Dissertation project - Stage one report

STAGE

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ONE

2 Introduction

Ayse Kahraman | N0506544 Word count | 6,600

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Today vs Tomorrow consumer consumer behaviour

Towards a new retailing paradigm Distruptions within retail

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4 Methodology

Digital Age Primary Research Secondary Research

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46 Conclusion key insights Recommendations

Other refrences biblography illustrations

introduction The future thinking report analyzed technology, highlighting how it has allowed the ease for convenience, as well as, providing today’s consumers with a tool that can empower them and give them a sense of comfort in a hectic world. We can now control and juggle our life in a ways unheard of just a decade ago, as well as this, technology has created an outlet for industries to stimulate changes that can enhance and improve our lives, it has made consumers and businesses more globally connected, created online and offline commerce, as well as, enabled connectivity on an extreme scale, communities, friendship that formed across cultures, beliefs and borders. Consumers are in control of their interactions with businesses in the digital age.

There are a number of disruptions and potential opportunities technology can provide in each industry, however, retail has shown significance throughout each industry sector as it is an essential part of our society and human life that is continuing to shape and influence both consumers and brands and as a whole impacting how society will be shaped in the future.

The retail industry has shifted towards consumers who are becoming the drivers of brands, highly informed, socially connected through digital technology and with rapidly rising expectations surrounding the quality and ubiquity of a seamless shopping experience across their digital and in-store activities, so what does this mean for the future of retail?

As the retail landscape is overcrowded and customers are becoming desensitized to traditional marketing methods, by adding technological elements and competencies in retail will this provide a more satisfying experience that meets the heightened expectations of modern shoppers, as well as, capture the consumers attention. However, will we continue to see in the future technology enabling consumers lives to become even more permanently immersed in their digital lives, prioritizing the virtual world and becoming so obsessed and over consumed by technology, will consumers drive the need for technology or are they going to be bombarded with it through brands and retailers. The following report focuses on the research question below: “ How technology is shaping consumer behaviour whilst exploring its future with the retail environment?�

The purpose of this report is to explore if consumer’s behaviours have shifted and if so how and why, as well as, uncovering the effects consumer behaviour is having brands and how is this influencing the retail industry. In addition, the role of technology has in society today amongst society and consumers will be explored, which outline if these shifts in consumer behaviour and the retail industry is being driven by technology and will continue to be in the future.

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Methodology RATIONALE: The importance of the chosen topic is due to personal interest in how technology has become a major influence on society, consumers, behaviours and the impacts this is having on businesses and how this is creating changes that will impact the future of our surroundings and one being the retail industry.

Our lives have become increasingly immersed in technology. Much of our communication is now online, much of our leisure and entertainment is provided by the Internet and video games, and many of us find our mobile phones have become an essential part of our connectivity and everyday organisation.( Dr Paul Howard jones : 2013)

The question is with these changes in lifestyle, what is technology doing to consumers and brands and what impacts it is causing to society. Its stated today that consumers have become tech savvy, information rich, socially empowered but, as technology keeps evolving it will continue to be driven by these types of consumers and will consumers continue to drive brands, as today the general shift from product centric to consumer centric businesses, brands has also undergone a shift, and are now transforming consumer into fans they draw into the brand this all contributes to impacting the retail industry and how retail will shape itself in the years to come. Also consumers rapidly rising expectations surrounding seamless shopping experiences across their digital and in store activities are drastically disrupting the retail industry to nature a more satisfying experience that meets the heightened expectations of modern shoppers through ensuring convenience, personalization and experience, however is this the actual case and if so is technology the answer that can allow the retail industry to ensure brands are catering to the consumer and fulfill the heightened expectations of the consumers.

This chapter presents the methods and study approaches involved in examining if technology is shaping consumers and brands whilst exploring its future within the retail environment. This chapter will also cover the methods of data analysis, type of data collected and the research design, whilst ensuring the aims and objectives of the research question are met. The following research objectives outlining the research: 1.To identify if consumers patterns and behaviors are shifting, as well as, discovering the needs and drives of consumers in the retail industry?

2.To investigate how technology is being use in retail amongst brands and consumers?

3.To evaluate if technology can benefit and enhance the retail experience for the ageing consumer?

4.To evaluate if technology can break the barrier of online and in store for the millennial consumer?

5.To investigate the retail environment how it has evolved and how it is continuing to evolve?

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Primary research Primary research provided original data directly about the market and consumer. A range of field research methods were undertaken including questionnaire, focus group, observations and interviews, all of these were undertaken in order to lead the pathway to solving problems and highlighting solutions.

