It is no longer enough to be customer-centered and retailers have to create new value propositions to be part of consumers' lives: invisibility, indispensability and intimacy.
Our EY Future Consumer Index study shows us how COVID-19 accelerated fundamental changes in consumer sentiment and behavior, creating a time of great challenges for retailers. With the pandemic disrupting consumer habits around what they buy and how they buy, there is an opportunity to rethink strategies. And the retail industry is not going to go back to how it was.
Consumers have changed:
l 91% have changed the way they buy
l 54% have changed the products they buy
l 80% have to think more carefully where they spend their money
To win in this environment, retailers will have to transform and evolve from a customer centricity model to one of customer integration. This means not only understanding the consumer, but also becoming an integral part of his life.
We identified 3 ways to integrate in the consumer's life, as they are redefining the rules of involvement:
l Invisibility - offering customers an invisible and time-saving convenience (51% will share data to auto-replenish their shopping cart)
l indispensability - solving customer problems in a way that makes them indispensable (61% will share data for personalized promotions and opportunities)
l intimacy - creating customer experiences that are so satisfying and rewarding that they choose to make the retailer an intimate part of their life (64% will reevaluate how they spend their time on the things they value most)
Only retailers who anticipate these changes will be able to successfully integrate into the life of each customer. The challenge is to understand what the customer really wants, to shape a value proposition that is right for that customer, and then deliver it with the right experience, variety and price, at the right time.
The 3 opportunities to become more integrated in the customer's life map with three value propositions:
1. The time saver - focus on speed, convenience and efficiency to save customers time; minimization of pain points in order to integrate perfectly and invisibly into consumers' lives;
2. The problem solver - creating customized solutions for customers; aggregation of goods and services in holistic packages that deliver results to the specific needs of consumers (don't just sell products);
3. The creator of experiences - focus on providing enriching experiences; potentially being able to charge a premium on sales, because customers want to spend time shopping in their digital and physical spaces.
Retailers have to move from where they are today to where customers want them to be, listening to them and being able to understand what they want and when they want it. They have to invest or create partnerships to be wherever the consumer is and whenever he needs them, becoming a truly data driven business, integrating into the lives of customers and being relevant to them.