I attended a leadership summit several weeks ago, and the speaker mentioned “new retail” several times and warned that a disruption in the industry was imminent. The retail business has constantly evolved for thousands of years, reflecting changes in customer needs, retail offerings, distribution and technology.

However, are we setting the beginning of a truly disruptive set of changes that will measurably impact the retail business? If so, what are the drivers of change, and what are the implications for all of us?

I invite all of you to join in this discussion with your own insights, experiences and opinions, as we define critical actions retail leaders must take to remain successful. To really understand theses impending changes, let’s separate “retail” into its basic components, each of which must be integrated even more closely for retailers to continue to grow profitably. I’ll delve into each of these components as a part of this series.

Basic Components of Retail

  • Customer engagement and communication
  • Buying, assortment planning, inventory management and replenishment
  • Distribution, warehousing and delivery
  • Moment of truth—online and in-store
  • Data analytics, business intelligence and predictive decision support

Customer Engagement and Communication
How does a retailer possibly serve the demands today of perhaps the most diverse generational expectations in our history?

  • As a Boomer, I’ve got the means to buy more, but my customer service expectations remain conventionally high:
    • I’ve got money, but I also have lots of stuff…so my spending choices are selective
    • My health insurance premiums are astronomical as I’m self-employed now, but many of my older Boomer friends are now participating in Medicare to offset the spend
    • I still require “old” customer service; when I need help online or in-store, I expect knowledgeable, attentive service, fast answers and support
    • I’m quickly moving online, making more and more purchases because even with more discretionary time, I want convenience
    • I still primarily pay with a credit card and even some cash, depending on the selling platform and purchase amount
    • I try to guard my personal information, and I don’t trust most social media platforms
  • My “X-er” friends have slightly different needs and expectations:
    • Generation X represents the largest spending generation relative to others, as most are still growing their careers and planning for retirement, while some still have children in college, meaning more modest disposable income
    • My house is nearly paid off, but most of my friends still have a sizable debt, albeit tempered by historically low mortgage rates over the past 10 years.
    • They don’t understand or trust social media any more than I do, but like me, they are buying more and more online for the convenience
  • I don’t really relate to my children, the Millennials:
    • Their schedules are overcrowded, trying to balance full-time jobs with raising families and/or commitments to community projects
    • My children own their homes and have significant mortgages, but many of their peers choose to rent
    • They are saving for kids, college, a new car and even some for retirement, although that is not the norm for most
    • They seek convenience in almost everything…online shopping for everything from toilet tissue to shoes, ordering mealkits to simplify the evening meals, mobile grocery ordering and pickup to eliminate parking and walking into a store
    • They are explorers, always seeking new experiences, often beginning with online searches—food, entertainment, vacations, electronics and new technologies
    • They freely give away their personal information, expecting that the receiver provides incremental value through curated shopping and personalized entertainment experiences
  • The newest emerging generation—Gen Z or the iGeneration—is even more perplexing to me:
    • They’re digital natives, as the Internet has been a part of their lives since birth
    • Their spending patterns are higher than were those of Millennials at the same age in life
    • They want personalized, interactive purchasing experiences, and they expect them to be seamless on the latest tech platforms
    • They demand speed, many stating that search results must be curated and immediate

So, given the differences in generations with whom we’re all trying to connect and engage, what are you doing to better understand the specific demands, preferences, learning, talking expectations across your customer base?

Next time, we’ll start discussing how the characteristics impact current retail offerings and how retailers must address wide diversity.