Questionnaire: Questionnaires was used as a main tool of field research which contained a serious of standardized questions ensuring confident interpretation in the same way by all respondents and the collection of explanatory and analytical research that enabled examination of relationships between variables.

Questionnaire 1 & 2 Questionnaire 1 and 2 was conducted to examine technology and its role in society today comparing and contrasting the views of millennials and baby boomer consumers. Allowing the investigation into if technology is keeping society constantly connected and playing a central role in our everyday lives or if it is creating a digital divide amongst society and perceived in a negative light.

Questionnaire 3 Questionnaire 3 was conducted to analyse consumer patterns and behaviours in the retail environment particularly apparel, whilst examining the views surrounding the industry.

Allowing the investigation into if consumers have high expectations of a seamless shopping experience and the platforms which they are using to shop has changed and the reasons behind this. The sample included 150 respondents both men and women from the ages of 16-70 years old and was distributed through the internet as it allowed easy access to consumers.

benefits and limitations The benefits of conducting a questionnaire is a large size of sample was collected across genders and ages which enabled collection of both qualitative and quantitative data that showed varied opinions, allowing for comparisons and contrast to be made, as well as, generalisability . However, it is argued to be inadequate to understand some forms of information, as the questionnaires were conducted through the internet they can lack validity, as respondent may have interpreted each answer differently, however, other primary methods will be used in order to overcome these limitations.

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Primary research Focus group enabled an organized discussion with a selected group of individuals to gain information about their opinions and views . Two focus groups were undertaken as they were split into different age categories, this was to enable demographic to get their views across as well as enable comparisons and contrasts to be formed.

Focus group 1 Focus group one was conducted to gain insight and understanding into the consumer opinions of the retail environment particularly apparel and the use of technology today. Discussion into the benefits and libations of online and in store, the experience that each provide or are lacking and the role technology is playing today using examples of brands within the industry and discovering gaps or solutions. The focus group one sample included 5 interviewees 2 men and 3 women from the ages of 18 – 35 and was conducted in the UK.

Focus group 2 Focus group two was conducted to gain insight into consumer opinion of retail experiences in store and online, tapping into their consumer behaviours and needs/wants in order to find gaps as to why things are shift towards either direction. To see what they are wanting from brands and if technology can fill this and are they open to the idea of being able to use technology and if they feel technology is helpful and important to them as well as uncovering if there are there any barriers. The focus group two sample included 5 interviewees 2 men and 3 women from the ages of 35 – 70 and was conducted in UK.

benefits and limitations The focus group enabled qualitative data which allowed for a broader understanding of underlying reasons, opinions, and motivations in relation to consumer behaviors, technology and retail.

Due to the focus groups being split up into age categories, it was easier to control and analyses as interviewees has similar views, it also allowed interviewees to feel comfortable as the dynamics were non intimidating. However, the focus group may not be as representative as they cannot speak for the whole demographics or consumers in retail and none/ users of technology especially as the sample included only five participants in each.

Interviews Individual Interviews were conducted in order to gain views from experts in the field which is being explored including consumer behaviour, retail environment and technology. Four interviewers were conducted and further details about the interviewees can be shown in appendix 4. The interviews were structured and conducted via email, the interviews enabled in-depth qualitative data of the opinions and perceptions of these individuals, however, due the questions being structured as well as being conducted via email it only went in one direction and lacked flexibility to talk about other factors that may have provided another viewpoint.

ETHICS The responses remained anonymous during the interviews and were only identifies as interviewee 1 to interviewee 10.

Ethical consideration was also achieved by asking permission to conduct the study and the participants were made aware that they could withdraw at their own will and anytime from the study. The participated involved in the study were recruited after an informed consent was obtained.

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Primary research Observations provided contextual information and insights into the environment, events, activities and interactions of consumers, which allowed great levels of understanding to be collected. Observation one was conducted to analyse consumer behaviour and shopping patterns in regards to retail particularly apparel.

Observation 1 The observation carried out was structured and involved a checklist of behaviours that consumers may or may not carry out when shopping, however, when conducted the sample was uniformed that the observation was being carried out. The sample included eight individuals roughly from the age of 20 to 70, both men and women and was carried out in London, Selfridge store.

The observation enabled first hand insight into consumer behaviour rather than how consumers state their behaviour and provided rich qualitative data. However, due to being structured there may have been certain behaviours that could have been missed as the focus was only on certain ones. There is also little control of extraneous variables in the observational study, for example, as it was conducted on a Saturday due to the busyness of the environment the observation was conducted in this factor could have influenced the shopper’s behvaiour that day, which makes the research less valid.

