2. 3 | From Retail to “Me-tail”: Tomorrow Starts Today
Tomorrow’s consumers will
be armed—and dangerous.
3. From Retail to “Me-tail”: Tomorrow Starts Today | 3
As power moves inexorably from seller to buyer and
retailing morphs into “Me-tailing”, retail organizations
will need much more than customer centricity and supply
chain optimization to achieve high performance.
Today’s consumers are demanding. • Consumers will be able to shop
But tomorrow’s consumers will be seamlessly across multiple channels—
armed—and dangerous. Empowered and expect to find relevant content
by technology for unprecedented on all of them
choice, they will demand products
and services that meet a constantly • “Fast fashion” will be the de facto
shifting kaleidoscope of expectations, industry standard—with dramatic
from convenience and affordability to a consequences for store inventory
customized experience and sustainable levels
sourcing. They will expect to access • Supply chains will be optimized
products and services from just about across the full product lifecycle—right
anywhere and at pretty much any through to disposal
time. And in their quest for instant
gratification they will totally transform • Consumers themselves will help form
the retail industry. the communities of talent required
to service a vast diversity of new and
• Stores as we know them will no longer constantly shifting demands
be relevant—many shoppers will never
even visit one
4. 4 | From Retail to “Me-tail”: Tomorrow Starts Today
Stores as we know them will no
longer be relevant—many shoppers
will never even visit one
Some stores will focus In the future, the sheer diversity of both People who actually bother to visit a
shoppers and shopping trips will require physical retail space will be in search
on the time-starved, a multiplicity of formats, each tailored of an enjoyable and entertaining
others on the “green” to a specific local market. The name “experience”. They may patronize book-
of the store game will be precision stores where they can meet stimulating
consumer—and some
retailing. And successful stores will be authors, for example, or toy stores that
stores will simply be those that leverage their closeness to let kids interact with their favorite
showrooms. customers to interpret demand signals— toys and games, while in-store experts,
and swiftly act on them. both real and virtual, answer parents’
questions.
Some stores will focus on the time-
starved, others on the “green” Today’s shoppers are more than
consumer. Some will simply be ready for the mobile and interactive
showrooms—like, for example, Vogue technologies that can deliver this level
magazine’s twist on pop-up retail, of experience. Consider, for example,
which allows visitors to try on items that almost three quarters of Europeans
from the racks of clothes on display, responding to a recent Accenture
receive advice from stylists and sample survey said they would use mobile
products from the perfume bar or phones in-store for product information
make-up station. The store space sells scanning; and more than half agreed
nothing—but the information that that being able to interact with an
attentive store staff can derive about online product expert while in store
customers’ preferences could prove would save them time.
invaluable to future sales prospects.
5. From Retail to “Me-tail”: Tomorrow Starts Today | 5
Consumers will shop seamlessly across multiple
channels—and expect to find relevant content
on all of them
Today’s consumers already enjoy 24/7 experiences from a variety of locations its customers to buy products from their
purchasing power, as well as almost and via a diversity of channels, camera phones. Dominos’ customers
total transparency over transactions. effectively “editing” their product can order pizzas from the TV, as well
And they are beginning to abandon choices. And if a product fails to fulfill as through cell phone apps and via
product “ownership” in favor of a their expectations—if that shirt they Facebook. Staples Canada print shop
“leasing lifestyle”, characterized by a spotted someone wearing on the street uses experts channelled in, on-demand,
footloose quest for access to fewer or online turns out not to have been to help the customer define the print
items closer to the point of need. manufactured according to the exact job, mock up samples and place orders—
environmental and ethical standards an innovation that has also helped
In the future, Internet penetration of their social networking group, for Staples expand their offering into more
will turn this multi-channel lifestyle, instance—they will search the product locations by solving a basic challenge
now mostly enjoyed by the so-called comparison websites or consult their in retailing—cost effectively providing
Millenial generation, born since 1980, networked “friends” worldwide for a each customer with the right expertise
into a global phenomenon. And this, better value proposition elsewhere. and personalized service at the moment
of course, spells huge opportunities of customer need. And one high-end
for start-ups, which we call “wildfire Leading retailers are already looking to apparel maker offers online buyers who
niches” because of the speed with capture increasingly elusive customers can’t find the exact item they are looking
which we expect them to spread- in imaginative ways. Consider the for a close match—at a significant
empowered by new technologies success of Zlio, for example, an online discount, which is also on offer to their
and serving a diversity of customer site that invites visitors to “create networked friends.
segments. your own store” by selecting products
from hundreds of Internet merchants,
Interconnected and using a single and earning money on each sale. The
mobile device, do-it-yourself retail Swedish fast fashion giant H&M allows
“grazers” will be able to configure their
6. 6 | From Retail to “Me-tail”: Tomorrow Starts Today
The lifecycle of products will
be significantly shorter, making
product innovation an even
more critical differentiator
of high performance.
