“Executives who continue to attempt to navigate using demographic maps, with borders defined by age, gender, location, income will be ill-prepared for the speed, scale and direction of change.” – Trendwatching.com

History as we know, shows us what was, and has traditionally been used as a predictor for the future. Although as we see in the realms of consumer behaviour and in turn retail attractiveness, it is increasingly less reliable and at best is some form of indicator of the future.

We know that residential growth typically from the cities out, initially relied on waterways, soon to see the growth of roads, enabling the growth of communities and the commiserate birth of community shopping through to the evolution of retail environments, housing, shopping centres, malls, and so on.

Consumers were more homogenous, conformist, and predictable in their behaviour, living classic gender roles, where mass advertising ruled, roles and family stereotypes were the norm, and fitting in mattered more.

Now we are witnessing a shift from the universal to the highly individualistic consumer, fuelled by absolute transparency through omni-present information.

Or as Christopher Walken says “at its best, life is completely unpredictable”.

Did you know, for example that:

– In the UK, women now account for the majority of video game players, and there are more gamers aged over 44 than under 18.

– Twitter’s fastest growing demographic between 2013 and 2014 was the 55-64 year age bracket, growing 79 per cent.

– 500 million tweets are sent per day globally consisting of opinions, comment, critique, endorsement and the creation of content – of which 80 per cent are mobile enabled.

To consider this in the context of what was, we can already witness massive change in our understanding of consumer behaviour, including the crucial understanding of neuroscience, consumer profiling and data analysis moving us inexorably towards understanding true consumer segments based on individual motivations and in turn their behaviour.

So what does all this say for the traditional methodology of building retail distribution networks predicated on largely consumer predictable behaviour, living in concentric primary markets living within the closest community?

It says that while traditional assessments still play a part they can only contribute an increasingly less reliable indicator of the manner in which behaviour will occur.

So the first stage in planning our retail distribution is to look inwardly within our organisation. This is the most significant change required in many cases.

Ensuring that we either have access to the best in consumer behaviour understanding or employ consumer behaviour experts.

Building the best data analytics investment that we can, focusing on individual consumer data aggregation, pre and post-sales behaviour.

Changing and evolving our classical retail metrics to evolve into omni-channel KPIs such as sales generated per overall omni-channel investment.

Potentially implementing appropriate technology features such as geo fencing, NFC (near field communications), beacons, heat maps, image recognition, through to smart fitting rooms.

We know that the majority of actual shopping is done in the physical shop – so building our unique point of difference into showcases possibly constitutes less physical shop numbers with increased investment into the physical environment.

Driving the physical format into new brand expressions such as pop up, store within store, click n collect, enabling a physical presence with reduced physical space investment predicated on greater support with other channels.

Consider the supporting channels such as online, social media building omni-channel capability.

In summary, if we accept the overwhelming evidence that consumer behaviour and in turn our understanding has and is changing inexorably, then considering retail distribution modelling into the context of the future rather than the past is an important consideration.

Happy “Fit” retailing.

Brian Walker is founder and CEO of retail consulting company, Retail Doctor Group. He specialises in the development and implementation of retail and franchise strategies. He can be contacted on 02 9460 2882 or brian@retaildoctor.com.au

 

First published on Inside Retail on the 29th of April 2015