While COVID-19 continues to be a catalyst for many storefront closures, online marketplaces that aggregate myriad options will continue to thrive. But this buying channel work best primarily for companies with commoditised goods and services or those seeking broad and quick reach.
According to a report from Forrester, just as online travel aggregators displaced travel agents 20 years ago, marketplaces will displace traditional retail destinations like undifferentiated grocers or low-price department stores.
“Those that survive will pivot away from commodities and lean into private-label lines or unique products not widely available to consumers,” the report said. Consumers no longer need to trade off price, convenience, and an emotional experience, so brands must cater to all these needs at once.
In addition, the research firm noted that exclusive and sought-after brands will thrive outside marketplaces. Brands will own more of their destiny as they sell directly to consumers and prohibit marketplaces and other distributors from discounting their goods — giving their owned properties preferred status.
And many are already embarking on this route: Disney withdrew distribution from media platforms like Netflix to make its products available exclusively via Disney+ while European grocers Intermarché and Tesco thrive on their private-label items.
“But brands will need strong websites, digital marketing prowess, customer data and insights, and an appetite for price/offer matching to be best positioned to thrive,” said Forrester, adding that the future of B2C buying is not a shift from traditional to digital or abandonment of self-service in favour of delivery: It’s all the above.
Selling shifts from persuasion to experimentation and experiences
More firms are allowing people to experience their products and services with little or no upfront payment and without lock-in. These models make it easier for consumers to switch providers, so they’re more willing to take a chance on brands and products with these approaches.
While rentals and subscriptions have enabled this in a few categories for years, brands like Bird, Joymode, Rent the Runway, Spotify, and Stitch Fix are now using innovative pricing and distribution models, aided by the fluidity of digital. Firms do this through fractional and recurring payments, enabling access instead of ownership; or they reduce the purchase risk by making it very simple to return products.
Privacy and values rise in purchase considerations
As the market power of values-based consumers rises, every company needs a systematic values strategy, even if it means holding true to niche values that your company believes in. Forrester found that 21% of US online adults always research a company’s position on corporate social responsibility (CSR) to see if it aligns with theirs before making a purchase.
In addition, consumers are increasingly questioning product paternity, supply chains, employee labour practices, and anything else that companies may have ignored or concealed in the past. The firm’s research showed more than 60% of online adults in Canada, the US, and Europe want the companies they buy from to be transparent about their business practices.
Sourced from Forrester