Magazine article CRM Magazine

Retailers Must Future-Proof for an Evolving Value Chain: Customers Will Continue to Gain Power, and Businesses Must Constantly Reshape Themselves to Meet Their Demands

Magazine article CRM Magazine

Retailers Must Future-Proof for an Evolving Value Chain: Customers Will Continue to Gain Power, and Businesses Must Constantly Reshape Themselves to Meet Their Demands

Article excerpt

Companies today need to anticipate a shifting consumer climate, adapt quickly by leveraging sophisticated technology, and future-proof their businesses, all with the goal of accommodating evolving customer expectations, speakers emphasized at the National Retail Federation's Big Show in New York in January.

Kees Jacobs, global consumer products and retail engagement lead at Capgemini, highlighted key findings from Rethinking the Value Chain: New Realities in Collaborative Business, a recent study by the Consumer Goods Forum. The study drew on current trends to predict what urban megacities will be like in 2025, both from a consumer and an industry perspective. "One thing is clear," Jacobs asserted, and that is by 2025, "consumer behavior [will have] changed forever," as customer demands continue to rise and people begin to leverage new technologies and business models to improve their lives.

"Traditional stores [will have] been repurposed, distribution models massively transformed, and manufacturing and sourcing [will have] shifted," Jacobs said. Consequently, companies will play a different role in society, as the "current value chains are profoundly disrupted."

The retail industry, Jacobs explained, will transition away from linear, sequential value chains--in which products are transferred through sourcing, manufacturing, distribution, and retailing to the customer--toward a new model. Companies will have to craft their operations around consumers, working to provide them with new flows of information, products, and transactions. "Consumers [won't] just buy stuff," Jacobs said. They will be at the center of these networks, as they "pull the strings ... on their dynamic paths to purchase."

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The modern value chain, Jacobs said, is about catering to "the quality of living for individual consumers in their communities," as well as their desires for convenience and well-being.

To be successful in this new marketplace, companies will need to provide "relevant experiences to consumers that will focus on the context of their lives," Jacobs said.

They will need to remove the constraints in their operations and take advantage of business models enabled by new technologies. Among these are new means of transportation, like drones or driverless vehicles; 3-D printing; augmented reality; and Big Data analytics. …

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