Inside the Retail Reckoning: What Makes Retail Unique & Why it Requires an Expert Approach
Retail is unique. Perhaps more so than any other industry, retail is ubiquitous, complex and ripe for disruption.
These characteristics create a differentiated set of challenges for retailers, but they also create enormous opportunities.
In fact, retailers now have more opportunities than ever to engage consumers and grow their customer base. However, there’s little room for error in doing so thanks to fierce competition within the industry and ever-heightening consumer expectations.
As a result, taking advantage of these opportunities to grow the business and become a true market leader requires a high level of expertise and a deep focus on everything that makes retail so unique.
What Makes Retail So Unique?
Five factors, in particular, make retail a highly unique industry:
- Highly competitive, with no path for winner-take-all: Retail most certainly has market leaders, but the diversity of retailers and consumer preferences protect against it becoming a winner-take-all industry. This makes it highly competitive and forces leaders to continuously fight to maintain their positions in the market.
- Leader in innovation: Retail has always been at the forefront of innovation, which continues to drive competition. As retailers aim to meet and exceed evolving consumer expectations, this innovation can extend to anything from experiences and purchase processes to supply chains and business models to omnichannel engagement.
- Disproportionate impact of marketing and advertising: Retail purchases are highly emotional, especially compared to purchases like choosing an airline or a bank. Often, consumers choose products or brands due to an emotional connection, and this means marketing and advertising carry a disproportionate impact on success in retail. It also means that these areas of the business must be profit centers, not cost centers.
- Differentiated sub-verticals: Retail consists of several highly differentiated sub-verticals. Although all retailers do have similar needs and processes that are unique to the industry as a whole, important nuances separate apparel retailers from home goods retailers, luxury retailers from non-luxury retailers and so on. Understanding these nuances necessitates deep, industry-specific expertise when developing strategies to engage consumers and grow loyalty.
- Bellwether of economic health: Retail is often used as an early indicator of economic health, since sales reports are a strong sign of consumer spending power and the retail industry is the largest private-sector employer in the US economy. However, accurately measuring retail success and using that data to understand economic health requires a long term view due to the seasonal nature of retail.
Why Does Retail Require Deep Expertise?
All of the factors that make retail so unique also mean that it requires deep expertise to get right. From creating meaningful connections with consumers in different ways across retail sub-verticals to introducing highly innovative, omnichannel experiences, succeeding in retail isn’t easy.
Specifically, succeeding in retail requires significant knowledge around:
- Movement within the broader retail industry, as trends like the rise of ecommerce, mobile and direct-to-consumer strategies continue to shift expectations
- Key goals to drive growth, such as the value of retention vs. acquisition, and how to use data to achieve those goals
- Common patterns in customer behavior that require specific marketing programs to fill gaps and keep shoppers engaged
- Differences between and unique goals for specific sub-verticals, including shopper behavior, product changes and overall engagement patterns
Prepare Your Retail Marketing Team for a Retail Reckoning
Ready for even more on what makes retail unique and why retail requires such deep expertise to get right? Click here to get the full details, plus an analysis on key inflection points in modern retail and how to approach the next wave of retail.
