Stibo Systems - The Master Data Management Company

Retail of the Future

Master Data Management Blog by Stibo Systems logo
| 7 minute read
November 14 2022

5 key considerations to position for successful retail of the future

The future of retail looks bright – at least from the viewpoint of consumers. For retailers, some tough challenges are lining up:

  1. The sustainability challenge and how to meet the purposeful shopper
  2. Enhancing the omnichannel strategy to meet a diversified audience and the proliferation of apps and touchpoints
  3. The monetization of customer data in a world of data privacy concerns
  4. A need to develop private brands to increase earnings
  5. And exploring the use of emerging technologies

 

Retail of the future is predictable

Retail looks a lot different than it did three years ago and in three years’ time, operational models, consumer touchpoints and the overall customer experience will evolve in new ways. Since 2019, consumers have tested and adopted more digital touchpoints in their purchase behavior. After a tumultuous time of brand and retail switching in 2020 consumers have now settled into more of a regular pattern and predictability of consumption. Their adoption in new digital habits and realized benefits of convenience and time savings catapulted ecommerce sales. The growth continues, albeit at a slower pace, and it is forecasted that ecommerce sales will grow by an additional $1.9T globally in the next three years. (Insider Intelligence, Global Ecommerce Forecast 2022, Feb. 2, 2022).

Ecommerce Growth Forecast

Global Ecommerce Forecast 2022, Insider Intelligence

Retail Ecommerce Sales Wordwide

$ Trillions and % of Retail Sales

Graph of the retail ecommerce sales wordwide

The digital shift

Retailers have shown agility under pressure to address the changed habits from an ecommerce perspective and have quickly built technical capabilities to fulfil consumer needs. With all this growth, it is important to recognize that ecommerce retail sales accounts for less than 20% of total sales. Meanwhile, in-store has become more tech infused with more devices and data at the hands of employees and new technical shopping aids such as AR/VR solutions to digitally evaluate products pre-purchase. Therefore, in the future, retailers will be thinking more broadly about retail sales and ecommerce as part of an ecosystem influenced by digital interactions. Consumers have increased expectations about the purchase journey that has become more digital in the following examples: buy online–pick up in store, showroom in store and buy online or buy online and return in store and all the other various commerce combinations.

 

Purposeful shopping

Beyond the digital shift, the other noticeable trend is that consumers have been more purposeful in their shopping from a societal perspective and sustainability point of view. Consumers have re-evaluated their purchase behaviors and increasingly have recognized that they can make a difference in the world not only by their actions but also with their buying choices. With this change in shopping perspective, consumers are asking more of retailers requiring retailers in the future to evaluate their business decisions and alignment to their values.

blog_hero-Retail-of-the-future

 

5 key areas to position for a successful future in retail:

1. Setting and meeting sustainability goals

Sustainability has reached a whole new level of priority for retailers looking ahead to a post-Covid business environment. Scientists have identified that climate change has reached crisis levels. Interest and urgency about sustainability has grown from the consumer, community, regulatory, investment and supplier perspective for retailers. Retail is at the crossroads of commerce. Therefore, retailers are addressing environmental problems and participating in part of the climate change solution. Retailers’ solutions include establishing the more environmentally sustainable product offerings in the market, innovating in more efficient store operations and partnering with their supply chain partners to reduce emissions. These are some of the top opportunities for retailers.

However, developing and sourcing sustainable products can be risky for retailers and these items may be higher priced as well so there has been an ongoing question if consumers would pay the premium. Generally, the younger and more affluent the consumer, the more likely that consumers will pay more. Currently 60% of Gen Z, higher income shoppers are willing to pay more for sustainable products vs. only 49% among all demographics. (Source: Climate sustainability in retail: Who will pay?, McKinsey & Company, May 4, 2022).

This willingness to spend more has increased more than 10 percentage points overall in the last two years, reports McKinsey. Now several years into sustainability plans, most retailers have now integrated sustainable processes across their organization and established aggressive goals such as to be Carbon Net Zero by 2030. The investment community is starting to see the financial performance gap between sustainably focused companies and their peers. To ensure full understanding of ESG activities of companies there is a call for more standard adoption and transparency. (Source: The economic realities of ESG, PwC, 2021).

