needs.
CATCH A WAVE
Successful marketers ride the waves created by demographic, societal, economic, and technological trends. These “green space” opportunities represent emerging growth patterns in the market.
Companies that apply innovative thinking to a growth market opportunity can generate even stronger growth and financial performance. New products, new services, new retail concepts, and new business models maximize these trends.
DO IT MY WAY
Shopping is becoming increasingly individualistic. This is being driven by the growing diversity of the consumer marketplace, technology enablers, and the consumer’s desire for greater influence, control, and uniqueness. In this new environment, the retail power structure has permanently shifted from sellers to buyers. Innovative retailers will look for ways to provide more unexpected gratification to shoppers and let them express themselves in unique ways.
And what is more unique than “me”?
But, can marketers really seek out the desires of individual consumers and do only and exactly what each one needs or wants? For the most part, customizing each order to each demand point will remain outside the boundaries of economic feasibility. Instead, the goal will better match the market to the consumer.
The Internet enables this process by providing greater accessibility to more information and more options, along with the ability to customize the shopping process to better meet shoppers’ specific needs.
SPEED IT UP
Consumers value what is most scarce, and time is at the top of the list for many. They want it fast (speed up the shopping process). They want it now (immediate gratification). They want it first (latest and greatest).
MAKE IT EASY
Ease of use is vital to the success of the retail shopping experience. The innovative process, service, and design solutions that are simple, intuitive, and in tune with shoppers’ needs—along with new technology tools— can save consumers time and effort.
An easier and more rewarding customer experience will boost sales and enhance customer satisfaction and loyalty.
DO IT FOR ME
Another way to solve my problem is to do it for me. Demographic shifts and lifestyle changes—along with growing product complexity—are steadily driving former DIY consumers into the do-it-for-me (DIFM) market for everything from home improvement and automobile maintenance to cooking and cleaning. Retailers are responding to consumers’ increasing do-it-for-me demands with innovative new services and conveniences.