7. From Retail to “Me-tail”: Tomorrow Starts Today | 7
“Fast fashion” will be the de facto industry
standard—with dramatic consequences for
store inventory levels
In the future, the lifecycle of In the future, the retail supply chain basics. It will separate and streamline
products will be significantly shorter, will be predicated on inventory arriving the design function, encouraging
making product innovation an even at the store shelf just as need arises. timely and accurate handoffs between
more critical differentiator of high Replenishment orders will be placed design and production. Production lead
performance. “Fast fashion”, in fact, and released on regular cycles—typically times should drop, thanks to the high
will be the dominant business model— weekly or more. Lead times for domestic utilization of common components. And
not just in apparel and consumer suppliers will be measured in hours or vendor partnerships should strengthen.
electronics, where it is already evident, days. And forecasting, planning and
but also in all other retail categories. replenishment systems will support Some leading retailers are already
real-time allocations and store need leveraging consumer insight to move
Fast fashion will also necessitate more inventory management techniques— in the fast fashion direction. Witness
supple supply chains—a challenge for innovations that Accenture estimates the move by Target, the US-based
many. According to Miami-based Retail will reduce in-store inventory by one general merchandise retailer, to
Systems Research, forecast does not third or more. expand its fast fashion concept from
match demand for most retailers. The apparel to gardening, home decor and
proliferation of stock keeping units The benefits of a successful fast kitchenware. In the future, they will
(SKUs) means that retailers are trying fashion business model are numerous. be able to combine this insight with
to edit a constantly increasing number Customers will see a visible difference deep analytical capabilities to identify
of choices to stay relevant for the on the store floor, inducing them to the specific attributes of each product,
consumer. And Accenture estimates make more visits and thus boosting determine its value to individual
that many are making more than 80 revenues. And a faster response to consumers and target assortments, thus
percent of their inventory investments sales data will help boost production customizing individual offerings. What’s
in store—an untenable situation with efficiency, fuelling sales and reducing more, fast-moving products will be
real estate costs steadily rising and markdowns. The model will help ensure stocked in smaller formats like vending
retail space in increasingly short supply. full in-stock assortment for the hottest machines or kiosks, which are not only
selling items and high in-stock rates on more convenient for consumers but also
more cost-effective for retailers.
8. 8 | From Retail to “Me-tail”: Tomorrow Starts Today
Supply chains will be optimized across the full
product lifecycle—right through to disposal
Future resources will be even scarcer when consumers will be able to stop by in logistics, and supply chain
than they are today, and consumers “refresh and refill” window chutes, stock specialization and segmentation will be
correspondingly more value- up on basics and use mobile devices to commonplace—though a proliferation of
conscious. Shoppers will take on more pay for them. distribution points will also necessitate
responsibility for reducing packaging shared logistics and other forms of
Resource constraints are changing collaboration. Consider the case of
and irresponsible production. But they
behaviors already—and not just Meadowhall, a large mall in the UK,
will not be prepared to bear the full cost
in Europe and the US, where the which has teamed with Clipper Logistics
of sustainability. Retailers will need to
quest for sustainable products and to manage an on-site distribution center
institute cost-effective sustainability
environmentally responsible services that holds inventory for all stores in the
strategies of their own. And a supply
has spawned a whole new sub-sector: mall. The collaboration has cut in-store
chain optimized across the full product
Organic grocery. In Brazil, for example, inventories, shrunk the mall’s carbon
lifecycle, right through to disposal, will
Pão de Açúcar, the country’s biggest footprint—and boosted sales by up to 10
be critically important to that effort.
food retailer, has responded to shoppers’ percent in some categories.
The reusable and recyclable “bags growing concerns with ”green” stores
for life” now issued by retail grocers that use 10 percent less water and 14
including Tesco and Whole Foods percent less energy.
Market, for example, will eventually
Retail will also need to become a
evolve into refillable containers. We
more collaborative industry. Individual
are already seeing the spread of rent
retailers will recognize the value of
and return, from high-end handbags
greater specialization, particularly
to children’s toys. And we envision
a time in the not too distant future
9. From Retail to “Me-tail”: Tomorrow Starts Today | 9
Consumers themselves will
help form communities of
service talent
In the future, consumer demands will be outsourcing for talent, a significant Consumer demands will
so diverse and complex that no single portion of which will be mobile, moving
organization will be able to cater to all from retailer to retailer. And the be so diverse and complex
of them. Individual retailers will need to development of “communities of talent” that no single organization
function more like agents. Consumers will involve employees working for
will be able to cater to
will look to them to “broker” products multiple companies, sometimes, thanks
and channels. And that will spur many to open sourcing, simultaneously. all of them.
retailers to join together in strategic
alliances, often with companies in Google and Procter & Gamble have
other industries, most of which also swapped employees on a temporary
want to “own” the consumer. Witness, basis so that they can learn from
for example, how the UK retail grocer each other. And Japan’s Otetsudai
Tesco has evolved into an aggregator Networks allows anyone to register
of incremental products and services for employment by filling in core
ranging from Tesco Finance (a joint skills. Employers with short-term labor
venture with Bank of Scotland), through needs can enter a task description and
Tesco Mobile (with O2) to Tesco Travel, matching registrants near the location
which is powered by LastMinute.com. who are available receive an alert
to respond.
The key demand will be for the sort of
specialized, knowledge-based talent that
can create value beyond distribution.
That talent, moreover, will come from
some unlikely sources—customers
among them. Companies will start
10. 10 | From Retail to “Me-tail”: Tomorrow Starts Today
Paths to high performance
Accenture research and experience unique value proposition and adapt
clearly show that Me-tailing, for all its their brand to changing formats and
challenges, also heralds exciting new their workforce to new skills will be able
opportunities for retail organizations to position themselves well ahead of
to achieve profitable growth and high the game. To find out how Accenture
performance. Success will require can help you prepare for the Me-tail
extraordinary collaborative skills, as well revolution, please contact:
as even clearer differentiation and much
greater flexibility. It will also require Janet L. Hoffman
retailers to demonstrate exceptional Global Managing Director,
customer centricity and total mastery Accenture Retail Group
of rapidly emerging technologies. San Francisco, California, US
Nevertheless, those that can define a janet.l.hoffman@accenture.com
Renee V. Sang
Global Director, Accenture Customer
Innovation Network; Senior Executive,
Accenture Retail and Consumer Goods
Chicago, Illinois, US
renee.v.sang@accenture.com
