Why Now’s the Time for Retail Transformation
Prophet partnered with retail innovation consultancy PSFK to unearth transformative strategies retailers are using to successfully respond to retail disruption.
Has any sector experienced as much disruption as retail in the last few decades? From the rise of e-commerce and Amazon to the financial crisis and the global pandemic, retail organizations of all types have been buffeted by turbulence again and again since the turn of the century. That’s life on the front lines of the global economy.
Retail, however, has shown remarkable resilience. For every retail chain that has struggled, or succumbed, a variety of new concepts have emerged. While shoppers have embraced all forms of digital shopping – from e-commerce and social commerce to BOPIS (buy online, pick up in-store) and the metaverse – retailers that develop truly memorable experiences continue to attract passionate fans and advocates. These firms look at every existential threat as an invitation to differentiate, innovate and connect with consumers in relevant and compelling ways.
The bottom line is that retailers have no choice but to transform – and at a greater scale and faster pace than ever before. Reflecting that reality, Prophet partnered with PSFK, a leading retail innovation consultancy, to identify the most powerful and transformative trends shaping the retail landscape. Our new report – Retail Transformation Through Innovation – illustrates how these forces are playing out in the market today and what innovators are doing to set new standards in everything from operational excellence and organizational purpose to personalized experiences and advanced technology. It also shares recommended actions for retailers looking to drive uncommon growth through transformation.
Our report explores the implications and imperatives for retailers relative to four primary themes:
Connecting Data & Consumer Insights
By layering AI and machine learning across connected data streams, retailers are optimizing services and driving operational efficiencies across production systems, digital platforms and physical footprints. The most effective use of technology involves connecting data and consumer insights through data-Informed design and connected profiles. It also enables firms to optimize operations via intelligent inventory and more effective sharing of resources.
Intelligent Guidance & Support
Retailers are leveraging new technology and models to speak, listen and market to consumers in more personalized ways. For instance, by enhancing their contextual search capabilities and launching personal shopping bots, retailers are providing intelligent guidance and support that make it easier for consumers to find what they want. Similarly, retailers are seizing opportunities associated with social commerce by launching shoppable creative and engaging consumer affiliates.
Next-Gen Omnichannel Retail
Retailers are evolving the omnichannel experience for today’s hyper-connected consumer by designing models that tap into virtual selling experiences and expand service offerings. Success in the next generation of omnichannel retail will be all about delivering solutions, rather than just selling products. That will certainly be true in the metaverse as more consumers’ lives are spent in digital realms and cross-world commerce becomes the norm.
Environmental & Social Impact Initiatives
Retailers are applying purpose-led strategies across the business and driving measurable impact by directly tying environmental, social and governance (ESG) initiatives to their operations, culture, and product offerings. At the community level, brands are engaging consumers through inclusive and equitable programs linked to their revenue and business models. They are also embracing full lifecycle design through circular supply chains and repair and repurposing programs that reduce waste.
Though the industry has experienced much disruption, retailers have shown great creativity and resilience. Our report highlights many examples of bold innovation including retailers that are pivoting in the face of change. It also shares some recommended actions for those who may be just starting their transformation journey.
While the path to uncommon growth will be different for every retailer, it’s safe to say those that fully embrace the transformation imperative increase the likelihood of a successful journey.