In the world of retail, where change is the only constant, retailers and brands form an intricate partnership that fuels sales. Retailers, as the frontline warriors, engage directly with customers, translating their needs into sales, while brands, as innovators, create products that resonate with consumers on a deeper level.
The question of who drives sales – retailers or brands – is complex, and the answer lies in understanding the evolved dynamics of their partnership. Once a simple supply-demand relationship, it is now a nuanced collaboration of shared responsibility and co-creation.
As we explore this symbiotic relationship, we'll uncover the secrets to thriving amidst challenges in the modern retail landscape:
The word "retail" has a rich and varied history, dating back to the Middle Ages. The term originates from the Old French word "retaillier," which implies "to cut back, cut off, or divide." This term painted a picture of selling goods in smaller quantities, a principle that is still central to modern retailing.
In its infancy, retail was a straightforward barter system — goods exchanged for other goods or money. This trade often occurred in open marketplaces or fairs. As societies grew and expanded, so did trade routes, leading to the birth of shops and stalls in fixed locations.
Fast forward to the 18th century, the industrial revolution ushered in a new era for retail. Production skyrocketed, and goods became readily available to the masses. This period witnessed the rise of department stores, providing an assortment of products under one roof. These stores evolved into social hubs where people could shop, meet friends, and indulge in leisure time.
The 20th century saw yet another transformation in the retail landscape with the advent of supermarkets and shopping malls. Supermarkets introduced a self-service approach to shopping, enabling customers to browse and select products at their own pace. Shopping malls brought together multiple stores in one place, offering convenience and variety to consumers.
Towards the end of the 20th century, ecommerce emerged, revolutionizing retail once again. Online shopping offered unrivaled convenience, allowing customers to shop from the comfort of their homes. Retailers began to establish an online presence, leading to the omnichannel retail model we see today.
Today, the retail industry continues to evolve, shaped by technological advancements and changing customer expectations. Despite the challenges covered in the next section, the essence of retail remains unchanged from centuries ago: to provide goods to consumers in a way that meets their needs and enhances their shopping experience.
As a retailer, you're no longer just competing on price or product quality — you're competing on experience. In fact, a staggering 88% of consumers surveyed by Salesforce emphasized that their experience with a company holds as much weight as the products or services the company offers.
But offering a superior experience isn't always straightforward in the digital age. For starters, your customers are spoilt for choice. They have an entire universe of products at their fingertips, and they're spending more time than ever vetting other options, reading reviews, and watching testimonial videos before making a purchase. This abundance of options, while empowering for consumers, can lead to choice overload, causing stress and often resulting in declining brand loyalty.
And then there's the rise of omnichannel retail. Customers don't see 'online' and 'offline' as separate entities anymore. Even though 96% of Americans shop online, they expect to move effortlessly between these spaces. If they see a dress on your Instagram page, they expect to find the same dress on your website and in your physical store. If they can't, it's not just a missed sale; it's a dent in their experience with your brand.
So, who is responsible for ensuring retail sales in this new landscape? Is it the retailer or the brand? The answer isn't clear-cut — both retailers and brands have a part to play in meeting and exceeding these sky-high customer expectations. It's a shared responsibility that requires understanding, innovation, and above all, a commitment to delivering an exceptional customer journey at every turn, which we'll cover in the next few sections.
The journey of modern retail management has been nothing short of a rollercoaster ride. The landscape has transformed dramatically from the traditional brick-and-mortar stores to an omnichannel approach, but luckily, here are five steps you can take to thrive in this new era of retail management:
As we approach the end of 2023, leaders in the luxury market have set their sights on growth. This focus is backed by impressive figures — the luxury goods market boasted revenues exceeding $312 billion in 2022 alone, and the market is projected to grow by more than 5% annually.
Brands are responding to this opportunity with innovation and adaptability as they navigate the decline of traditional department stores. They're moving away from a simple product-on-shelf strategy, instead choosing to present personalized merchandise experiences. Collections, not units, are the new retail language.
Discounts and incentives still play a role, but what really drives sell-through with customers is comprehensive support from brands. Retail branding has become a multifaceted challenge that requires unique positioning and collaboration with other manufacturers, as they have the power to influence customer perception through marketing and branding efforts.
The world of retail has evolved, with the spotlight shifting from physical stores to cross-channel consistency and superior customer experience. Both online and offline, delivering a consistent and high-quality brand experience is critical. Brands like Apple and Starbucks exemplify this with their unparalleled retail experiences.
In this context, the old strategy of simply opening more stores falls short. The new currency is trust, community, sustainable sourcing, and value for money. Technology is no longer an option, but a necessity in creating and delivering these experiences.
Brands that fail to invest in individual experiences risk falling out of consideration. However, those who harness big data analytics capabilities can create personalized experiences and revamp loyalty programs, thereby strengthening their brand equity.
Navigating today's dynamic retail landscape is no small feat. The game has changed, with omnichannel retail and customer experience taking center stage. Success now hinges on your adaptability, innovation, and ability to prioritize the customer journey.
At ThirdChannel, we're here to guide you through these complexities. Our innovative retail solutions empower you to refine your strategies and optimize every customer interaction. As we look to a future driven by technology and personalized experiences, don't just watch the evolution of retail — schedule a demo and learn how to be a part of it.