The retail scene is shifting rapidly, and it has become more important for companies to understand their customers and what drives their businesses.
For many omnichannel merchants, this is a balancing act between investing in their e-commerce infrastructure and marketing, while adapting their brick-and-mortar stores to meet customer needs, accordion to Ellen Rodriguez, managing director of PwC.
Speaking at the Apparel Importers & Transportation Conference put on by the U.S. Fashion Industry Association (USFIA) and American Import Shippers Association (AISA) in New York City Wednesday, Rodriguez said there are four megatrends happening in the marketplace that will shift the way retail operates.
“This has an impact on our economy and has an impact on how retailers are responding,” Rodriguez said.
And the consumer is really at the root of it all.
“The consumer is saying I want a more personalized experience,” she said. “They’re also saying I’m going to change my habits in terms of how I engage the traditional apparel categories.”
They are also aware of the wider array of consumer choices and are showing they’re open to trying new formats, she said.
“So the entrepreneurial spirit is alive in our industry,” Rodriguez said. “Consumers are driving the bus and they are saying, ‘hear me, engage with me, value me.’ This is having a huge impact on how retailers and apparel manufacturers are engaging their customers.”
Highlight the results of a recent PwC survey that showed 75 percent of millennials said experiences are more important than items and purchases, Rodriquez also said 65 percent of consumers are saying positive experience is more important to building brand awareness and loyalty than advertising.
“That’s huge because companies spend so much time planning and expanding marketing dollars,” she said. “Now they have to think ‘am I spending those marketing dollars correctly? Do I need to have a 360-degree holistic approach giving the right experience to our consumers?’”
According to Rodriguez, 37 percent of PwC’s retail customers say they are investing more in their stores, even as they grow their digital commerce businesses.
“I know there’s a lot of hype about digital and e-commerce, but 50 percent of us still want to shop in a store,” she said. “So let’s not forget the importance of the store, even if maybe it’s a harder environment for us to figure out the solutions. Always at the forefront of our minds is inventory and logistics, and how new companies are engaging and how older legacy companies are adapting to the changing environment.”
She said companies need to improve and adapt in this realm so newbies don’t come in and “steal your customers and their dollars.” This requires firms to be “more nimble and flexible” throughout their supply chains.
As for the holiday season, PwC’s annual study predicts consumers will spend 5 percent more this year than last, and 84 percent said they will spend the same or more this year. When consumers start shopping for the season, 70 percent will be focused on brands as the most important reason for making a purchase, according to the survey, even as, secondarily, they seek out bargains, look for a positive experience and can buy without stress.