Looking toward retail of the future, expect more retailers to learn best practices from the leaders and establish their own sustainability strategies that best serve their customers, category and market. Better data, adoption of standards and increased collaboration are needed to work with data such as ingredient sourcing, product enrichment final goods development, efficient last mile delivery and finally to consumer post-purchase feedback.

 

 

2. Delivering customer experience personalized for omnichannel and beyond

The impact of influencers has waned in marketing. Customers are searching for information about products and services at their most important retailers and brands, and they want to be known and catered to by retailers. Retailers today are using consumption behavior and annual customer satisfaction surveys to better understand the consumer and potential customer experience gaps. As consumers gradually move away from social media and toward newer virtual and augmented realities, new challenges will arise in connecting to consumers to communicate in these communities and offer relevant and personalized offers. Furthermore, experience matters across all channels and consumers are not thinking about individual channels but the overall retail experience. A recent survey indicated this fact. 65% of consumers say that they are likely to spend more online with a brand if they have a positive offline experience. (Raydiant, State of Consumer Behavior 2022).

Retailers that are extremely focused on understanding their consumers are addressing the foundational challenge of a complete view of customer by bringing in the various touchpoints together to establish a 360-degree view. This 360-degree view ensures that the in-store associates, the digital concierges, the marketers, customer service agents and ecommerce team and digital communication platforms are using the most up to date data that have been shared by the consumer with consent. Retailers of the future will bring in new capabilities to appropriately capture more data about customer interactions, their preferences and develop more complete profiles that can be used to fuel predictive analytics. Use of advanced customer analytics and business rules will be used to improve relevant and timely communications wherever they are: in the store, online or in the various other digital realities such as the metaverse.

 

 

3. Monetizing customer data

With all the ecommerce growth over the past twenty years there have been mistakes made along the way and one key one was marketers’ overuse of customer information and occasional disregard of privacy. Major social media sites and leading digital platforms and digital ecosystems have discontinued their capability to use cookies or allow for tracking of consumers as they browse the web. This was done in response to current and expected privacy regulations that have been enacted around the world. As a result of the lack of the ability to target consumers as precisely as in the past, there is a massive transition happening in digital advertising and billions of euros and dollars up for review as brands and manufacturers re-evaluate where to best spend money going forward.

The end of cookies in marketing has opened an enormous door for retail to fill digital marketing gaps. Retail media network (RMN) is essentially a digital advertising platform that allows manufacturers to invest in reaching retail customers through various tactics such as web pages, social presence, app pages through first-party data and other analytics. Most of the larger retailers in the world have evolved their shopper marketing programs to RMNs and have built the technical capabilities to become more digitally enabled to reach and communicate to consumers more precisely.

In the future of retail over the next three years, we will see the phase of trial and testing among key players become more mature with more consistent outcomes and ROI to become key differentiators. If major retailers are not readying themselves or have launched their own media networks, you are likely missing out on opportunities to communicate with consumers to drive traffic and conversion and the promotional revenue dollars as well.

Aligning business decisions to Corporate Social Responsibility

Why are you doing this? How are you making a difference? What is your reason for being, besides making money? There is no engine or vehicle like business to make a difference. - Walter Robb, former Co-CEO, Whole Foods

 

4. Retailers invest in private brand products and services

We have moved past the high growth phase in the past few years across many retail channels that were driven by changing behaviors and more plentiful money due to various stimuli. Retailers are now facing a harder road to true growth due to a combination of factors including supply chain uncertainty, lower consumption and slowing population growth. The biggest economic factor in the last year has been inflation. Inflation is at the highest level in decades in many regions around the world with an expected rate of 7.7% in 2022. This is 5 pts higher than the average between 2010-2019. (Source: Inflation Expected to Stay High Worldwide for the Next Few Years, IFO Institute, 2022).

