Retail

Retail Innovation.

Stores today must be oriented to a greater objective, not only to be distribution channels. We’re seeing a big change mainly driven by D2C brands transforming the sector foundations. Find here trends and challenges that Retail is facing, so you can also stay in the game.

Our partners trust in us

Retail

Retail Innovation.

Stores today must be oriented to a greater objective, not only to be distribution channels. We’re seeing a big change mainly driven by D2C brands transforming the sector foundations. Find here trends and challenges that Retail is facing, so you can also stay in the game.

They trust us

Context

Improving experiences throughout diverse worlds

Brick and Mortar has been the core distribution point for retail companies for decades. But in the last few years, their approach towards customers has changed.

 

Brands no longer rely on a third party to communicate who they are. Instead, they strive to be in direct contact with its client’s desires, needs, and aspirations.

During the 20th century, the focus was mainly on product development and advertisement.

 

With the internet era and the integration of new technologies, users not only got the chance to learn about all products available in the market, but also access to reviews to help compare between brands.

 

Customers’ mentalities transitioned towards needing, and expecting, brands to comprehend them.

 

Now, brands need to implement strategies focused on personalization and new experiences during service delivery. They must become “customer-centric” to thrive.

 

The landscape has changed

Since 2020, Direct to Consumer (D2C) companies have multiplied, while big legacy brands have begun developing their own D2C areas.

 

Companies nowadays aim to understand their customers, personalize their services, and deliver memorable experiences to garner loyalty. At the same time, another variable has entered the equation: the Phygital space–a way to complement physical and digital experiences.

 

This is getting interesting, right? We are about to reveal challenges and opportunities in the sector, so keep reading!

73% of the population is purchase-channel agnostic

55% prefer buying directly from the manufacturer

By 2025, sellers will devote 60% of their retail space to experiences

the outlook

Territory trends

4 categories to adapt

In this regard, there are 4 categories retailers must consider to adapt: delivery and city constraints, malls and physical stores, technology and data, and, finally, channel options and online sales.

Consumers no longer prefer traditional physical stores over the myriad of new sales channel alternatives. Retailers are going through growth and transformation processes to keep up.

 

A new perspective

The dynamic between physical and digital venues has blurred the established rules, from how brands approach clients through D2C, to the new experiences that mix up both in the Phygital space.

Frontiers are being pushed towards new uses of the premises that were once the great centers of purchase.

Phygital

Product customization

Clients want to be part of the trends, while feeling they are special within that space.

Virtual reality

Providing the option to test a product at-home through VR. 

Cocooning
No longer making the customer feel “at home” at the store. The store and home are different experiences.

Consumers

Human interaction

Amiableness and personalised recommendations encourage decision making.

Convenience
From easy payment gateways to customized delivery options.
Shopping discovery

Exploring for new products is more attractive when you are in the physical place.

Retailers

Technologies

Various technologies can be applied to implement better traceability and transparency.

First party data

Data coming from own sources is better than buying it from a third party.

Logistics

Reduce delivery cost and provide a personalized (delivery) service.

the outlook

Top challenges in Retail

Immediate fulfillment and omnichannels

The rise of ultra-convenience represents a major challenge. Companies are now pressured to deliver their products quickly.

Nevertheless, we see no significant changes in logistics cost-responsibility.

In order to be competitive, companies need to excel at developing close connections with clients.

Insightful data from customers

Data is the main actor in many industries, but in retail it holds most of the power.

Companies that are not D2C struggle to get data from their clients and are unable to track interactions with their brands, since they don’t have access to the final, direct interactions. Recovering data to personalize interaction is the first step to build a bond between brand and client.

Brand’s philosophy

Consumers nowadays care more about the vision of the company and its brand objectives. They want to see companies with defined philosophies, especially when it comes to sustainability or social impact.

Companies that disregard this will miss out on the opportunity to target particular market niches. Greenwashing is a trend to avoid, as it will be socially penalized more often than not.

the outlook

Top opportunities in Retail

D2C is here to stay

D2C boomed during the pandemic, which pushed the retail industry to change and focus on new horizons. It caught many companies unprepared, but those who developed proper logistics successfully expanded their digital channels.

Digital selling channels are here to stay.

In parallel, Brick and Mortar is undergoing a transformation. Physical sales spaces cannot yet be dispensed with, brands and retailers know this very well.

The innovation imperative

Retailers also know that it is necessary to offer alternative types of shopping experiences to consumers, because competition from e-commerce is getting stronger.

This opens up a wide range of possibilities in the sector.

After testing and evaluating initiatives in this area, we identified a series of opportunities.

Product information availability

Brands ought to provide detailed information about their products because of data collection and traceability demand. Tech apps can be turned into competitive advantages by supporting transparency in the supply chain. 
Companies need to improve their communication channels as well as the messages they share on them so they can deliver the right information at the right time. This will assure they connect with their clients in a personalized way.

Purchasing efficiency

Purchasing convenience can be the turning point for some customers that want a complete, omnichannel experience. Clients can choose when and where to receive their orders, opt-in to brand experiences, or purchase products on the spot.
Clients’ needs are no longer solely focused on the product itself but on the buying experience, making it almost mandatory for the brand to be able to transmit its message in every channel.

Human value

Customers still go shopping because they appreciate shop assistants’ help during the process. Human interaction is a decisive area of improvement in regard to e-commerce because the customer journey has gradually become much more independent.
Companies are starting to implement guided experiences and direct communications with shop assistants on online portals.

 

Want us to help you build the next big thing in retail?

Our network of experts

A trip like this requires the best companions. That’s why we rely on a group of mentors and experts with high seniority and experience in startups, corporate innovation and specific industries.

Our featured cases

In collaboration with Carrefour, we created a digital, easy way to understand what you’re eating.
We understood the fragmented horeca consumer, identified business opportunities, and validated them.
We professionalized a new venture’s client touchpoints and developed strategies to make it operationally sustainable and equipped to scale.

Learn about other territories

We are ready to build with you

We co-found new businesses and impact-driven innovation initiatives by partnering with the world’s leading corporations and most brilliant entrepreneurs, taking joint risks and participating in the success of every project we are part of.