What is consumer behavior in retail

Direct route to the customer: Why traditional retail is hardly needed anymore

That was the good old trading days: industry manufactured, trade put it on the shelf - the customer bought what he was supposed to buy. Today the customer buys what he wants. Therefore, soon only that will be produced - and sold directly to him. Sounds easy, but there are still pitfalls.

Share this article Jens Wasel once told in an interview with Etailment what went wrong in his career as an entrepreneur. Wrong products offered, fell for the wrong suppliers - how you can just go wrong when you start as a two-man business selling goods via Amazon Marketplace.
Despite the change in tempo, some good things are valuable longer. Smart studies, useful tips, useful tools. That is why we are presenting you the best timeless items from etailment in loose succession.
But Wasel and his business partner Max Kronberg also called customers personally at the very beginning if something was wrong. "Our goal was to get one hundred percent customer satisfaction on all platforms. If we got a negative rating, we somehow solved the problem," said Wasel, describing the early days.

Some things are only available through the internet

Kronberg and Wasel are kw-Commerce, today one of the most successful Amazon retailers, who invent, among other things, electronic products and cell phone accessories, have them produced in Asia and sell them via Amazon. For Hagen Meischner, kw-Commerce is a good example of rapidly changing retail. "kw-Commerce is a company that could only come into being through the Internet," says the Partner Manager Lead from Shopify, the cloud shop system for online retailers. Meischner is the contact person for Germany.
kw Commerce founder Wasel, Kronberg: Unthinkable without the Internet
And the Internet will break up classic trade formats and traditions and make them superfluous, today, and even more tomorrow. Because the sales channel to the customer will increasingly take place without detours, without stopping through a distributor, i.e. a dealer. Why not?

"There will still be shops in the future"

However, Meischner cannot confirm that the industry is ringing the death knell. "There is no such thing as black and white. Because there will still be a lot of people in the future who like to stroll through shops." The only question will be: How many of these stores or classic online shops will still be needed in a few years' time? And how do customers even want to shop in the future? Countless studies are looking for answers to such questions, including those from GS1, the experts for global technology standards, including in the retail sector, who look ahead to 2025.

When the consumer no longer understands the world

"In 2025, shoppers will be faced with enormous complexity, not just in terms of new technologies and processes. The great variety of products and prices as well as the flood of data and information increase the feeling of confusion, disorientation and lack of transparency. Many consumers no longer understand the world and sometimes no longer want to understand them. This results in a strong need for trust and orientation. Those who offer both have won, "it says.

Because the platforms are both a curse and a blessing at the same time. An enormous offer, which, however, has to be tailored to the respective consumer. The more the customer is surrounded by crowd, the more he longs for orientation. "There will be a massive shift in purchasing behavior," says Hagen Meischner. "For example, the customer will be looking for clothing that is highly individual."

Customizing is overwhelming for retailers

Customizing will therefore be the big issue, i.e. exactly the production of goods that the customer wants. "And here the classic retail will no longer keep up," says Shopify manager Meischner beforehand. kw-Commerce shows how it is done: They track down trends on the Internet - and deliver the products to go with them. How do Karstadt, Kaufhof or C&A want to create something like this? With Oder cycles, in which blouses are ordered from the manufacturers a year in advance?

"In 2025, the shopper expects more than ever that he will get exactly what he wants and not just what is currently on offer. And precisely when it fits into his time management. He also tries to keep the balance between his needs on the one hand and the - also financial - possibilities on the other, "says GS1.

Amazon is responsible for the duty, not the freestyle

This leads to a two-pronged purchasing behavior. There is the simple, quick requirement cover - and Amazon will be responsible for that. Amazon is the king of functions. You get everything and delivered quickly. GS1 also expects subscription services in which an automated basic service replaces time-consuming purchases.

What Amazon and vending machines cannot: create a shopping experience and individuality. This is the opportunity for other destinations - stationary and online. Or for smart social media marketing. In the United States, 76 percent of branded goods purchases are made after consumers have seen posts on a social network, says Hagen Meischner.

Social media as an incentive to buy

The more direct buying opportunities on Facebook and Instagram become established, this trend will also intensify. In Germany, this avalanche should also start rolling - at the latest when Generation Z, i.e. today's teenagers, reach the age relevant for consumption.

