Findings to sub-question one

For retailers, it is becoming increasingly important to be aware of consumer trends, as they are forced to act more and more customer centric. As IV5 explains, the brand used to control the customer back in the day. Today it is the other way around:

customers control the brand. The findings to this question were coded in form of trends. The results were coded by consumer trends.

Sub-Q1: Which are the most relevant consumer trends that will have an impact on the channel setup of retailers in the future?

1. Experience Shopping

The most in-depth discussed consumer trend, which was covered by all experts, is the trend Experience Shopping. All experts agreed that a great customer experience throughout the entire customer journey nowadays is of highest importance for retailers in the race for satisfied customers. IV3, IV7 and IV8 bring up the point that physical retailers are expecting customers to put in the effort and come into their store. Hence in return, an extraordinary shopping experience has to be delivered. Both come to the conclusion that an experience, which goes beyond what customers can expect from the online channel, is necessary. IV6 agrees, adding that the product is important but customers come to the store because of the experience around the product and the additional value added service which can be made use of. IV6 also mentions that it is

extremely tough but necessary to transfer an experience through online channels. If retailers are not able to offer an experience to their customer, they most certainly will shop elsewhere in the long run. For the interviewee it is a key element to develop a competitive advantage over other players operating in the market. IV2, IV3, IV4 and IV7 believe that technology can further enhance the customer experience throughout all channel phases.

‘How do you differentiate yourself from E-Commerce? By giving the customer an experience that he cannot have, when shopping online. I have to offer something exciting and fascinating (...) through which I can differentiate myself (...).’ (IV2) In the awareness-phase, the experience heavily relies on the communication of the company. IV5, IV10 and IV12 argue that retailers should focus more on building a story around a product rather than talking about the product itself. Moving forward, it is key to engage people in the product and brand communication. Great storytelling and an educational aspect to a retailer’s communication strategy have been proven to be a vital toll to improve the experience in the awareness-phase. IV5 further adds that storytelling helps recharge a brand with emotions and feelings and improves customer retention. As explained by IV10, this can help create a new level of dialogues between retailers and customers. In most cases, the target audience already has a clear idea of how such stories should be designed, IV12 states. They share their stories through social media platforms, freely available for retailers to use.

Seven experts specifically mention the importance of great customer service in context with experience shopping in the phases evaluation and aftersales. This counts not only for physical but also for digital retail. IV2, IV3 and IV8 conclude that you can offer thousands of experiences throughout the customer journey but it is crucial to have sales assistants who are well trained, service oriented, friendly and also service incited.

Expert knowledge is a must, as customers already are well informed when entering the a and want to learn beyond what is available on the Internet. IV1 also remarks that especially for luxury good retailers, the service crucial to the customer satisfaction.

They want to be pampered in any possible way and enjoy world-class service to celebrate the moment of the purchase. The factor personalization in context with customer service will be addressed in the following trend.

‘(...) Having product Geniuses, that help me if I have questions, that are fully service orientated and that are able to transport excitement, that surely will play a very big

role (...).’ (IV2)

Even in the delivery-phase, experts see the necessity of delivering an experience. By packing product in fancy and high quality gift boxes and delivering it through a courier, retailers can surprise customers with an unexpected experience. IV1 tells from experience that it can induce some sort of aha-experience that customers are very excited about. Furthermore, IV8 explains that the endorphins from the moment of purchase until the moment of delivery can consistently be held high, by feeding the customer with product related information throughout the delivery-phase. By doing so, the customer stays hyped about the purchased product throughout a phase where usually not much interaction possibilities exist. IV12 also adds that successful retailers give customers an unboxing-feeling which increases the experience further.

‘That is a high quality product, (…) you have a nicely designed return note packed in a thick envelope.’ (IV12)

2. Personalization

Ten experts also discussed the trend Personalization, which is closely linked to the previous trend and identified it in all distinct channel phases. In the past, customers were bombarded with content, no matter if there was an interest or not. IV3 and IV10 claim that instead, retailers should focus on customizing their communications, exposing customers only to information about products and services they are actually interested in. As in the future customers will not even have time to read reviews and recommendations, personalization will further gain importance, IV10 explains.

They want a magical ‘(…) advisor, that can pull out all information and say look at this, and this, and this. (IV10)

Six experts agree that especially in the phases awareness and evaluation retailers need to act predictively and preselect articles that suit customer needs as they have no interest in browsing through hundreds and thousands of products themselves. IV12 believes that in the future, the focus point will not be to make sales but about satisfying customer needs with the right offer at the right time. The interviewee refers to the problem that customers are often penetrated at the wrong moment, sometimes even

right after a purchase was completed. IV8 agrees with this statement, noticing that retailers should focus retailers should focus on delivering solutions, rather than products. IV6 also mentions that in the future each individual customer would have to receive personalized newsletters, each displaying a different set of products, as customers have very heterogeneous interests in life. IV12 is sure this development will also be seen more often on retailers’ websites whereby only products of interest will be shown to each individual customer, personalizing the online experience. However, personalization does not only happen online but also in the physical PoS. IV7 says that the goal must be to address each customer in a personalized manner. Retailers will need to know their customers inside and out, who they are and know what they like to make personalized offers and recommendations. In this context, IV2 and IV3 again bring up the idea of Geniuses. They can take a customer’s anxiety, learn about consumer needs and refer to the most useful product, not the one with the best margin.