Astute retailers are already looking at growth beyond national branded product assortment or new products. With all the food, beverage and other consumer good cost increases, consumers naturally moderate their choices to more affordable brands. As a result, retailers are heavily investing in private brands within current categories and innovating in new categories and even into new services. According to the IFO Institute for Economic Research, global inflation will be higher than average for the next three years. As a result, private brand growth is expected as 91% of retailers expect to increase investment moderately or significantly in private brands. (Source: How Private Labels Can Own 2022, Winsight Grocery Business, 2021).

Successful retailers in the future will understand where their consumers will splurge on premium and where they will look to cut costs and proactively manage their margin based on this understanding.

 

5. Enhanced digital capabilities to enable teams and analytics

Most retailers have undergone some digital transformation in the past five years and certainly the pandemic has driven more ecommerce and supply chain capabilities. Additionally, there is more sources of invaluable data with greater variety and increased volume. It is important that your technology and processes are built to absorb and make sense of this information.

  • How has your foundational business data evolved in the last few years?
  • Is there a measurable difference in quality, completeness and is your data fit for purpose to feed your analytical tools?
  • How are you evolving your business model and automating workflows help teams make timely business decisions, and enable your data science teams to drive new insights?
  • How are you using AI to reduce the rudimentary data maintenance and organization tasks and reduce the workload of your data analysts, marketing professionals and leaders?

The next few years will be a continuance of the digitalization and adoption of AI of retail organizations. Considering the size of the organizations, the large store count and multiple digital internal and consumer facing sites, it is a challenging task because the data needs across teams is incredibly large and can be overwhelming. All retailers will be reviewing these innovative technologies, and most will adopt to use some or all of these as it makes sense to the business and resonates with their customers. In the retail of the future, many will be working toward a more unified data model and using data governance and more orchestrated data sharing to ensure that they can continue to make informed analytically driven decisions.

 

A successful retail future demands better data

Consider the combination of location, customer, product data, supplier data and other business data that are used hourly within a retail organization. There is no lack of data, but there remains an opportunity for retailers to increase the value of the data to integrate this data to deliver the resulting insights and actions. The opportunity is to harvest this data and use the insights to learn faster, test new ideas and continuously improve in execution and personalization appeal to their consumers. Being ready for the future requires a solid foundation of unified business data. This information needs to be trustworthy and transparent to provide the information to the teams to learn about their market and their customers.

The journey toward better data management can start here:


Master Data Management Blog by Stibo Systems logo

Brian Cluster is Stibo Systems’ Industry Strategy Director for the consumer packaged goods and retail industries. He has more than 25 years of experience collaborating on strategy, delivering analytics and developing business plans and digital transformation. At Stibo Systems, Brian is putting his varied industry expertise to good use, providing direction and strategy for field teams and helping to drive customer value for master data management solutions. He is a frequent contributor to The Consumer Goods Forum, and his articles have been published in Consumer Goods Technology, Multichannel Merchant, Total Retail, Footwear News, and Center for Data Innovation, among others.

Discover Blogs by Topic

  • MDM strategy
  • Customer and party data
  • Retail and distribution
  • See more
  • Data governance
  • Manufacturing
  • Supplier data
  • Data quality
  • Product data and PIM
  • AI and machine learning
  • CPG
  • Financial services
  • GDPR
  • Sustainability
  • Location data
  • PDX Syndication

Data Governance Trends 2024

1/30/24

NRF 2024 Recap: In the AI era, better data can make all the difference

1/19/24

Building Supply Chain Resilience: Strategies & Examples

12/19/23

How Master Data Management Can Enhance Your ERP Solution

12/14/23

Shedding Light on Climate Accountability and Traceability in Retail

11/29/23

What is Smart Manufacturing and Why Does it Matter?

