New business models will come to life
Jan Lorbach, Senior Director Strategic Insights, GfK, on long-term success strategies and what business models will flourish.
What are the main challenges for retailers who are looking to implement a coherent long-term strategy and objectives?
The challenges we have been facing over the past few years, with the Global Pandemic, the war in Ukraine and consumer confidence drops, have shown us that certainty is by no means guaranteed. The landscape can change quickly depending on the political circumstances. For example, tensions between China and the United States may require portfolios to shift or adjust as certain brands may become unavailable in your market.
How do you think consumer demands and expectations will change in the short-medium term?
I think we are going to see offline and online channels become increasingly blurred, with consumers’ shopping choices being driven by convenience. At the same time, the online segment is expected to continue to grow, with growth forecasted to be stable.
What does the purchase journey of 2030 and beyond look like, and how important is sustainability in this respect?
The online and offline categories will disappear more and more, while consumers will expect retailers to provide all the information for decision support in an omnipresent ecosystem or platform. They will also make purchases within the context of convenience and their personal circumstances, whether this means they choose to go to a physical or online shop, or buy online and pick up in store. The online offer will also become increasingly diversified, with, for example, social selling, marketplaces and the metaverse.
BUSINESSES WHICH TRULY CONVINCE CONSUMERS ARE SELLING FOR A PURPOSE RATHER THAN FOR BUSINESS ONLY. THEY WILL GET THE CROWDS OF TOMORROW.
Sustainability will become one of the major aspects of purpose, along with diversity and social responsibility. In 2030, Gen Z will have become the new powerhouse. They will be fully engaged in their careers and have the most disposable income. These generations are fully aware of the environmental challenges which we are facing and are equally concerned about them. Sustainability therefore will become one of the main drivers in the planning process.
What business models do you think are best suited to these changes going-forward and why?
Successful business models will show flexibility as evolving challenges may require swift changes. Building a strong retailer brand increasingly becomes a success factor to stay relevant in a new retail world. Many manufacturers are pushing their own online stores and, eventually, Direct-to-Consumer (DTC) sales will grow. Tomorrow’s business models will be more purpose driven than ever, whether this is sustainability, diversity or another cause. Those who can attach to platforms where consumer traffic concentrates, e.g. marketplaces, will gain an edge over competition. Since most of those are generalists, it provides new opportunities to sell a broad range of products. Such complimentary assortment sales can easily be fulfilled using marketplaces’ infrastructure. Lastly, successful business models need to offer a seamless digital and analogue shopping journey, which is both smooth and quick, with information easily accessible.