The internet has completely transformed how consumers shop and purchase goods. What was once dominated by brick-and-mortar stores is now a diverse landscape including both online and physical retailing. E-commerce has seen explosive growth over the past two decades, rising from virtually nothing in the late 90s to over $3 trillion in global sales in 2019. Major retailers like Amazon, Walmart, Target and others have invested heavily in growing their online presence to meet changing consumer product demands. Customers now expect to be able to research products, read reviews, and complete purchases with just a few clicks on their phone or computer. This has put pressure on traditional retailers to adapt and integrate digital capabilities or risk losing  share.

Growth of Mobile Shopping

Closely tied to the rise of e-commerce has been the enormous increase in mobile shopping. As smartphones became ubiquitous, consumers began using mobile devices to not only research products but complete purchases on the go. This has led to retailers investing in optimized mobile sites and apps to provide seamless shopping experiences. According to statistics, over 50% of all online shopping in done on a mobile device. Younger generations in particular almost always shop with their phone in hand. Manufacturers have responded with more mobile-friendly packaging and products geared toward on-the-go lifestyles. The growth of mobile is reshaping both what products are developed as well as how and where they are purchased.

Direct-to- Consumer Product Brands

A notable trend in recent years has been the success of direct-to Consumer Product And Retail brands which and sell products exclusively online. By selling directly and cutting out traditional retail middlemen, these brands are able to price products more competitively while keeping higher profit margins. Popular examples include athletic clothing companies like Outdoor Voices and Athleta, as well as digitally-native brands like Casper mattresses and Dollar Shave Club. Consumers have responded positively to the seamless shopping experiences, competitive pricing, and innovative products coming from these new brands. Traditional retailers will need to find ways to emulate the agility and customer focus of DTC brands or risk continued loss of share. Proper branding, social ing, and data analytics will be key to long term success.

Changing Shopping Behaviors

How and why customers shop continues to evolve at a rapid pace. Younger generations in particular demonstrate very different shopping habits compared to older cohorts. Researching products online before making purchasing decisions has become standard practice. Review sites like Yelp play a major role in evaluating local businesses before a visit. Customers also weigh environmental and social impact more than in the past, favoring brands that align with their values. Subscription and resale models are also on the rise as an alternative to traditional ownership. Retailers need sophisticated data analysis of purchasing patterns to stay relevant. Flexibility and a proactive, customized approach will be required to attract time-strapped, experience-oriented modern shoppers.

Omnichannel Retailing

In response to these shifting behaviors, the most forward-thinking retailers have implemented omnichannel strategies to deliver seamless shopping regardless of channel. This involves a unified approach across physical stores, websites, apps, social media, and other interfaces. Customers can now research products online, try them in-store, check inventory levels, buy online for pickup or delivery, and return purchases between channels with ease. Data is leveraged from all touchpoints to improve personalization and optimize inventory, pricing and promotions. Leaders like Nordstrom, Target, and Walmart have invested heavily to fully integrate digital and physical offerings. Customers have rewarded these retailers with increased loyalty and spend through a consistently excellent experience.

Rise of Private Labels

Another avenue retailers have pursued is expanding their own private label brands, sometimes called store brands. These exclusive product lines allow higher profit margins versus national brands while meeting customer demand for value. Major chains like Kroger, Walmart, and Amazon have achieved huge successes with their house brands, gaining 15-30% private label  shares in key categories. Consumers now view many store brands as comparable or even superior to name brands. Retailers have invested in high-quality design, ingredients, and packaging make private labels as desirable as major brands. This strategy builds customer loyalty while pressuring national brands through increased competition. Overall private label sales have grown steadily over 7% annually and now account for over 20% of packaged goods sector revenues.

The Future of Retail

Looking ahead, emerging technologies will continue transforming both consumer products and retail experiences. Augmented and virtual reality promise to elevate online shopping through interactive 3D product views and virtual “tried-ons”. Advancements in artificial intelligence and data analytics will power new levels of predictive personalization. Voice commerce through smart speakers and other assistants may become a primary entry point. Technologies like 3D printing may one day make physical product shipment a thing of the past. Retailers experimenting with automated warehouses and drone deliveries aim to perfect on-demand fulfillment. Subscription box services presage a future focused less on ownership and more around access. How consumers shop and what they demand will constantly evolve. But retailers that embrace innovation, empower omnichannel experiences, and stay closely aligned with shifting customer desires will be best positioned to thrive in whatever forms retail may take.

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Alice Mutum is a seasoned senior content editor at Coherent Market Insights, leveraging extensive expertise gained from her previous role as a content writer. With seven years in content development, Alice masterfully employs SEO best practices and cutting-edge digital marketing strategies to craft high-ranking, impactful content. As an editor, she meticulously ensures flawless grammar and punctuation, precise data accuracy, and perfect alignment with audience needs in every research report. Alice's dedication to excellence and her strategic approach to content make her an invaluable asset in the world of market insights.

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