10/11/23

Future Proof Your Retail Business with Composable Commerce

10/9/23

5 Common Reasons Why Manufacturers Fail at Digital Transformation

10/5/23

How to Digitally Transform a Restaurant Chain

9/29/23

Three Benefits of Moving to Headless Commerce and the Role of a Modern PIM

9/14/23

12 Steps to a Successful Omnichannel and Unified Commerce

7/6/23

CGF Global Summit 2023: Unlock Sustainable Growth With Collaboration and Innovation

7/5/23

Navigating the Current Challenges of Supply Chain Management

6/28/23

Responsible AI relies on data governance

5/11/23

Product Data Management during Mergers and Acquisitions

4/6/23

Master Data Management Definitions: The Complete A-Z of MDM

3/14/23

4 Ways to Reduce Ecommerce Returns

3/8/23

Asset Data Governance is Central for Asset Management

3/1/23

Digital Product Passports

2/24/23

4 Common Master Data Management Implementation Styles

2/21/23

How to Leverage Internet of Things with Master Data Management

2/14/23

Manufacturing Trends and Insights in 2023-2025

2/14/23

Sustainability in Retail Needs Governed Data

2/13/23

What is Augmented Data Management?

2/9/23

NRF 2023: Retail Turns to AI and Automation to Increase Efficiencies

1/20/23

What is the difference between CPG and FMCG?

1/18/23

8 Best Practices for Customer Master Data Management

1/16/23

5 Key Manufacturing Challenges in 2023

1/16/23

What is a Golden Customer Record in Master Data Management?

1/9/23

The Future of Master Data Management: Trends in 2023-2025

1/8/23

Innovation in Retail

1/4/23

5 CPG Industry Trends and Opportunities for 2023-2025

12/5/22

Life Cycle Assessment Scoring for Food Products

11/21/22

Retail of the Future

11/14/22

Omnichannel Strategies for Retail

11/7/22

Hyper-Personalized Customer Experiences Need Multidomain MDM

11/5/22

What is Omnichannel Retailing and What is the Role of Data Management?

10/25/22

Most Common ISO Standards in the Manufacturing Industry

10/18/22

How to Get Started with Master Data Management: 5 Steps to Consider

10/17/22

What is Supply Chain Analytics and Why It's Important

10/12/22

What is Data Quality and Why It's Important

10/12/22

A Data Monetization Strategy - Get More Value from Your Master Data

10/11/22

What Is Master Data Governance – And Why You Need It?

10/7/22

An Introductory Guide: What is Data Intelligence?

10/1/22

Revolutionizing Manufacturing: 5 Must-Have SaaS Systems for Success

9/15/22

An Introductory Guide to Supplier Compliance

9/7/22

What is Application Data Management and How Does It Differ From MDM?

8/29/22

Digital Transformation in the Manufacturing Industry

8/25/22

Master Data Management Framework: Get Set for Success

8/17/22

Discover the Value of Your Data: Master Data Management KPIs & Metrics

8/15/22

Master Data Management Roles and Responsibilities

7/17/22

Supplier Self-Service: Everything You Need to Know

6/15/22

Omnichannel vs. Multichannel: What’s the Difference?

6/14/22

Digital Transformation in the CPG Industry

6/14/22

Create a Culture of Data Transparency - Begin with a Solid Foundation

6/10/22

The 5 Biggest Retail Trends for 2023-2025

5/31/22

What is a Location Intelligence?

5/31/22

Omnichannel Customer Experience: The Ultimate Guide

5/30/22

Location Analytics – All You Need to Know

5/26/22

Omnichannel Commerce: Creating a Seamless Shopping Experience

5/24/22

Top 4 Data Management Trends in the Insurance Industry

5/11/22

What is Supply Chain Visibility and Why It's Important

5/1/22

6 Features of an Effective Master Data Management Solution

4/30/22

What is Digital Asset Management?

4/23/22

The Ultimate Guide to Data Transparency

4/21/22

How Manufacturers Can Shift to Product-as-a-Service Offerings

4/20/22

How to Check Your Enterprise Data Foundation

4/16/22

An Introductory Guide to Manufacturing Compliance

4/14/22

Multidomain MDM vs. Multiple Domain MDM

3/31/22

Making Master Data Accessible: What is Data as a Service (DaaS)?

3/29/22

How to Build a Successful Data Governance Strategy

3/23/22

What is Unified Commerce? Key Advantages & Best Practices

3/22/22

How to Choose the Right Data Quality Tool?