Observation 2 Observation two involved four different stores including, Selfridges, John Lewis, House of Fraser and Topshop all situated in London city. The observation was conducted to uncover if consumers are multi-channel shopping and how many consumers are using this convenience service, to find out if it something that they are driving in retail. The observation involved uninformed observation of the click and collect area in the following retailers for half an hour, it enabled quantitative data to be gathered, however, the extraneous variables are a limitation as due to it also being a Saturday, this may have been a day where the shop receives it highest amount of collections and the rest of the week could be a different result.

Secondary Research Secondary research has been carried out in order to collate knowledge exploring theories, concepts and point of view in order to evaluate how they relate to the research question, how technology is shaping consumer behaviour whilst exploring its future with the retail environment. Secondary research supports the primary research conducted to either act as a counter argument or agree. The following secondary was carried out.

Documentary material

Documentary material

Documentary material was explored which included written sources from newspapers, journals and websites, these sources were used to gain insight into recent and up to date knowledge and opinions which explore the research question, for example, the guardian newspaper uncovered drivers of markets exploring what current brands are doing in regards to disruptions happening in the retail industry. WGSN also covered consumer trends today and for the future, which enabled new viewpoints to be gathered as well as act as a support for primary research. These sources also allowed for global perspectives and data to be gathered, which provides support to compare and contrast again primary research.

Non-written materials such as, voice and video recordings from sources such as YouTube i.e. ted talks enabled insights to be gathered from expertise in the field of technology and retail, looking into the current disruptions and trends happening today and future outlook that it could lead to.

Books and case studies Books were used to broaden theorists as well as shed light on topics on retail, consumer behaviour and technology. However, as books can be outdated to ensure validity and reliability only recent and relevant sources were selected. Case studies were used to explore what todays brands and retailers are currently doing in the market place.

Secondary research provided both qualitative and quantitative data to be collected through the use of different sources and was easy to obtain, due to the topic being explored is currently being debated in society today. However, due to the topic being fairly new i.e. digital technology certain sources such as books were hard to come by in terms of up to date and relevant, as its changed dramatically in the last few years and continuous to change rapidly.

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DIGITAL AGE Think for a moment about how much your lives have changed over the last 10-15 years, think how much technology has radically changed how we live and communicate (Tracey Follows : 2015 ).

Digital technology has created a shift of human communication through the disruptions of mobility, social media, cloud, big data and analytics. Today due to the rise in advancements of technology, the modern conception has been interpreted differently and technology is more complex, it has become a part of human life more than ever before as it is continuously keeping us connected socially, as well as, providing us with ease in all aspects of life, “we are now said to be living in a post- digital society” (Eric Schmidt 2013) however, it is argued that we are far from being post- digital as we are only at the beginning.

The digital economy is comprised of markets based on digital technologies that facilitate the trade of goods and services through e-commerce. The expansion of the digital sector has been a key driver of economic growth in recent years, and the shift towards a digital world has had effects on society that extend far beyond the digital technology context alone ( OECD :2015). They are varied interpretations of digital economy however, Organization for Economic Cooperation and Development best describes the term.

Digital economy has become a vital driver for substantial growth today impacting varied sectors from banking to retail to health and shows no signs of stopping when looking ahead to the future, however, the full potential of the digital economy has yet to be realised as there is much growth to come from technology as the world moves faster and faster towards a digital society, spreading to the poorest parts of the world, opening up new economic opportunities to help push these parts of the world out of poverty, with “two thirds of the population still remain offline” (Brahima Sanou : 2015 ) there still remains gaps but, even as technology becomes more affordable and internet access seems increasingly ubiquitous, a digital divide between rich and poor remains. The digital divide will be an influence and impact on businesses that choose to become digital, as they have to take this into consideration, its bigger influence now than it will be in the future.

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DIGITAL AGE The data world is perennially new and the impact of digital platforms, products and services will go for beyond the information and communications technology sector( Innovate UK : 2015 ). Today technology is driving an evolution of digital business due to the pace of social, mobile, analytics and the cloud enabling business to extend their boundaries and reach a broader array of digital consumers and digital devices at the edge of their networks to create digital ecosystems that are re- shaping entire marketing and changing the way we work and live. A recent study conducted by Accenture, a leading global professional service company, looked at 2,000 businesses across nine countries in 10 different industries found that 62 percent are investing in digital technologies and 35 percent are comprehensively investing in digital as part of their overall business strategy (Accenture : 2014)

In addition, if businesses tap into digital ecosystems this has the potential to bring about change on a global scale, realising ambitions that could transform any single business or industry. The digital economy is highly relevant when exploring technology and its future role within retail as if it continuous to increase will the industries mirror the society it serves and as we are only at the beginning of this digital journey it is sure that radical change will continue to emerge shaping the society we know and tomorrows consumer, which shall then influence how brands and retailers respond, which is either with or without technology.

