Doomsday predictions of a “retail apocalypse” notwithstanding, industry disruptions including thousands of store closings and many bankruptcy filings provide opportunities for brands to grow their customer relationships, according to a new study from Deloitte Digital and Salesforce.
Even as reports of closures and filings continue, Deloitte and Salesforce project that brick-and-mortar retail will grow by $36 billion over the next four years, while ecommerce will outstrip it, increasing by $50 billion in the same period.
The study found that retail spend has outperformed GDP and risen every year since 2009. In 2017, 44% of consumers reported spending more on retail than in 2016, with only 14% saying they spent less.
Deloitte and Salesforce found that the rise of technologies such as artificial intelligence, machine learning, augmented and virtual reality are allowing brands to create more personalized experiences that drive increased loyalty.
According to the study, brands must understand four disruptions to succeed in coming years. The first is consumer disruption, including expectations for speed and convenience. Technological disruption includes the tendency of consumers to research products on their mobile devices while in the store and increasing personalization.
The competitive disruption pits brands against marketplaces, pure-plays and new business models like subscription services, as well as giants like Amazon and Walmart attract new customers in a variety of categories.
Lastly, economic disruption relates to more discount or price-based and premium brands, with those in the middle falling behind.
Nearly 60% of brands said their unique value proposition is based on product quality and uniqueness, compared to 11% for price and 6% for convenience, the study found.
Brands must think beyond product as a differentiator and become more granular in how they identify and satisfy a customer’s needs and wants, Deloitte and Salesforce found. Providing frictionless experiences across marketing, commerce and service touchpoints, from the offer to the store or website through fulfillment and post purchase, is increasingly being used as a way for brands to set themselves apart aside from product.