Nick Shanagher says a new report is a must-read – if you want your business to survive.
Accenture recently unveiled a major research report, Shaping the Future of Retail for Consumer Industries, which predicts that the next decade will be a golden age for the consumer.
Shoppers will have more choices and control than ever before, Accenture’s experts claim. To make this happen, the boundaries between retailer and manufacturer will keep blurring – promising more change in the next 10 years than there has been in the past 40 for the consumer packaged goods industry.
It is the same pitch that you will have heard or read about in Better Wholesaling month in, month out, for the past few years. Nevertheless, if you are thinking about the survival of your business, you must read this report.
If you think the implications of the Tesco-Booker merger are mindblowing, the three-page executive summary will be a seat-of-the-pants rollercoaster ride into Hell.
There are four drivers of success that every company will need to deal with in the near future. The first is a deep understanding of and connection to the ‘empowered consumer’ – think of your niece armed with her smartphone.
‘Globally, consumers have access to more than 1bn different products offered by a wide range of traditional competitors and new entrants, all experimenting with new business models and methods of customer engagement,’ the report says. ‘As choices increase, loyalty becomes more fragile and the consumer becomes more empowered.’
The second driver is the ability to promptly incorporate disruptive technologies. Do you take orders over Snapchat? As the report notes: ‘The following eight disruptive technologies are critical for transformation: the internet of things, autonomous vehicles, artificial intelligence, machine learning, augmented reality, digital traceability, 3D printing and blockchain.’
Blockchain – a digital ledger of transactions, agreements, contracts, and anything that’s independently recorded and verified as having happened – may be the one that causes wholesalers the most stress.
The third driver is the ability to combine offline and online business models – perhaps ordering your favourite Tesco products to pick up at the Premier store by the bus stop? Emerging business models will continue to proliferate, gaining scale and momentum.
With slow-growing incomes in most digitally-developed countries and a shift in consumers’ spending from products to services, the retail industry is due to see greater value migration than value addition. ‘Despite ecommerce growth, the physical store will remain the channel that contributes the most,’ says the report. ‘But, its value proposition will evolve from being a distribution channel to that of a platform for discovery.’
Don’t expect to make money out of this. Of the US$2.95tn in potential value being created for industry and consumers, the latter are expected to capture 68%. Consumers will want more, better and cheaper all at once.
The final driver is the ability to stay a step ahead of the consumer. There are three must-have capabilities for this: the partnership mindset, with all participants having to develop a culture of collaboration and pursue intra- and extra-industry partnerships; last-mile delivery; and advanced data sciences.
If you’re thinking this all looks expensive, you’re right – it will be both expensive and difficult to compete.
In 2026, the high street will be transformed. As the report observes, shopping is a ‘rich, engaging and specialised experience. Stores are destinations to interact with the product and provide an ambiance which encourages consumers to stay and keep coming back.
‘Activities that do not drive value to the consumer experience – for example, stocking shelves – are automated. Robots work alongside highly skilled human frontline staff.’
It all sounds fanciful, but it was only 10 years ago that Steve Jobs went to Macworld and talked delegates through how Apple had reinvented the phone with its new iPhone.
What Accenture is saying is that from now on, every year you should expect to be disrupted by something as big as the iPhone. Wow!