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Fig 3

todays vs Tomorrows consumer

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WHAT IS cONSUMER BEHAVIOUR? Consumer behaviour has evolved through a number of stages over the past century due to new research approaches being adopted, due to this interpretations may vary, however, the cotemporary definition of consumer behaviour is the study of processes involved when individuals or groups select, use or dispose of products, services, ideas or experiences to satisfy needs and desires (Michael R. Solomon : 2014 ) Consumer behaviour has always been highly important as it provides knowledge to understand how consumers think, feel an act which can then help markets and industries cater effectively to identify and satisfy needs and desires of the consumers. However, most marketers now recognise that consumer behaviour is an ongoing process (Michael R. Solomon: 2014)

cONSUMER BEHAVIOUR IS A PROCESS? According to kantar understanding shoppers used to be simple. They were understood as people who did things in a linear way, progressing in a beeline from awareness through to purchase (Kantar Retail: 2013).

In an interview with author of Inside the Mind of the Shopper , he stated there is a tremendous de-massification of society, which is leading to greater fragmentation of the race, even in the presence of massive homogenizing forces (Interviewee 3, 2016). This fragmentation is due to a number of disruptions and therefore brands have to ensure they stay up to date, as if they don’t they will get left behind in the market place unable to maintain a competitive edge in an increasingly competitive landscape. In addition, Kantar explains the change in shopper behaviour and attitudes has been linked by some to the financial crisis is, in fact, a deeper shift caused by the intersection of changing social attitudes and technology, and reinforced by

the economic environment. Similar changes are seen in both richer markets and emerging markets, even though the latter have been affected less by the aftermath of the financial crisis . To understand consumer behaviour is to know how societies around the world themselves have evolved and the changes that are continuously occurring as they can have significant impacts on consumers, the financial crisis is just one of many that caused changes in consumer behaviour, today technology has also become one of the key disruptions. The result is, technological innovations and a hyper-connected world have significantly influenced consumer behaviors and expectations (Barbara Thau : 2015) as today consumers have said to become the ones calling the shots significantly in the retail industry putting pressure on brands to deliver a seamless shopping experience however they interact with a retailer. The question is how are today’s consumer behaviours shaping the tomorrow consumer and what does this mean for retail.

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CONSUMER THEORIES One of the most fundamental models from consumer behaviour theory relates to the consumer decision making process. The model describes five main stages that consumers go through when purchasing a product starting with recognition of a need, information search, evaluation of alternatives, purchase and post-purchase evaluation. (Michael R. Solomon : 2014) It provides a framework to look closer at disruptions that are impacting the retail industry in particular new technologies and the effect of mobile, digital and social media can be displayed at every stage and the result is in today’s society, these factors influence consumer purchasing choice. In addition, to create a need and strengthen relationships with customers, brands can improve their marketing strategy and effectively respond whilst be present with their consumers at each stage of their buying behaviour through improving their knowledge of the Consumer Buying Decision Process, which in turn will ensure longevity in the retail market.

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In a similar vein, “consumers build brands, not companies”(Susan Guenelius : 2014 ) as they give brands value by developing perceptions and expectations for those brands , whilst companies enhance the value by delivering consistent brand experiences that consumers can trust. Human psychology is the foundation of brand building and Maslow’s Hierarchy of Needs theory identifies the needs and actions of the consumer, helping marketers understand how products are considered in the plans and lives of consumers.

The result is, individuals position in the hierarchy is constantly shifting as its affected by the general environment in which the individual lives, many firms, enabled by new, digital technologies, are making the shift from providing goods and services—physical things—to providing information and connectivity—intangible things (Susan Guenelius: 2014), and we are witnessing today technologies fulfill the belonging, self-esteem and self- actualization needs of individuals. Should retailers be investing in not only intangible assets at the bottom of Maslow’s hierarchy, but also the intangibles at the top.

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EMPOWERED CONSUMER The future perspective starts by reviewing the way in which consumer behaviour has been and will be transformed Forbes states It’s hard to say exactly what has driven the shift from passive to empowered customers -perhaps it is our connected lives, or our abundance of choice, or the ability to get what we want when we want it, where we want it. (Steven Rosenbaum: 2015) Naturally, consumer behaviour evolves to adapt, in this case the horizontal, worldwide structure expansion the internet represents has seen today’s consumer become tech savvy, socially empowered, information rich and lacking time. This has led to empowering them in all areas of life, however, consumers today have become empowered at many retailers expense significantly due to new technologies (Kasper Ditlevsen: 2015), which has allowed for voice of opinions in open and very populated forums like blogs and Facebook, as well as providing consumers with more access and choice in their everyday lives from the brands they choose to the platform they use to shop on.

