Rapid adoption of technology sees shift in shopping habits
While convergence is not new, the way consumers interact with technology is constantly changing. Helen Dickinson, head of retail at KPMG, discusses the latest trend: the converged lifestyle and what it means for retailers.
The relationship between consumers and technology is a fascinating one. Consumers increasingly talk about how technology enables their lifestyle. From buying goods online to keeping up with friends on social networks, they seem to be more and more reliant on a range of technologies that perform important – although often overlapping – tasks. The array of devices on offer all seem to increasingly serve one purpose: to enable consumers to get what they want, when they want it. And the converged lifestyle appears here to stay, with consumers adopting new technology faster than ever before.
So, what does this trend mean for a traditional retail business?
For retailers the answer lies firmly with their customers. Retailers must determine where and how their customers now want to buy their products. KPMG’s 2011 Consumers and Convergence Survey found that consumer habits have changed. Across almost every category of goods, the majority of respondents from across all continents said they preferred to purchase items online rather than at a physical store. In fact, almost 70% of consumers said they were most likely to buy flights and holidays online and 65% echoed this sentiment for physical CDs, DVDs, book and video games.
Never Miss a Retail Update!For retailers operating in these sectors having an online presence is imperative: ignore your customer’s preferences at your peril. However, some sectors are going against the tide. Almost half of survey respondents said they weren’t likely to purchase luxury goods online and only 21% said they were likely to buy groceries without visiting the store. For these categories the need to physically assess the quality or authenticity of the products remains and the pressure is on these sectors to increase consumers’ confidence in their online offerings, whilst maintaining physical stores. Customer sentiment may shift quickly as confidence in buying these goods online increases. Retailers must carefully analyse the trends, dynamics and factors driving sales for these products, and use this to inform future strategy.
Those retailers already operating online and on the high street must be careful to align their internet and bricks and mortar offerings or risk cannibalising sales, or confusing the customer through contradictory information. Successful retail businesses will put an increased focus on integrating these different channels to create a compelling brand presence for consumers. Product information and brand identity must be consistent across all channels, with the aim of moving the consumer along the buying process, closer to that all important sale.
It is clear that going forward retailers must have an integrated multichannel offer available to customers, or risk missing future opportunities. But with rapid consumer adoption comes rapid change: business models are quickly evolving for many retailers and many traditional businesses are subsequently facing significant challenges adapting to this new world.
And while businesses will need to evolve to meet the changing demands of consumers, so too will regulators. Regulators must ensure that the rules promote privacy while still providing the flexibility for companies to innovate.
Our survey highlighted that privacy is one of the key considerations that seem to drive consumer purchasing decisions. It noted a growing level of consumer concern regarding privacy and security, particularly when using new services or technologies. Indeed, the virtue of ‘trust’ may soon become one of the biggest competitive advantages for retailers.
However, it is not the only driver behind purchase decisions. The survey results showed that consumers are fixated on price, with many saying that it trumps all other considerations when selecting mobile operators, television options and internet service providers.
The converged lifestyle is here to stay. Businesses will continue to see a trend towards greater integration of devices within the consumer lifestyle and this means a rapid evolution of business models for those that enable them.
View a copy of the KPMG’s 2011 Consumers and Convergence Survey at: http://www.kpmg.com/UK/en/IssuesAndInsights/ArticlesPublications/Documents/PDF/Advisory/the-converged-lifestyle.pdf
