7) Green initiatives will go main stream
Terms such as sustainability, reduced carbon footprint and
green supply chain will continue to become more prevalent in the marketplace. Retailers that just pay lip service to sustainable business practices and treat it
as a fad will do so at their own peril. In the short term, retailers and brands
that demonstrate genuine commitment to environmental stewardship will be
rewarded by the growing green consumerism movement by way of greater brand
loyalty and higher margins, especially in the premium market segment. In the
medium to long term, sustainability will be a factor that consumers expect.
Early adopters will enjoy significant first mover advantage
while laggards will have a tough time playing catch up. Apparel retailers and
brands will be well served to prioritize sustainable business practices from
quick wins such as environmentally responsible packaging to medium- to
long-term initiatives such as eco-friendly product lifecycle management and
carbon footprint reduction in manufacturing, transportation and stores.
8) Fast fashion and customization will prompt
retailers and brands to acquire greater control over their supply chain
Consumers are increasingly demanding products that are
tailored to their individual lifestyle needs and aspirations. Leading retailers
and brands have begun paying attention to the growing demand for customization.
For example, both Nike and adidas offer customers an online template to
customize their shoes completely.
The Internet era and the omnipresent media have presented
consumers with myriad choices and instant information resulting in highly
transient fashion trends and radically shortened product lifecycles.
Retailers with long product lead times and traditional
seasonal cycles are rapidly losing market share to fast-fashion exponents such
as Zara and H&M. However, customized products and the fast-fashion model
require exceedingly flexible and responsive supply chains. Leading apparel
retailers will become more vertically integrated and closely collaborate with
their suppliers in order to respond to rapidly changing customer demand.
9) Uncommon insights from common sources
As the competitive environment gets tougher, retailers will
need to hone their competitive intelligence capabilities, no longer being able
to rely on half-hearted or manually intensive ways of capturing competitive
intelligence. The leaders will build capabilities that help them understand
their competition's latest price change or promotion and enable them to quickly
react to their competitor's latest move.
Retailers will combine traditional sources such as
syndicated data with new technologies such as web harvesting to leverage
"common" sources that have not been tapped before. Tools such as
social web analytics and blog scraping will allow leading retailers and brands
to "listen" to their customers by continuously monitoring their
conversations with each other rather than relying on periodic focus group
discussions and surveys. This will help them respond faster to perceived
trends, customer complaints, unmet needs, etc.
The above trends are a result of the unprecedented economic
uncertainty, massive changes in the technological landscape and paradigm shifts
in consumer behavior. Leading retailers and brands are focusing on these trends
to change adversity into opportunity.
Followers would do well to examine their operations in
relation to these trends, as it will help them ride out the perfect storm
currently facing the retail industry, and ensure that they are in line to
succeed in 2009 and in the years that follow. What is required is an approach
much more imaginative; the retailer needs to develop an intuitive relationship
with the customer. As per the words of Jack Trout, "People
want to express themselves through brands- brands express a person's
personality and the people they like to be with."
Source:
AEPC Weekly
