State of Retail in Digital: 2022 and Beyond

Written by Troy Woolery

"Quality in a service or product is not what you put into in. It is what the customer gets out of it." -Peter Drucker 

As the shadows of the global pandemic gradually roll back, the harsh light will focus once again on those companies still trying to adjust to the new realities of where and how customers are shopping. Companies that have long relied on brand equity and/or product superiority must adapt to the modern retail landscape, one in which the service is now as important as the product itself. 

A recent KPMG Consumer Pulse Survey projected a 22% increase in grocery retail from the pre- pandemic data, with personal care products, apparel, prescription drugs, and personal appliances rounding out the top five retail categories. If the product itself was the key incentive for consumers, then several reputable companies would have endured the recent era of increased demand of product, even while the doors to the actual business remained closed. But that isn’t what happened. So, how did certain businesses thrive while so many other businesses met an untimely demise? Let's look at a few current trends that have driven retail    growth during uncertain times--times when consumers were forced to change how and where they purchase products. 

Changing consumer behaviors—and expectations 

Shoppers now purchase through smart phones, laptops, and other personal devices, often with heightened expectations for an experience that relates to their shopping habits and preferences. While personalization can no longer be considered a new trend, the new (and most significant) data point is the accuracy with which marketing campaigns can help guide consumers to purchase in ways that did not seem possible just a handful of years ago.  

Popular apps like Stylebook allow users to build collections of clothing items, mixing and matching products to align with their desired attire. With the heightened demand for customized experiences, expect to see more apps like these influencing consumer buying habits for years to come. 

Similarly, experiential retailing is a concept that relies heavily on consumer habits that are influenced by contextual factors: customer service, accessibility, ease of use, familiarity of the sales team and other factors. Atmospheric influencers, such as the layout of retail outlets, excellent user experience and design of e-commerce sites, can also drive consumer spending. The key distinction here is that experiential retailing is heavily reliant upon buyer to seller communication, often in real time.  

Here are some additional features of experiential retailing: 

• Online chatbots or one-to-one video chats between customers and sales assistants where the latest products can be examined and demonstrated 
• Growing customer demand to get "hands-on" with products in a virtual environment, and augmented reality (AR) and virtual reality (VR) 

Delivery innovations provide new and exciting fulfillment options as consumers are delighted by personalized, experiential shopping options. In the retail industry, "the last mile" is usually the hardest, and more companies are looking for more efficient ways to expand their supply chains with new fulfillment options.  

Companies should consider shifting their fulfillment strategies to incorporate both business intelligence and predictive analytics to help achieve the following: 

• Deliver products more proficiently (and quickly) than ever before 
• Break away from the sole dependency on shipping companies worldwide

Within our Managed Services division at Vaco, our expertise in both digital and data position us a trusted partner to our clients, who not only look for our strategic guidance but also functional execution.  

Our Managed Services experts provide strategic and operational support to scale digital initiatives within retail-driven   client goals, including: 

• Digital platform strategy and capabilities focusing on people, processes, and delivery culture: 
• Building internal teams and resources 
• Working with our clients to accurately scope body of work at scale 
• Partnering with our clients on execution strategies 
• Marketing automation to manage tasks, personalized messaging, precisely target consumers, and scale-up campaigns across multiple channels 
• Modern data platform to help manage the execution (both strategic and operational) for a wide array of end users (customers, clients, platform at scale) 

Learn more about Vaco Digital Solutions, Data, and our other managed services.  

Vaco Contact Information: 

Vaco Managed Services, please visit here

Digital transformation capabilities, please contact Troy Woolery at twoolery@vaco.com

Cloud and data modernization capabilities, please contact Brian Henn at bhenn@vaco.com 

Recommended literature/articles for further reading: 

Vaco Digital Insights: https://www.vaco.com/insights-spotlights/webinars/process-the-unsung-hero-of- digital-transformation/ 

Forbes Article on Retail Trends: https://www.forbes.com/sites/bernardmarr/2022/01/12/the-five- biggest-retail-tech-trends-in-2022/?sh=6972fd2e36d4 

McKinsey Study on Omnichannel Delivery: https://www.mckinsey.com/industries/retail/our- insights/retails-need-for-speed-unlocking-value-in-omnichannel-delivery