Navigating The Future For Retailers: Staying Relevant Through Web 3.0, Emerging Digital Marketing Trends And The Climate Crisis
By Geoffrey Parsons, Director, Experience Consulting at EPAM Systems, Inc.
Looking into 2022 and beyond: Thoughts on Navigating the Diverging Futures of Blended Retail
In the past two years, few industries have undergone as much disruption as retail. The onset of a global pandemic has led to the rapid adoption of hybrid shopping behaviors, and retailers must prepare for even more challenges on the horizon. Namely, they must safeguard themselves from the inevitable transition from Web 2.0 to Web 3.0. Moreover, the way consumers and retailers interact is about to change as data is decentralized and made more transparent. To be relevant in the future, they must discover their role in connecting with consumers in this new era, adapting their strategies, organizations and ways of working as a result.
The Web 3.0 Transition
Retailers have to start thinking about navigating the Web 3.0 paradigm shift. Built upon the core concepts of decentralization, openness and user utility, Web 3.0 will radically challenge the existing features of retail and the walled gardens of leading tech giants characteristic of Web 2.0. Experts posit that there are three potential futures of Web 3.0. The first prioritizes returning to the roots of data privacy with data vaults and emphasizing the trade of data for value. Another underscores accessibility, helping people engage with the internet more ubiquitously in a Blend Space – through advances in computation and the proliferation of connected devices. Finally, there is the future where the internet is decentralized (again). Through blockchain, this future imagines a fully interoperable digital world, where anyone and everyone is enabled to engage actively in and shape the underlying infrastructure, experience, and value capture of the internet. In theory, this is a redistribution of the network effects currently enjoyed by the large tech platforms back to the collective users of the internet.
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Winners in the Future of Customer Data Vaults
In the consumer packaged goods (CPG) space, the past five years have been characterized by an accelerated attempt to form deep, personal relationships with customers, often by stepping into direct selling. These organizations have been challenging themselves to consolidate their data platforms, experimenting with direct-to-consumer experiences that help them reduce their reliance on third-party data and build a proprietary and longitudinal understanding of their bond with consumers.
Jessica Spence, CMO of Beam-Suntory’s portfolio of brands, has described how her marketing organization has changed to operate in this new data-driven world, where her critical key team members are her head of Research & Analytics, her HR partner, and her CFO. This combination of insight (big and small), cross-departmental collaboration, and accountability to business impact presages the increased collaboration and customer synchronicity that will mark the winners of a world where customers own, control, and monetize their own data. The brands that have put in the effort to build an internal competency around authentic value exchange of data and have the infrastructure to act upon it will be a step ahead of the pack.
Winners in the Future of Blend Space
A key takeaway for retailers is that the veil between virtual and physical interactions grows thinner each day. One example is Blend Space, where the physical and virtual worlds converge into one unified retail experience. Many retailers have spent the past five years creating digital experiences for their customers, and their focus now has turned to trying to stitch those experiences seamlessly together. For traditional retailers, delivering on this ideal requires a 90-degree pivot of their organizational model, where siloes of retail, customer service and digital become embedded collaborative teams oriented around customer challenges and enabled with decision-making power. Perhaps the straightest line to achieving this Blend Space readiness is top-down. At Walmart for example, the CMO reports to the Chief Experience Officer, who oversees customer experience across all touchpoints and channels.
Winners in a Future of Decentralization
What would retail look like in a fully decentralized future? Interoperability will be primary, and Nike is pointing the way, announcing an open ecosystem around their membership program, so a loyal shopper could benefit no matter where they purchase a Nike product. The possibilities in this space for identity management and product authenticity enabled by blockchain technology are significant. Or consider Fast, a start-up replicating Amazon’s “one-click” shopping paradigm but extracting it from the platform. Fast’s vision is to facilitate near-instant shopping in any context. Hypothetically, someone walking on the street could scan the QR code on a billboard and immediately have that item shipped to their home. While Fast’s gambit is yet another platform and data play, it is quietly illustrating the potential of a connected world where interoperability facilitates hyper convenient experiences.
Those best prepared to win in the decentralized future of retail are those that are already proactively exploring the possibilities of emerging technologies through the lens of customer need. These organizations create sheltered spaces, either with partners or internally, where tech, business and design professionals collaborate around the enduring needs of shoppers, customers and consumers, and bring to life regular experiments to explore and prepare for those futures.
Regardless of the outcome, retailers need to begin examining the fundamental aspects of their business in the context of transitioning to a new paradigm of connection and evaluating if these characteristics will endure through this new future.