3/22/22

What is a Data Domain?

3/21/22

6 Best Practices for Data Governance

3/17/22

5 Advantages of a Master Data Management System

3/16/22

A Unified Customer View: What Is It and Why You Need It

3/9/22

Supply Chain Challenges in the CPG Industry

2/24/22

Data Migration to SAP S/4HANA ERP - The Fast and Safe Approach with MDM

2/17/22

The Best Data Governance Tools You Need to Know About

2/17/22

Top 5 Most Common Data Quality Issues

2/14/22

What Is Synthetic Data and Why It Needs Master Data Management

2/10/22

What is Cloud Master Data Management?

2/8/22

How to Implement Data Governance

2/7/22

Build vs. Buy Master Data Management Software

1/28/22

Why is Data Governance Important?

1/27/22

Five Reasons Your Data Governance Initiative Could Fail

1/24/22

How to Turn Your Data Silos Into Zones of Insight

1/21/22

How to Improve Supplier Experience Management

1/16/22

​​How to Improve Supplier Onboarding

1/16/22

How to Enable a Single Source of Truth with Master Data Management

1/13/22

What is a Data Quality Framework?

1/11/22

How to Measure the ROI of Master Data Management

1/11/22

What is Manufacturing-as-a-Service (MaaS)?

1/7/22

The Ultimate Guide to Building a Data Governance Framework

1/4/22

Introducing the Master Data Management Maturity Model

1/3/22

Master Data Management Tools - and Why You Need Them

12/20/21

The Dynamic Duo of Data Security and Data Governance

12/20/21

How to Choose the Right Supplier Management Solution

12/20/21

How Data Transparency Enables Sustainable Retailing

12/6/21

What is Supplier Performance Management?

12/1/21

What is Party Data? All You Need to Know About Party Data Management

11/28/21

What is Data Compliance? An Introductory Guide

11/18/21

How to Create a Marketing Center of Excellence

11/14/21

The Complete Guide: How to Get a 360° Customer View

11/7/21

What is the Difference Between Master Data and Metadata?

11/1/21

How Location Data Adds Value to Master Data Projects

10/29/21

How Marketers Should Prepare for the 2023 Holiday Shopping Season

10/26/21

What is Supplier Lifecycle Management?

10/19/21

What is a Data Mesh? A Simple Introduction

10/15/21

How to Build a Master Data Management Strategy

9/26/21

10 Signs You Need a Master Data Management Platform

9/2/21

What Vendor Data Is and Why It Matters to Manufacturers

8/31/21

3 Reasons High-Quality Supplier Data Can Benefit Any Organization

8/25/21

4 Trends in the Automotive Industry

8/11/21

What is Reference Data and Reference Data Management?

8/9/21

What Obstacles Are Impacting the Global Retail Recovery?

8/2/21

GDPR as a Catalyst for Effective Data Governance

7/25/21

All You Need to Know About Supplier Information Management

7/21/21

5 Tips for Driving a Centralized Data Management Strategy

7/3/21

Data Governance and Data Protection, a Match Made in Heaven?

6/29/21

Welcome to the Decade of Transparency

5/26/21

How to Become a Customer-Obsessed Brand

5/12/21

How to Create a Master Data Management Roadmap in Five Steps

4/27/21

What is a Data Catalog? Definition and Benefits

4/13/21

How to Improve the Retail Customer Experience with Data Management

4/8/21

How to Improve Your Data Management

3/31/21

How to Choose the Right Master Data Management Solution

3/29/21

Business Intelligence and Analytics: What's the Difference?

3/25/21

Spending too much on Big Data? Try Small Data and MDM

3/24/21

What is a Data Lake? Everything You Need to Know

3/21/21

How to Extract More Value from Your Data

3/17/21

Are you making decisions based on bad HCO/HCP information?

