Think Tank: Consumers Are Pushing the Retail Industry Forward

looking to people's shopping habits
By Ryan Patel. Source: WWD.

From recent news headlines focusing on retailers who have failed to survive, it is clear that the retail landscape is dramatically changing. However, there has been one constant through this change: consumers. Consumers are playing a crucial role in how the retail industry will move forward.

For example, the consumers’ passion and voice in the retail realm has recently been influential on retail companies, who strive to position themselves better for the future with consumers. Below are a few attributes consumers are starting to demand from retailers:

Be Genuine in Social Responsibility

“Do good and give back.” Simple words, but can be convoluted when retailers try to find their ethos and run a business at the same time. For example, happening more than ever in today’s market, most consumers are pushing their favorite brands to commit to restoring the ecosystem and promote social philanthropic causes. These consumers want the brand to be personally involved and vested — ideally lining up with the values of the consumers.

That means writing just a check may not always be enough for consumers, but by having the brand’s executives and employees helping in the community and/or personally supporting a cause, the brand makes a larger impact and a deeper connection with its consumers. This has pushed many brands to pick causes that are inherently intertwined in its business and mission. For example, the commitment by Hennes & Mauritz (H&M) to be better in finding ways to be sustainable and environmental friendly, has put itself front and center. H&M offers a 15 percent discount to any customer if they recycle garments in their stores.

Since 2013, this initiative by H&M has amassed more than 39,000 tons of collected garments, which equates in fabric to 196 million T-shirts. Although this initiative has not been heavily marketed by H&M, many of their consumers are in the know about this initiative and appreciate the brand’s commitment to reducing their green imprint.

Empower the Consumer

The word “empower” typically arises when leaders need to embed it within their organization in order to succeed. Companies spend a tremendous amount of time figuring out how to empower its employees, but many forget the consumer can be empowered by the brand. Speaking technically, consumers are actually no different when it comes to brand empowerment. There must be a feedback mechanism that creates a two-way dialogue that is always available and trusted by the consumers. Only then will retailers have the undivided attention and loyalty through its ups and downs.

Consumers want to be involved with the brand and even part of the brand’s decision process (such as suggesting color options, marketing new events, or choosing a brand spokesperson) — no matter how small of a role. This onset of the empowered consumer is a shift in mentality within the market where every voice matters and these voices could provide large dividends to companies that embrace and support these consumers. With feedback and comments delivered instantly via social media today, consumers feel they can be heard and are more likely to engage with companies than before.

With that said, there is a large opportunity for many retailers, especially the ones struggling, to reach and engage its core audience of consumers to enhance its campaigns, products and strategic direction. But this takes a full commitment from all within the organization, typically driven by the company culture, in which consumers can help support and drive, as well.

Personalized Experience

There has been a tremendous amount of competitive pressure on retailers to enhance customer experience. One arena that has been a recent focus is on the evolution of predictive technology. It has become very apparent with all the data that is shared today: an automated and personalized experience can be achieved by retailers in-store and online alike. The retail industry, especially the fashion industry, can create an ideal consumer interaction, such as by suggesting outfits and clothing for a company’s upcoming fashion season just in minutes now online.

Companies can also tailor an experience to each individual by collecting behavioral data. As more retailers collect personalized data of its consumers, a larger demand will emerge to have a personalized experience in other categories, such as visits to stores to customer service. For example, we are starting to see this with Amazon and its fashion products. Amazon has begun testing its Prime Wardrobe initiative, where consumers can “try before you buy” to ensure the consumer is fully satisfied with the wardrobe.

However, when it comes to collecting personalized data, there will still be a need for balance and transparency with how companies are gathering information on its consumers. Consumers’ privacy is a very sensitive and critical issue. Many consumers will leave brands, if they felt their privacy has been infringed upon.

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