Retailers who are still not or only reluctantly on Facebook and especially Instagram today should act. Because at some point they are no longer visible and of importance. Because in the future, even more applies than today: the customer is no longer loyal. Always shop well in your local shop - such behavior will go out of style. "The classic brand loyalty no longer exists," says Hagen Meischner beforehand, "we have to fight for customers anew every day".

Always, everything, immediately, conveniently, inexpensively. Is there anything else?

The shopper 2025 has a dominant "mindset", writes GS1: "Always - everything - immediately - convenient - inexpensive - state-of-the-art! Anyone who does not meet this requirement receives the maximum fine. The shopper chooses another provider, After all, he can access an enormous variety of offers, price comparison portals and internationally networked marketplaces everywhere around the clock. "

Which brings us back to the social networks, where this battle is being fought and won and lost. Because it is about interaction with customers, about exchange, about accepting wishes and quickly satisfying them. When the fashion retailer Sheego brings customers to the Hanau headquarters for workshops today to find out what they like in the range or what will be desired in the future, then something like that is also part of it.

Shopify manager Meischner: "The classic brand loyalty no longer exists."

Brands too have to learn that nobody is loyal anymore

But when it is said that "direct-to-consumer" has enormous opportunities, it is easy to write. "The brands are still having a hard time with it," says Hagen Meischner. Because producing is one thing, but also bringing it to the customer is another. Precisely because everything is fleeting, the brands still have to learn that they no longer have fully comprehensive insurance so that customers always buy their product range from them.

The example of Gillette shows what happens when a brand does not master the D2C business as well as others. The razor blade still had a market share of 70 percent in the United States in 2010. But when the Dollar Shave Club and Harry's in 2013 competed with their razor blades, Gillette's star sank: in 2016, the market share was only 56 percent.

The new buying behavior of customers demands more speed and new, flat structures from manufacturers. "These are increasingly replacing classic hierarchies. They allow companies to react faster and more flexibly and to make better use of the strengths of their employees," expects GS1. Anyone who is not agile and still trusts the old reporting channels will be left behind by the market. And you can confidently transfer that to trading companies.

The death of the many surfaces

Another thing that the "direct-to-consumer" system should bring with it: It makes shops superfluous. In 2017, every German consumer had an average of 1.44 square meters of shopping space available, as the Handelsverband Deutschland (HDE) determined, only Belgium (1.67 square meters), Austria (1.66), the Netherlands (1.59) and the Switzerland (1.50) had slightly more.

This oversupply will take revenge. Former expansion machines such as the fashion retailer Gerry Weber are already noticing this and have filed for bankruptcy. And the Karstadt and Kaufhof department stores will shrink anyway. These anchor dealers from the old days are being robbed of their traditional function as middlemen between manufacturers and customers.

One brand has everything in hand

"The 'Direct to Consumer' system offers completely new possibilities," is Hagen Meischner's assessment. In the future, a brand will have control over the entire process from development, from production to marketing and sales. It is no longer dependent on the presentation areas or purchasing conditions offered by a trading company.

In soccer, the direct route to the goal is usually the best. And this system also applies to consumption. Directly to the consumer, it will say. It will be challenging for retailers to keep up.

MORE ON THE SUBJECT:

© Fotolia / ArchiVIZ

How the selection giants Otto, marketplaces and platforms stir up the furniture trade

The online furniture business is growing in importance, is well distributed and dominated by the big ones who offer mass. If brick-and-mortar retailers want to play along, they have to offer perfect multichannel solutions. But it's not difficult. Read more


© Fotolia / rogistok

Fight for the drill: Amazon is also making home improvement a part of its project

The hardware stores are tinkering with online strategies and are hoping for the radiance of their large stores. But the do-it-yourself range at Amazon is now so gigantic that customers have less and less to go to the shops. Since there are too many of them anyway, traditional companies get into trouble. Read more


"Amazon cannot seduce women"

Technical gimmicks like WLAN in stationary shops are pointless. Instead, stores and online shops should tell stories and provide orientation and seduction in the affluent society. Because even online giants have some catching up to do here. Read more

In this edition

    Courage to start again

    How to get your business going again

    sale

    With the right influencers for more sales

    sustainability

    Secondhand gains market share

Read epaper