2/24/21

Why Master Data Cleansing is Important to CPG Brands

1/20/21

CRM 2.0 – It All Starts With Master Data Management

12/19/20

5 Trends in Telecom that Rely on Transparency of Master Data

12/15/20

10 Data Management Trends in Financial Services

11/19/20

Seasonal Marketing Campaigns: What Is It and Why Is It Important?

11/8/20

What Is a Data Fabric and Why Do You Need It?

10/29/20

Transparent Product Information in Pharmaceutical Manufacturing

10/14/20

How to Improve Back-End Systems Using Master Data Management

9/19/20

8 Benefits of Transparent Product Information for Medical Devices

9/1/20

How Retailers Can Increase Online Sales in 2023

8/23/20

Master Data Management (MDM) & Big Data

8/14/20

Key Benefits of Knowing Your Customers

8/9/20

Women in Master Data: Kelly Amavisca, Ferguson

8/5/20

Customer Data in Corporate Banking Reveal New Opportunities

7/21/20

How to Analyze Customer Data With Customer Master Data Management

7/21/20

How to Improve Your 2023 Black Friday Sales in 5 Steps

7/18/20

4 Ways Product Information Management (PIM) Improves the Customer Experience

7/18/20

How to Estimate the ROI of Your Customer Data

7/1/20

Women in Master Data: Rebecca Chamberlain, M&S

6/24/20

How to Personalise Insurance Solutions with MDM

6/17/20

How to Democratize Your Data

6/3/20

How to Get Buy-In for a Master Data Management Solution

5/25/20

How CPG Brands Manage the Impact of Covid-19 in a Post-Pandemic World

5/18/20

5 Steps to Improve Your Data Syndication

5/7/20

Women in Master Data: Gwen Moilanen-Kollar

3/31/20

Marketing Data Quality: Why Is It Important and How to Get Started

3/26/20

Panic Buying: Navigating Long-term Implications and Uncertainty

3/24/20

Women in Master Data: Ditte Brix, IMPACT

2/20/20

Get More Value From Your CRM With Customer Master Data Management

2/17/20

Women in Master Data: Nagashree Devadas, Stibo Systems

2/4/20

How to Create Direct-to-Consumer (D2C) Success for CPG Brands

1/3/20

Women in Master Data: Anna Schéle, Ahlsell

10/25/19

Women in Master Data: Morgan Lawrence, Infoverity

9/26/19

Women in Master Data: Sara Friberg, Acando (Part of CGI)

9/13/19

Improving Product Setup Processes Enhances Superior Experiences

8/21/19

How to Improve Your Product's Time to Market With PDX Syndication

7/18/19

8 Tips For Pricing Automation In The Aftermarket

6/1/19

How to Drive Innovation With Master Data Management

3/15/19

Discover PDX Syndication to Launch New Products with Speed

2/27/19

How to Benefit from Product Data Management

2/20/19

What is a Product Backlog and How to Avoid It

2/13/19

How to Get Rid of Customer Duplicates

2/7/19

4 Types of IT Systems That Should Be Sunsetted

1/3/19

How to Use Customer Data Modeling

11/15/18

How to Reduce Time-to-Market with Master Data Management

10/28/18

How to Start Taking Advantage of Your Data

9/12/18

6 Signs You Have a Potential GDPR Problem

8/16/18

GDPR: The DOs and DON’Ts of Personal Data

6/13/18

How Master Data Management Supports Data Security

6/7/18

Frequently Asked Questions (FAQ) About the GDPR

5/30/18

Understanding the Role of a Chief Data Officer

4/26/18

3 Steps: How to Plan, Execute and Evaluate Any IoT Initiative

2/20/18

How to Benefit From Customer-Centric Data Management

9/7/17

3 Ways to Faster Innovation with Multidomain Master Data Management

6/7/17

Product Information Management Trends to Consider

5/25/17

4 Major GDPR Challenges and How to Solve Them

5/12/17

How to Prepare for GDPR in Five Steps

2/21/17

How Data Can Help Fight Counterfeit Pharmaceuticals

1/24/17

Create the Best Customer Experience with a Customer Data Platform

1/11/17
Did you like this blog post?

Sign up to get the latest blog content in your inbox.