Retail’s “e-pocalypse” will bankrupt U.S. online-only brands that lack a physical strategy. 76% of total US retail sales will still occur offline…retailers will need to choose one of three options: open physical stores…develop shop-in-shop locations…or partnerships - or close their (virtual) doors.
Retailers will choose one of two supply chain paths: own it or outsource it. Firms such as American Eagle Outfitters and Gap Inc. offer supply chain as a service, orchestrating execution of contract manufacturing, transportation, storage with other brands…some retailers will opt to outsource outright…moving resources, talent, and capital into customer-facing functions.
Automation will be the savior for continued retail labor shortages. Retailers and brands will invest more heavily, and more strategically, in automation in 2023. Investments will automate functions…both in corporate areas…and in the store (NOTE: see the item in Accelerating about Shake Shack adding self-service kiosks to all locations).
Paid membership programs will boom - but most will fizzle fast. Taking a page from programs such as Amazon Prime, Costco and Walmart+…retailers will channel marketing dollars into …paid membership programs. But unless a retailer can clearly articulate to customers why they should sign up…ROI on that spend will tank.
Retail media strategies will yield far more conversation for most than actual revenue. The impact of retail media dollars will be notable for a few retailers… negligible for most others. Retailers should compete for retail media dollars with advertising in their stores that will reach far more customers than their digital properties.
Overall (CSA noted) Amazon was the most trusted brand by all generations in a study by Clarify Capital, which surveyed over 1,000 Americans. Amazon was the most trusted retailer (56% of respondents), followed by Walmart (44%) and Target (36%). Among restaurants, the largest percentage of respondents rated Pizza Hut as trustworthy (40%), followed by KFC (39%) and McDonald’s (37%).
The survey also measured respondent views about brand trustworthiness. 78% of respondents said it is “very important” that a brand is trustworthy, and another 15% said it is moderately important. Only 7% said it is just a little important for a brand to be trustworthy. Nearly everyone surveyed (90%) said that trust makes them more likely to purchase from a business. 49% of respondents said they’d be more likely to recommend a trusted brand to friends, and 43% would leave positive reviews online.
To determine which U.S. industries are the most trustworthy, Clarify Capital consulted the Better Business Bureau (BBB) and then surveyed over 1,000 Americans about their opinions.
The CSA story goes on to note another survey by advisory firm Simon-Kucher & Partners which indicates that sustainability is also an important factor…65% of respondents consider sustainability when making purchases, a 14% increase from a year ago. The shift in consumer behavior coincides with a shift in sentiment toward sustainability during the past year, as 73% of US consumers view environmental sustainability to be ‘as important’ or ‘more important’ to them than a year ago…Overall, 61% of U.S. consumers rank sustainability as a top five value driver in at least one category.
Chris Cardoni, Editor