What is the store of tomorrow? This is the topic in every retailer’s boardroom today. Change is a constant in the retail world, especially in historic moments like the current post-pandemic transition. There is not one store of tomorrow; there are many stores of tomorrow. Precise data tools that measure customers’ demographic and psychographic needs will continue to define market segments. Our societies will be subdivided into more and more separate, specifically defined homogeneous groups. It is already possible to see this fragmentation in the market for groceries. In today’s grocery business a wide range of formats compete for specific niches in the marketplace. These range from giant hypermarkets to warehouse clubs, neighborhood grocery stores, fresh food specialists, private-label discounters, and local dollar stores. Then you can include the numerous home-delivery prepared food options to this list. These formats differ widely in product assortments, online and off-line services, and prices. It takes different strokes for different folks. The marketplace will continue to fragment by customer segment—but it will be dominated by the most efficient retailer within each segment. There will be fewer but stronger retailers. These winning retailers will focus on the customer’s motivation and will engineer the right solutions for their market segments, which will gravitate to one of these three customer groupings:
- The value-conscious customer driven by price
- The discriminating customer driven by unique products
- The full-service customer driven by solutions to needs and desires
Technology will drive and empower the retailers who focus on each of these customer groups. The systems and disciplines developed will zero in on different digital tools to define each retailer’s unique, sustainable, compelling, competitive advantage. The winners will be the retailers who embrace change and invest in the technology required to perform with excellence. This will enable them to be clearly seen as the best, trusted choice for their target segment customers. Which retailers will achieve this preferred status? This will ultimately depend upon the culture of the company. Everything hinges on people!