Consulting Trends in the Retail Industry: Innovation Is Key

Consulting to retailers continues to be driven by the need for innovation in a highly competitive environment.  Jeff Bezos' famous saying "your margin is my opportunity," aptly describes the current retail climate, and consultants will be advising their clients to move forward at exponential speed as traditional players transform their business models to compete effectively with new market entrants including manufacturers, start-ups, and other third parties.  To gain competitive advantage, retailers will need to differentiate their products with additional service offerings emphasizing added value and customization for increasingly demanding consumers. Consultants should see continued strong demand in several service areas including Strategy & Operations (S&O), IT, HR and Financial Consulting.

S&O consulting will focus on several major themes including omni-channel delivery, agile supply chains, and digital transformation.  A changing consumer landscape is led by millennials who are twice as likely as baby boomers to shop online in a week, and eight times as likely to shop on their smartphones. Quality customer service is critical with 25% of millennials expecting a customer service response within ten minutes of an inquiry.  To address this, consultants are developing omni-channel strategies focusing on innovative products with added service offerings.  For instance, Instagram is testing "shoppable photo tags" which enable consumers to tap on a shopping tag in a photo to get immediate product details and a "buy now" option.  Consultants will also address the shift toward a "sharing economy", increased access, and fast and seamless delivery.  The trend toward temporary pop-up stores rather than signing long-term leases will continue as will meeting demand for almost instantaneous delivery (think of Nordstrom's use of UberRUSH or Amazon's same day delivery).  Agile supply chains will be critical to success.