Even during the delivery-phase, experts are discussing the importance of personalization. As IV1, IV3 and IV12 explain, customers can be positively surprised by adding some sort of personal note to the package. All services should always be customer centric and customer specified, concludes IV3.

IV7 and IV8 believe as a result of personalization, the two phases aftersales and awareness will be closely linked. In a perfect world, retailers are aware of the context of the customer. They know, which articles he owns, which services he needs, and they are thinking for the customer, IV8 and IV12 explain. IV1 and IV12 state that Personalization allows retailers to optimize their upselling and cross-selling potential in an appropriate way, without scaring off their customers.

3. Omni-Channel Shopping

The second most discussed trend, again mentioned by all interviewees, is the trend Channel Shopping, which also occurs in all channel phases. IV7 defines Omni-Channel Shopping as behaviour, where customers are seamlessly switching between different channels, interacting through both, physical and online touch points during their customer journey.

‘(...) Customers are thinking in terms of brands, and do not care anymore about the way they interact with brands.’ (IV9)

Awareness and evaluation are happening everywhere nowadays, states IV6. The customer does not want to be held back by rigid structures anymore. IV5 states that the name of the game is to connect physical with digital. By now, this should be a daily routine of retailers but it barely has been achieved by many thus far. Customers always want to have 100% access to all information, as they have huge time constraints and do not want to make the run to store with the risk of not being able to purchase the desired product, says IV11. Thus, they need to be able to check which store has the desired product on stock. Furthermore, the integration of channels and touch points is inevitable, as customers want to be able to seamlessly switch throughout their customer journey, says the majority of the experts. Furthermore, IV1, IV3 and IV8 also mention that a consistent and orchestrated message throughout all channels and touch points is essential. If that is not the case, customers often tend to abandon the purchase, says IV8. No matter in which stage of the customer journey the customer currently is, the story or message has to be aligned to what he has previously seen and still will see, says IV12.

In the purchase and delivery phase, customers want to purchase no matter where they currently are, how they want to conduct their purchases and through which device.

Customers simply want to purchase, IV6 explains. IV5 and IV7 state that retailers should make use of the different possibilities for delivering a product to their customers. One result of omni-channel shopping is Click&Collect confirm IV2, IV3 and IV12. Customers are able to reserve or purchase products online, then go to the physical store to try and eventually purchase the product.

‘There you should not just follow a stiff process, instead being able offer to the customer in this situation what he needs’ (IV7)

In the aftersales phase, IV2, IV5 and IV9 mention the importance of the customer being able to freely choose a channel through which he wants to communicate. Experts confirmed how important orchestrated information is in this phase as well, as the customer expects quick and reliable results that help him solve the problem independently of how he communicates with the retailer.

4. Social Shopping

Another majorly discussed trend, which was mostly identified in the phases awareness and evaluation, is the trend Social Shopping which was discussed by ten interviewees

throughout the empirical study. It is a trend predominant in younger generations, IV5 observes, as they grow up aside with the development of the Internet and Social Media.

The experts all agree, that an increasing amount of customers are following brands and companies on Social Media to stay informed about latest product releases and trends.

From the perspective of a retailer, Social Media should be seen as a channel which can be utilized to load a brand with emotions and transfer information to the customer, says IV1. IV12 does not see Social Media anymore as just a platform where you can write reviews in the form of texts and give a rating from one to five stars. Social Media rather developed to be a platform for user-generated content that markets products and brands by itself.

‘Insofar that actually brings us user-content directly to our page - on top of that for free.’ (IV12)

An increasing amount of customers are utilizing digital channels to find more detailed information about products and services from other customers during the evaluation phase. IV8 explains that the customer simply wants to neutrally benchmark which exact product is the best for him.

As a customer you compare most of the times the price through different portals, or you take a detailed look into the reviews of others, what they bought themselves. (...)

That helps you most of the time.’ (IV3)

In this phase, the customer will simply use all available sources for information.

Communities as well as networks to exchange information about specific products and services will gain further importance in the future, IV6 adds. Through reading reviews, evaluations and experiences from others, the customers are trying to get a better image of what they actually buy. Thus, IV9 comes to the conclusion that channels in the future will then work best when they allow some sort of social interaction with others and embody a community character.

