By Phil Chang, Hubba
There’s a new era of commerce, one that no longer resembles the model that brands and retailers have been operating under for the past 20 years. For any business, the consumer has always been the end destination. Retail technology, however, has completely changed the journey.
The old model of commerce saw brands as manufacturers of products and retailers as the gatekeepers of what is commercially viable and appealing to consumers. This meant that the retailer controlled the conversation with the consumer, forcing brands to use trade marketing as their primary mode of communication.
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In the new frontier, the consumer leads the way. The omnichannel consumer is tech-savvy and looking for unique shopping experiences. They are on a constant hunt for information, and are discerning about the content surrounding the products they’re looking to buy. They also want to know everything they can about the story behind the brand.
With technologies like mobile payments, chatbots and apps, retailers and brands alike are able to reach consumers directly, whether it’s through point-of-sale systems or transactional programs on social media, like Instagram’s ‘Shop Now’ button. Whether businesses identify themselves as a brand or a retailer doesn’t actually matter — thanks to the new era of commerce, companies can now make their own product, find, market and socialize with potential consumers, and convert them too. They can also ship and fulfill all orders while tracking consumer feedback for future reference.
How exactly is this happening? There are a few key changes that have made this possible.
Technology Has Become An Enabler
Companies that embrace technology are faster and more adaptable. A retailer that knows how to spot and leverage technology can now accelerate their business and become fast movers in their industry. This actually gives them an edge over other players in the market because they are much more effective at satisfying the omnichannel consumers’ needs. Thanks to technology, a retailer isn’t limited to cash registers and their own web site. Pinterest, Instagram, Facebook and many other digital channels allow retailers to tell stories that convince consumers to purchase.
Zero Inventory Retailing
With the emergence of drop shipping, the conversation around who should have access to the consumer and who ultimately owns the transactional piece of the ‘path to purchase’ has changed. Traditional pain points such as cost of inventory and assortment competitiveness are irrelevant, because retailers don’t need to carry inventory now that they can offer every product their customer desires in the form of an ‘endless aisle’.
Drop shipping does something else too. For brands looking for new distribution, their process for expanding their clientele becomes easier. A brand can now list their products for sale with anyone who is technologically capable. This wasn’t possible in the old world and creates the opportunity for a company to morph from being just a brand to a distributer and a retailer.
When Everybody Carries The Same Product, How Do You Stand Out?
The new tension points in the path to purchase completely benefit the consumer. Retailers now need to differentiate themselves based on customer experience rather than just product assortment and create new shopping moments and new occasions for consumers to shop. That means better customer service, unique shopping experiences, and a seamless checkout process, among other things. You’ll hear this come up a lot when having conversations around the “last mile.”
It’s All About The Right Product In Front Of The Right Customer At The Right Time
When the consumer shops at Amazon, it doesn’t matter whether the product comes from a brand carried on Amazon, sold in Amazon’s marketplace or from one of Amazon’s own private label — all that matters is that Amazon is facilitating the transaction.
Ultimately, retailers of tomorrow don’t have to stock inventory at all as long as they are able to curate products their consumer will respond to and fulfill orders with efficiency and accuracy. Instagram recently announced expansion of their shopping feature to all fashion, apparel, jewelry and skin care brands. Does this make Instagram a retailer? The line between a brand and retailer is going to continue to blur. And the winner in all of this? The one that keeps the ever-evolving consumer in their sights.
This is an exciting time for retail and consumers. While the path to purchase remains true, zero inventory retailing creates an opportunity for brands, retailers and everyone in between to reach the consumer directly. What will you do to stand out and make your shopping experience one that makes the consumer come back to you?
Phil Chang is the Industry Lead and Retail Expert at Hubba and is responsible for uncovering emerging trends and insights that impact businesses engaged in commerce. He brings 20 years of experience in working with retailers and brands of all sizes across North America. In his role at Hubba, Chang helps both brands and retailers adapt to the new reality of retail and next generation of commerce. Chang is a frequent speaker at industry events in Canada and the U.S., across multiple verticals, and is a featured writer in trade publications such as Retail TouchPoints, PetProductNews, Bikebiz and others.
