- Article
- Growing a business
- Seeking new opportunities
How will retailers capture the consumers of tomorrow?
We asked three of this year’s WIRED Trailblazers — our community of innovative, fast-growing scale-ups — to weigh in…
The consumer of tomorrow contains multitudes. Their needs are complex, they have more buying options than ever, and more ways than ever to buy those things. With shifting preferences that blur and overlap, they are hard to fit into neat pigeon holes. And the picture is changing at an ever-faster rate.
“Yet the broader, longer-term trends in consumer behaviour are easier to get a handle on,” says James Sawley, Head of Retail & Leisure at HSBC UK. “Just as it’s hard to predict micro shifts in technology, but it’s easier to detect the macro.”
We know that consumers are increasingly price sensitive and digitally savvy, for instance. We know that brand loyalty is out, while self-improvement is in; we know that emerging markets are becoming more important, that younger and older people are buying more than ever, and that the flow of people into cities and onto the web is redefining the retail landscape.
So what do retailers need to do to ensure their strategies stay relevant and drive growth? We asked three sector Trailblazers for their views…
Embrace social commerce — and recognise that it’s greatest strength is in building communities.
|
Beauty startups that want to be the next big thing? These days, that’s a packed field. But Refy pulled it off. The company’s approach of pared-back simplicity matched with a high-quality product has taken the sector by storm. While it sells direct-to-consumer it is now also stocked in major stores around the world.
“One thing that we constantly talk about is: are we meeting our customers where they are? As people spend more time on newer forms of social media like video platforms, social is becoming a vital ecommerce destination in its own right. This trend is only going to grow.
“The brands who really succeed with it will be the ones that ‘get it right’. On the one hand that means recognising that people don't want to be influenced, they want to be entertained and they want an authentic experience. If you can really bring them into that brand journey, then they’re really invested. So when you do have a product to sell, they’re more likely to buy that.
“The second thing that is really important is understanding what makes social commerce so powerful in the first place. It’s not just the fact it’s a sales channel, it’s the fact it lets you build communities. I think in the future that community aspect is one that brands are going to really bring into focus.
“In answering that, one thing I think we’re going to see a lot of great ideas around is: if you look at where actually the most engagement is happening within your community, it's the shares and the dark social and the stuff that's not happening visibly on a platform. It’s in DMs or it’s on WhatsApp. So how can you be a part of that conversation? It’s one reason we’re developing a dedicated community platform ourselves.”
Make AI your next team member.
|
If you need new spectacles, you don’t want to wait days — or perhaps weeks — for them to arrive. Enter: Specscart, which delivers sustainable, affordable glasses in just 24 hours. The company ships to 120 countries and is expanding across the UK; a growth trajectory powered by smart use of data and machine learning.
“We’re already using machine learning and automation in lots of different ways to make processes more efficient and ensure we always have enough stock. But generative AI, which lets you create new content, will open up a whole range of new possibilities for enhancing your team and offering a better customer experience.
Omnichannel is essential, but stay alert to how it’s changing.
|
Wattbike was founded to supply exercise bikes to British Cycling, whose athletes wanted the feel of a road bike while training indoors, and plenty of performance data to boot. Today, it is an industry standard: the bikes are found in upscale gyms, professional training facilities and homes around the country.
“There are more sales channels than ever, and this really came into focus for brands during the pandemic with the boom of direct-to-consumer. The challenge is that, as a result, it's now not as easy to manage and control your brand as it was in the past. So the brands that are really succeeding are not the ones that merely ‘sell on lots of channels’, it’s the ones that ensure all those channels are actively working together and offer a unified, integrated experience.
“It’s called an omnichannel approach, and it’s only going to become more important — especially because it can really drive sales.
“Problem is, it’s easier said than done. Each channel can't help but be thinking about their own business. So it requires brands to incentivise each channel to grow without cannibalising the others. Another challenge is that not all channels will make a huge profit. It can be tempting only to put money into the profitable channels.
“To solve these, my general advice is not to create management silos in each channel. Try also to capture data about how the customer has got to their purchase, so you can reward all the channels involved.
“I think retailers who crack omnichannel will get ahead. And I think there are two trends they’d be wise to watch. First is figuring out how to operate a loyalty scheme that spans multiple channels if you don’t own all the channels. The second is that physical retail is going to be key. That’s where you get genuine, emotional engagement.”
Social commerce is not just a new channel for sales, it’s a way of driving community. This creates a virtuous circle: the better you foster that community, the better your sales.
Generative AI stands to enhance customer experiences. But treat adoption as you would any new worker, as it’s going to be a substantial investment.
Omnichannel is about integrating all of your sales channels into a cohesive experience. But to get it right, you need to ensure those channels don’t operate in silos behind the scenes.