5. Web- & Showrooming

Towards the two trends Web- & Showrooming, the experts very have homogenous opinions. Six out of twelve interviewees are discussing this trend in the awareness and evaluation phase. There is currently a large development on-going in the retail industry because of Web- & Showrooming, IV4 says.

Especially in the trend Showrooming, experts see a great risk for retailers. Speaking very critically about this trend, IV9 says that nowadays there is practically no brand loyalty anymore. Customers enter retail stores, scan the product portfolio and tab onto freely available services but then switch to the online channel and purchase it from the retailer they are most comfortable with or offers the best price, says IV3. As a result of this trend, IV7 is convinced that it is essential for retailers to have both an online store and a physical PoS. Customers need a venue, where they can gather information and experience the products and the brand. IV4 and IV0 believe that in the future the physical store will rather become some sort of showroom whose main objective it is to allow customers to experience the physical attributes of a product. IV10 further explains that retailers simply have to ensure that the entire product portfolio is available at least once or twice in the store for customers to try. If the customer can be convinced of a purchase, the staff member places an order through the online store and the product is delivered directly to the customer’s house. This allows retailers to carry way less inventory at the PoS and use the available space more effectively, IV10 and IV12 conclude. The damage dealt through Web- & Showrooming can be minimized.

The data also has shown that retailers which are primarily focussing on selling expensive goods have to deal with the trend Webrooming in particular. Most information was collected in advance online, customers have researched the product before entering the stores and often know more about the product than the sales staff themselves, IV4, IV8 and IV10 explain. IV1 states that customers mostly already know before entering a store which product in particular they want to buy, as they have conducted their Webrooming activities before the store visit. Yet, they are still keen to be shown each and every product, which is similar to the product they have in mind.

‘It is not anymore about which features the car has, or what the car offers. Such things most of the customers already are aware of. Here, it is truly is about the

purchase.’ (IV4)

6. Now-Economy

A trend mainly classified for the two phases purchase and delivery in the following will be called Now Economy. Seven out of twelve experts mentioned the trend in their answers to question one. They all agree on one point that it is key to a retailer’s success to ensure immediate satisfaction of customer needs.

‘He simply wants to have it quick, very comfortable and uncomplicated’, says IV9 about the today’s customer. At this point, Amazon is often taken as a benchmark, which both online and physical retailers have to close up to. Specifically for the check-out process, IV8 says, that technically the standard has to be the one-click-buy of Amazon. The interviewee further adds that if the customer has been convinced to conduct a purchase, retailers have to prevent any sort of circumstances which may cause the customer to bounce during the checkout process. This can only be achieved, if processes are simple and the UX-design is adapted to the customer needs, IV8 says.

IV6 also explains that the demand for the see-now buy-now effect will increase even further in the future. Customers want to have the purchased products now and any waiting period is too long. Fast and free delivery is already seen as a hygiene factor, a service, which should be completely free in most cases. It will be unacceptable to let customers wait several days for the delivery, says IV3. On top of that, IV1, IV6, IV8 and IV12 agree that same-day-delivery simply is a must these days, especially in urban areas, where paths are short and unlimited delivery options exist. A service that used to be a unique selling proposition in the past is expected by customers today, says IV6.

IV8 supports this statement, again referring to the endorphins that are released in the customer’s body at the moment of purchase. The interviewee explains the importance of prolonging the lifetime of endorphins. They have to be held high until satisfaction eventuates, otherwise the excitement and emotions vanish and the experience is perceived as way less than it actually is.

7. Sustainability & Corporate Social Responsibility

Four out of twelve experts briefly discussed the trends sustainability and CSR mostly for the awareness, evaluation and delivery-phase. Experts are noting that customers are increasingly looking into the companies they are spending their money on.

Sustainability and CSR have proven to be a relevant factor during the buying decision.

On top of that, customers seem to be willing to pay more for products and services if they can validate that a company has a positive impact on the world, says IV12.

‘So we see a big increase in people not only buying because of the product, but the actual story behind it, that it actually aligns with their personal things.’ (IV10)

As a result, IV1 and IV12 conclude that retailers should look into sustainable and environmental friendly materials for the manufacturing of their products. Furthermore, they should try using considerably less plastic and dispatch the products in 100%

recyclable packages, IV12 mentions.

CSR should not be ignored by retailers, IV9 notes. The past has shown, that at times, when there is bad news about the labour conditions at Amazon, customers seem to look for alternatives to conduct their online shopping activities. The interviewee explains that this effect also can be noticed shortly after certain topics were picked up

CSR should not be ignored by retailers, IV9 notes. The past has shown, that at times, when there is bad news about the labour conditions at Amazon, customers seem to look for alternatives to conduct their online shopping activities. The interviewee explains that this effect also can be noticed shortly after certain topics were picked up