The latest trends in the e-commerce and m-commerce paradigm go on to highlight that evolution is the best way to keep growing. By evolution, we are not talking about the numbers or revenue directly — this is what growth is. Evolution here refers to the ability to adapt and survive the rapidly changing environment and retain a holistic view of happenings, learn the right lessons and improve at the desired pace.

Keeping in mind how revenues are driven and profits accomplished, the core idea of any retailer, or for that matter any big service corporation, is changing from ‘customer knows everything’ to ‘What the customer wants’. This shift puts the core motto of the retail and consumer goods industry — the customer is always right — under the magnifying glass.

With a great deal of study going into understanding the different kinds of consumers and the buying process, the buying patterns have changed drastically. Crudely put, consumers are broadly classified into promoters, inhibitors and passives. To see how they can be classified further, see Figure 1.

With different kinds of consumers interacting with the retail chain, the selling model has evolved to match the consumer’s buying behaviour at the same pace, if not faster, over time. The internet boom serves up on a platter the information that consumers are looking for, be it on ‘how to use the product’ or ‘where exactly to shop for a product’. Further, the present-day consumers have learnt not to compromise on quality while looking for the best deals (See Figure 2).

‘Know your customer’ digitised

Twenty to thirty years ago, if a resident walked into a shop/restaurant in the same locality, there was a big chance that the shopkeeper or the waiter would have remembered exactly what they had ordered the last time, their likes and dislikes and also shared suggestions on what to choose. Tools such as Google Analytics and Adobe Omniture have digitised this age-old formula of ‘Knowing your end consumer’ by capturing the consumer journey online and at PoS (point of sale). The algorithm which narrows down the product that a consumer would like to buy has diversified greatly owing to several external contributors. It is this aspect that present-day corporations and retailers are aiming to tap and decode to stay ahead in the race.

Imagine if you were to walk into a store and get to see the best offer for the products you looked online half an hour ago, coming up on the display. It is indeed possible in the near future to put what the consumer is looking for right in front of them and eventually draw them into the suggestions of what would work for them. With such inevitability on the radar, a well-known key performance index (KPI) called the customer satisfaction index (CSI) would lose its credibility as the consumers would no longer hold the key to what satisfies and exceeds their expectations. With word-of-mouth being digitised via social media, it is all the more evident that the CSI can also be tracked and manipulated. A call from the service centre asking you to rate them on a scale of 1-10 and then questioning the consumer if their rating is below nine is not an alien scenario anymore.

Impact of Gen Y consumer

Finally, the lion’s share of the credit to this paradigm shift goes to the tech-savvy Gen-Y consumers for whom the world rests in their palm and their laps. In addition to being amazingly adaptive to the tech shift, these consumers have blurred the buying channels and are capable of picking the right products at the right prices with right services. With the reviews, discounts, periodic sales, shipping charges and offers on combinations of products driving them to choose what’s best, the concept of ‘Shopping by the list’ is replaced with ‘Shopping by the list and more.’ The retail industry, on the whole, is now looking at their consumers in a new light. There is a good amount of strategy and analysis that goes into acquisitions, setting up new physical stores, gauging what makes their customers tick, and so on. These decisions must not only have a short-term benefit but also must prove to be a worthy investment in the long term. This gets slightly complicated when they must cater to the spectrum of ‘smart’ end consumers. The question, thus, has now changed from “what do I sell to this customer?” to “why should I sell this product to this customer?” Reading between the lines might tell you that your retailers already know what you want to buy but are waiting for you to make the first move.

comment COMMENT NOW