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NEW YORK -- The retail industry will become more segmented and customer-driven by the year 2015, predicts PricewaterhouseCoopers' Retail & Consumer Industry Practice and TNS Retail Forward in a new report released yesterday.
"Retailing 2015: New Frontiers" identifies 15 growth drivers and predicts 15 trends that will redefine the retail environment in 2015. Among shifting demographics, household downsizing, and new marketing channels, the retail industry will face a variety of new challenges as the industry progresses during the next decade, the report suggested.
"Overall, the retail industry will need to adopt a more targeted approach in order to reach its customers," said John Maxwell, retail & consumer industry leader for PricewaterhouseCoopers, in a statement. "The 'one-size-fits-all' approach of the 1980s is not going to work as the population becomes more diverse and tech savvy during the next decade."
According to "Retailing 2015," the most rapidly growing age segment in the United States will be that consisting of those older than 55. Members of generation Y and millennials (those under the age of 35) will be more culturally diverse and technologically inclined, while less enamored of large conglomerates and chain stores than their baby boomer parents. In addition, the population will become increasingly diverse, with nearly half of the population under the age of 25 identifying themselves as non-white in 2015.
In 2015, retailers and suppliers will be held to higher standards around the world, the report's authors predict. Concern about the planet and its people will be an integral part of mainstream consumer demand. Rising levels of government involvement, omnipresence of news media, increasing watchdog groups, and advancements in technology will all have an effect on how retailers operate in 2015.
As a result of these anticipated economic drivers, the PricewaterhouseCoopers report also predicts 15 trends that will redefine the business environment in 2015. Examples include:
-- Downsizing: The current trend of sustainability will drive the downsizing of products, packaging, resource consumption, and waste, as more people look to smaller, more personalized products.
-- Share of Life Retailing: Retailers will no longer define themselves by the products they sell, but by the customers they serve. Retailers will position themselves as one-stop purveyors of lifestyles.
-- Multi-Channeling: Traditional storefronts will increasingly co-exist with a growing array of multi-channel platforms, which include catalogs, pop-up stores, virtual stores, and retailers partnering with service offers, such as spa packages and hotel deals.
-- Supplier Competition: Supplier-retailer relationships will not only be increasingly collaborative but also increasingly competitive. More suppliers will work vertically with retailers to create unique brand and product offerings.
-- Triple Bottom Line Scorecard: Definitions of corporate success will change by 2015, with increased focus on the environmental and social performance of a company.