The last 40 years in the retail industry has seen incredible change. It is fair to say that the consumer experience compared to the 1980s is largely unrecognizable for shoppers.
For retailers, more so than most industries, it is vital that they stay ahead of the curve. In order to look ahead at upcoming trends, however, it can be useful to note the evolutionary changes that have taken place thus far. Let’s now look at the trends that have impacted the retail sector the most.
In the 1980s, retailers in Western countries faced stiff competition from Japan’s low-cost, high-quality manufacturing. Quality control became a big focus as a way of regaining competitive advantage. Companies began to define quality according to customers’ requirements. Additionally, management was being held responsible for improving product quality. These popular business approaches took hold in the 1980s and were implemented widely from retail to the US Defence Department.
With the quality of products no longer being called into question, the 1990s saw a focus on price. Sam Walton’s vision of keeping prices low by focusing on volume, was the driving force behind the growth of Wal-Mart becoming the world’s largest company by revenue. Lean, and Just-in-Time Manufacturing saw big savings in the production of goods which also helped retailers keep prices low.
The Internet revolution that began in the 1990s is something that we all take for granted, however, it has changed every aspect of our lives. The internet offered retailers an exciting and new channel to reach new customers. Not only did it democratize retail, lowering the barriers to sell anything to anyone, but it also opened up global barriers reaching customers across borders.
With quality, price and access now all taken care of, what are the ways that retailers can gain an advantage, win market share and drive sales?
At Aspectiva we believe that the next land grab for customers will be in User Generated Content (UGC). Already we see that the social media vanity metrics of recent years are proving ineffective. Likes or retweets are no longer a useful way of tracking the likelihood of gaining customers. Plus, with so much content being created and distributed by brands themselves, shoppers are disengaging with information disseminated by retailers.
Although not necessarily a new concept, according to Business Insider, shoppers who interact with UGC and online opinions are 97% more likely to convert with a retailer than customers who do not (
Aspectiva analyzes massive volumes of consumer opinions, turning them into comprehensive and valuable insights. Based on Artificial Intelligence and Natural Language Processing technologies, we leverage User Generated Content to help online shoppers search for the products they want and provide the recommendations to enable them to make informed purchasing decisions. Supporting eCommerce sites across any type of product or service, Aspectiva significantly increases shopper engagement and conversion rates.
Contact us to find out more.