Post-COVID Retail and the Pulse of ManufacturersBy Juan Carlos Molina | Thu, 06/30/2022 - 11:00
The future is an uncertain and changing destination for all of us, including both people and organizations. In this sense, retailers and marketplaces in Mexico cannot remain static and must make quick decisions based on reliable information in order to lead businesses to a safe harbor. Thus, it is important to know which trends are revolutionizing the consumer industry, as well as worldwide consumer habits.
Nobody thought that the COVID-19 health crisis would define retail business models. However, since it is an endemic disease, both companies and consumers will have to learn to live with it. Safety, well-being, convenience, authenticity, novelty, and creativity are attributes that customers will demand proactively in their shopping experience, either at a physical point of sale or in cyberspace.
Innovative retailers have placed technology as a cornerstone in the design of new and satisfactory shopping experiences, as well as to increase consumer brand loyalty, despite emerging contingencies.
Step by step, exponential technologies, such as artificial intelligence (AI), Internet of Things (IoT), robotics, analytics, big data, and immersive experiences – virtual reality and augmented reality – are becoming the foundations of stores. In addition, e-commerce, social media, and mobile applications continue to digitalize the way consumers shop and interact.
According to the consulting firm Deloitte, one of the most notable changes that consumers have undergone is the shift from almost compulsive or emotional consumerism to one that is much more rational and informed, bringing truth to the saying “less is more,” as we no longer define ourselves by the number of things we have but by the quality of our possessions, the status they bring, and the experiences we gain from acquiring them.
Beyond customization or price-based exclusivity, consumers have started to value craftsmanship (handmade) and “tailor-made” items more than those that are mass-produced, as well as other attributes, such as diversity, fair trade, and eco-friendly brands.
It should be noted that retail trends are investing in strengthening e-commerce, omnichannel sales, and intensive internet use to avoid the influx of people in physical stores. They are also seeking to provide customers with several options to pick up their purchases, such as in-store pickup, drive-through, click and collect, and the innovative smart store kiosk, a kind of artificially intelligent machine with a variety of products where customers create an account linked to their bank details, receive a password and pay for the item they choose through an app, without human intervention.
Also, in its various formats, retail has an ally that has allowed, through innovation, it to renew and enrich the range of products displayed: manufacturers.
In this context, GS1 Mexico, together with Psyma Latina, conducted the 4th Edition of the GS1 Barometer: SME Manufacturers in the Consumer Industry, which states that small and medium manufacturing enterprises attributed their success in 2021 to their commitment to good customer services, as well as to the high quality of their products, which generated specialized merchandise strategies in categories where competition is not so fierce, allowing them to stand out. Meanwhile, companies with a greater number of employees have chosen an approach focused on permanence, where the brand retains its essence and purpose while adopting new success factors into the equation, such as online sales and digital campaigns.
Also, the GS1 Barometer emphasizes that six out of 10 manufacturing companies mentioned that their financial situation is excellent, with some growth, or good, with areas of opportunity. Ten percent of these companies reported that their business is still operating but with almost no profit, while 22 percent noted that their situation is delicate and, if they do not work hard, they might be facing problems. On the other hand, 5 percent mentioned that their financial situation is bad but they are taking actions to recover, and 2 percent are living through critical times, without a plan of action.
Concerning sales dynamics, 35 percent of the manufacturers surveyed mentioned that in 2021 they grew a lot or slightly, 18 percent added that they maintained the same levels as 2020, while 31 percent reported that sales declined this year. In terms of customer growth, 43 percent of the companies declared the number of their customers increased, 31 percent reported the number remained stable, and 26 percent reported a decrease.
The sales-customer relationship is essential for the development and sustainable growth of retail supply companies. Therefore, elements such as product quality and customization, the omnichannel environment, focus on customers, and premium services, in addition to providing relevant shopping experiences, will make the difference when it comes to winning over consumers and expanding their market.
Undoubtedly, the words of the American actor, director, and writer Woody Allen regarding the future are highly relevant: “I am interested in the future because it is the place where I will spend the rest of my life.” It will be key for retail, marketplaces, and manufacturers to achieve a convergence between the physical point of sale and cyberspace to build a future that adapts to new consumers and to any disruption that may arise.