by Antonis Zairis and Thanos Efthymiopoulos*
2020 is undoubtedly considered as a year of dramatic changes in Society, Economy and Politics. The global pandemic crisis is shaping the consumer and retail landscape of tomorrow.
Social distance imposed new flexible working conditions and cultivated the model of a new, more conscious consumption. The powerful catalyst named COVID-19 -in the context of this new landscape- focuses on four (4) key macro-economic trends to which Retail is exposed and which has such an impact that rearrangement and readjustment to the logic of shaping a new Emerging Retail Strategy are considered necessary to meet the next day challenges.
The first of these trends refers to the digital society. The adoption of internet and technology solutions will enable connected life in a world where consumers will use different devices to find exciting experiences, whenever and wherever they are, through new maintenance services that incorporate video, voice and unlimited data.
These are the institutions foreshadowed the environment of this digital society: Firstly, the gradual but steady e-commerce growth since 2018 in the EU, representing a penetration rate of 51% with annual per capita expenditures of 1733 euros. Secondly, the resurgence of physical presence, while retailers re-examining their physical presence in their stores, reducing at the same time their presence as a footprint in secondary locations and promoting the development of larger flagship stores in capital zones - areas of high purchasing interest. Thirdly, the Multichannel Integration that integrates the magic electronic big world- ensuring a new type of experience that meets the current consumer perception and expectations. Fourthly, the digital customer-experience index ratings and the brand value interrelationship.
It can be deduced from the above that there is a need to adopt an integrated multichannel strategy, combining both physical and virtual reality.
The second trend refers to mobility and urbanization. The increase of the population living in cities (urbanization), the globalization, the technological development and the mobility revolution are reshaping urban ecosystems.
The existing micro-indications concern: Firstly, the urbanization, while the population growth is projected to reach approximately the percentage of 84% by 2050 in the major cities of the European Union. Secondly, mobility with major cities adopting e-mobility policies, on the one hand, and consumers using many alternative travel modes, on the other hand. Thirdly, work flexibility that is a major change in work-from-home policies over the last 10 years. It is a growing trend for employees to adjust their work performance in the workplace.
New Strategies at this point refer to the integration of business ecosystems and infrastructures in a landscape with: purely urban characteristics, increased mobility and a new flexible work environment where work will be performed largely at a distance.
The third trend concerns the changing consumer behavior, consumer’s new value standards and habits. Consumers are giving emphasis to self-improvement and health, but at the same time they are obsessed by a deep skepticism concerning the adequacy of planet’s natural resources. Issues such as sustainability, health, wellness and conscious consumption are now essential components of choices and priorities for the modern consumer.
The existing indications are related, firstly, to a healthier lifestyle but also to substantial changes in the shopping cart- with focus on better nutrition, personal hygiene, mental health and beauty.
Secondly, with a targeted consumption- as the ten year economic crisis had prepared us for the behavior of Consumers who make choices only when they are able to choose what to consume. Fashion, and especially fast fashion, is already under a lot of pressure.
Thirdly, with the environmental sustainability that is at the forefront of generation Z, which affects and older generations. Fourthly, the special pleasure experience where "exist" becomes more important than "possess", as "exist" is simply associated with the reason for the existence of Consumers. In the context of this new Strategy, traditional shopping is constantly challenged, since the focus now is not only on the satisfaction of operational needs, but also on their dependence and interconnection with the Customer Personality- while senses that fuel and stimulate consumer demand to focus on the brand value content.
This is the phase of overcoming the satisfaction of operational needs and identifying products with the customer’s personality, through which customers have a role. This process could be carried out -with the same success- in an online environment through digital storefronts and shelves for products that would "attract" consumer interest to live this unforgettable experience, while shopping from home.
The fourth and last trend refers to the population ageing, and especially in western countries where has been recorded an explosive rise. A new system of needs and expectations demands satisfaction through new products that should be able to meet the adult and older buyers’ changing shopping habits. The related indications refer to this Silver Market Segment that represents the ages over 55 years. This significant category, both in terms of value and volume, is the fastest growing in the entire European Union. It should be noted that by 2030 this category will represent approximately the 41% of the population of the European Union, and approximately the 38% of the income value of the total population.
The Strategy for the older ages focuses on the different prioritization of needs and expectations, but also on the different perception of the free time spending. Another thing that deserves to be added to this category of buyers is the high degree of influence that younger generations have on them, which means careful attention to the design of the product category mix.
In this context of the new emerging Retail Strategies, it must always be kept in mind that the design of a Strategy must be preceded by a triptych of clear answers- as regards the Manager. This concerns, on the one hand, the understanding of the new case-Business game and, on the other hand, how to implement in practice this new retail model, which means: reorganization and reassessment of relationships with market players (suppliers, customers, competitors, etc.), reorganization of the company’s value system, redefinition of rules and tactics that will be implemented, and redefinition of the actions that must be taken- following a strict schedule.
*Assoc. Vice President of SELPE, Assistant Professor of Business Administration University of Neapolis, Cyprus & “American Economic Association” member and Country Representative for Greece, Investment & Asset management manager of Sonae Sierra, for Southeastern Europe
By: N. Peter Kramer
