The retail revolution: four archetypes leading the way in the new retail landscape

Elle Coffin and Frank Guzman

19 Jan 2023

6 minute read

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The way consumers interact with brands is evolving at an accelerated pace, giving rise to new trends such as increased circular and share economies, up-cycling and reselling, and the shift to service models. Four new retailer archetypes have emerged, and for brands to be successful, they must consider their role in this changing landscape and clearly demonstrate customer value and experience to drive differentiation.

SUMMARY

1. The way consumers interact with brands is evolving at an accelerated pace.

In retail, new behaviours have given rise to trends including increased circular and share economies, up-cycling and reselling, the shift to services models, increased value-driven consumption, service beyond products and blurred boundaries across retail channels with Web3.

2. Out of shifting global trends and market signals, four new retailer archetypes have emerged: the Pioneer, the Advocate, the Coach and the Connector.

To tap into a playbook for future success, brands first need to consider what role they play in a changed landscape.

3. The increasingly competitive consumer market has created a need for brands

To clearly demonstrate customer value, customer proposition and experience to drive new value and differentiation.

What will you stand for, and who will you attract?

THE FOUR ARCHETYPES

1. The Pioneer

The Pioneer retailer is re-imagining business models and propositions to unlock new value for its brand, customers, and the planet.

Climate change, resource shortages and unsustainable consumption are creating a demand for brands to have actionable and transparent sustainability principles. Propelled by an aversion to waste and excessive consumption, consumers have less interest in product ownership and a strong desire to use services models such as borrowing, sharing, subscription or membership.

There is also an increased uptake of sustainable product lifecycles, rent before you buy models and circular design architecture. This is likely to continue to drive new business and operating models.

The circular economy trend isn’t new, but its growth reflects the increasing ambition to solve sustainability issues within retail. As a result, brand initiatives such as Patagonia’s WornWear, Ikea’s Buy Back Friday and Faircado’s AI powered second-hand shopping experience are thriving. Be sure to read our article about Circular CX for a deeper look.

2. The Advocate

The Advocate takes meaningful action to drive transparent and honest inclusion principles and alignment with the brand’s values.

People expect brands to do more than just make a profit. Today, 78% of consumers want brands to step up to support marginalised communities and 60% believe brands that are not inclusive will become irrelevant.1

There is now a focus on inclusive entrepreneurship to address the unmet needs of communities. In retail, this involves championing diverse creators, upended traditional beauty norms, enriched belonging, mental wellbeing, digital safe spaces and accessibility.

Inclusive retailers can expect many benefits including long-lasting relationships with customers, broader customer reach, improved customer experience, diverse voices, positive social impact and strong partnerships.

Brand initiatives such as The Vans 2022 project, which featured diverse non-profit collaborators and Starbucks’ partnership with the Aira app to connect blind or low-vision customers to products, have seen success in these areas.

3. The Coach

The Coach extends the customer relationship beyond the initial purchase to engage in support, learning, application of skill and knowledge, upskilling and experimentation.

In teaching someone a skill or providing them with knowledge, brands can gain trust and grow awareness of their brand. Beyond purchase power, educational content has a strong impact on the users’ trust and brand relationship.

Brands have achieved an extended customer journey and greater loyalty through initiatives including in-depth training sessions in-store and on-site. Apple and Williams Sonoma have implemented sessions to educate, inspire and spread knowledge, resulting in improved customer connection.

"The retail experience has gone beyond just providing a pathway for consumers to make a purchase. Brands now are creating spaces, developing post-purchase offerings, venturing into new partnerships and leveraging data and analytics to extend the customer journey, foster customer loyalty and create customer community, ultimately increasing their share of markets and segments."

Elle Coffin

Human Experience Architect, Director, Deloitte Digital

4. The Connector

The Connector blurs boundaries across all retail channels with an emphasis on leveraging social relationships, data platforms and marketplaces for building relationships, promotion and selling.

Technology today allows brands to extend customer experiences and appeal to all the senses to make Web3 more inclusive. Brands are beginning to weave physical and virtual environments together through high-fidelity 3D mapping and VR streaming to virtually transport and connect consumers and product. This means brands can expand interaction with customers and show virtual goods as commodities through direct-to-avatar technology enabling greater visibility and accessibility to digital-native consumers.

Brands can then see, hear, and measure key variables in environments. This is driven by sensors that feed real-time to analytical engines in the public clouds of most notably Amazon, Microsoft, Google, IBM, and Alibaba to gain insights about our intents, priorities, wants, needs, behaviour and lifestyles.

WHAT YOU CAN DO

In this new landscape, retailers should be considering three key questions:

1. What will you stand for and who will you attract?
2. What role can your business play to differentiate in the future?
3. How will you defend against the price-advantaged business models?

For the Pioneer, brands can begin to think about sustainable product lifecycles, rent before you buy options, circular design and architecture, and service delivery models. Is your business committed to sustainability and reducing waste? What new value models can you unlock through a circular approach?

Those who align with the Advocate archetype can explore consumer values, amplifying brand inclusivity practices, value-based loyalty programs, transforming retail centres into community hubs and privacy and data protection. Will your brand address societal challenges? How relevant do you want to stay?

For the brands who consider themselves to be the Coach, begin to uncover how experiential destinations, post-purchase offerings and machine learning can play a part in improving the customer experience. What do you want to be remembered for? How do you want to educate your customers?

For the Connector, consider what role inclusive Web3, virtual teleportation, direct-to-avatar virtual merchandising and ambient retail could do for your brand experience. What if customers could interact with your brand in a way that best suited them?

This perspective was written in collaboration with Frank Guzman, a manager in our Customer Strategy & Design practice.

Sources

[1] IKEA renames the KALLAX and the BILLY bookcase for Buy back Friday

Published 19 Jan 2023

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SUMMARY

1. The way consumers interact with brands is evolving at an accelerated pace.

In retail, new behaviours have given rise to trends including increased circular and share economies, up-cycling and reselling, the shift to services models, increased value-driven consumption, service beyond products and blurred boundaries across retail channels with Web3.

2. Out of shifting global trends and market signals, four new retailer archetypes have emerged: the Pioneer, the Advocate, the Coach and the Connector.

To tap into a playbook for future success, brands first need to consider what role they play in a changed landscape.

3. The increasingly competitive consumer market has created a need for brands

To clearly demonstrate customer value, customer proposition and experience to drive new value and differentiation.

What will you stand for, and who will you attract?

1. The Pioneer

2. The Advocate

3. The Coach

WHAT YOU CAN DO

Deloitte Digital

Deloitte

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