This article summarises a section of the Retail 5.0 report by QUT Chair in Digital Economy. Click here to read the full report.
The latest evolution of retail features a number of interconnected trends, largely shaped by ever growing consumer digital literacy, power and self actualisation. Responding to newly empowered consumers, as well as the data generated by new, online habits, retailers have had to come up with new business models and services.
Across a number of dimensions, it is clear that digitisation marked a shift towards a more customer-centric mode of doing business. No longer passively accepting the information, goods and services on offer, consumers are taking command. They can even take full control of the process, selectively sharing their buying intentions and preferences in order to achieve better outcomes.
But retailers can’t sit back. The wide exposure of consumer data means that competition is fierce to serve consumers what, and, perhaps more importantly, when, they most need and want.
One of the underlying points of Retail 5.0 is that consumers needs or wants should be catered to instantly, perhaps before they even know they need something.
We are also on the cusp of a profound shakeup in who or what a customer is. As devices themselves become more capable, we should expect devices to make more and more decisions, and otherwise drive the purchasing process. We have already seen glimpses of this with devices that can automatically order replacement soap or book appointments.
But tied with ever more data, more exotic algorithms and computer power, devices will become capable of increasingly sophisticated decision making. Once we move beyond simple if-then commands, such as “if running low buy more”, retailers will have to figure out how to service technology as the customer, including catering for variations in preferences, price sensitivity and myriad other settings.
Perhaps more existentially, retailers will need to figure out how to “market” to devices, what optimal decision making is for a device, and how that differs from humans. A device, for instance, doesn’t get overwhelmed by choice, bored or tired.
We shouldn’t expect this to be the result of one device, but perhaps ecosystems of devices and services that together make decisions about what a human requires and when. For instance health tracking apps paired with other smart devices, working out the wear and tear on clothes and when replacements are called for.
The explosion in data and connectivity, more flexible forms of manufacturing such as 3D printing, and wider availability of testing about people such as dna sequencing, have also opened up space for more personalisation in products themselves. More than just online experiences that are tailored to you, consumers expect physical products that are tailored to their individual tastes, and even health plans and pharmaceuticals that are tailored to an individual’s specific biology.
Put together retailers should plan to deal with an ever more empowered consumer. One that has more information, options and control, and may not even be a human.
Click here to read the full report.