The empowered consumer is being driven by their own ability to try before you buy, return at will, and click their way to new options and choices. The result is, its retailers who are trying to win over the consumers, it’s not just about the transaction anymore it’s the whole process due to this, it is changing the dynamics of the retail landscape and in addition as technology advances and retailers respond to consumer needs, tomorrows consumers is likely to become even more empowered and demanding in all areas of their lives including retail. The empowered consumer is the key driver of the current changes in the retail industry and will continue to be when looking to the future.

DEMANDING Transparency One thing is clear, the cultural shifts we are witnessing show a move towards the wholehearted and intense as people want all aspects of their lives to be rich and full. “Now, in the hyper-connected and ever evolving world, transparency is the new power” (Barbara Thau :2015 ) as digital innovation and a growing sense of consumer empowerment means we are seeing radical transparency becoming the new norm, as consumers are demanding to know more about where the products they use every day come from, in turn consumers become more highly informed and emotionally attached to brands through creating loyalty and trust. When examining if consumers value emotional connection with brands 81% of respondents survey rated emotional connections as highly important, which supports this view (Appendix 6). In addition authenticity and transparency are the ways in which brands can enhance emotional connections with consumers now and in the future and this can be imported in the retail environment. In turn, Consumers are more socially mindful and pro-community than ever. They are looking for sense of balance, integration and purpose from the products and businesses with which they interact.

This growing culture of consciousness and

sharing is shifting the world (Kasper Ditlevsen: 2015), although it is not something that is highly been demanded in all sectors of the retail industry at this current moment in time, it is likely to become a disruption that retailers will need to adopt in the future, as if brands are not ensuring this transparency they will not be catering to the tomorrows consumer who will value this.

Provenance is a business that provides the tools for transparency within brands, in an interview they stated that today’s consumers are driving the brands to be more authentic rather than the brands driving consumers and it will definitely continue to grow as we as humans become conscious of our part in the world and the real effects of our actions (Appendix 4.1). The result is, new consumer culture means continual reinforcement of the brand’s commitment to its customers’ interests, values and beliefs . When brands can deliver through brand systems being transparent and meaningful, they will win over the consumer.

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cONVENIENCE IS THE NEW POWER In turn, the balance of power is shifting towards the consumer, as they look to find simple, enjoyable and seamless ways to consume any content, anyway and anywhere (Simon Frost : 2012) As consumers are lacking time and the need for convenience is becoming stronger it is paramount in the way consumers are shopping, when examining the key factor important to consumers when shopping 75% responded with convenience and in turn, gave an average rating of 3 out of 5 on how busy they consider their lives to be (Appendix 6). As a result with consumers considering their lives to be busy, convenience becomes an important factor to reduce time constraints and they are becoming accustomed to it, they are wanting this need for access to be anywhere and everywhere and they don’t expect it to stop at one platform. In addition, an observation carried out in four different stores showed the number of click and collect pickups averaged at 81 in just half an hour (Appendix 1.1), this result shows consumers are using multi- channel platforms to provide convenience when shopping, it’s not just one platform that is important to them, it is becoming all of them and its highly important that brands are providing this for tomorrows consumer who will be demanding this inter- connection of platforms. In addition, reshaping retail supports this view as they state ffurnished with so much flexibility, consumers are calling the shots about how, when and where they shop.

Their expectations of ease and convenience are rising – and the retailer must satisfy them (Stefan Niemeier: 2015).

On the other hand, when examining if brands are providing convenience in retail 86% responded yes and in contrast 96% said technology provides convenience to cater for their lifestyle (Appendix 6), as many brands today are providing multiple channels to purchase, as well as, services such as click and collect. The result is, convenience is a key factor that is disrupting retailers as the question they face is are they meeting these expectations of the consumer and if not what impact is this having on their business today and in the future? Consumers demanding convenience has already had huge impacts on the retail industry, with an increase in online sales, online businesses and click and collect services, the question is what does this mean for the future of bricks and mortar, will we continue to see online commerce overtake if consumers continue to shift? In addition, with the rise of the digital consumer and the ever growing importance of convenience it enabled a new type of shopper – Omni channel shopper, where the combination of many research, browsing, purchase and collection methods are used in the entire shopping journey. Retail has had to adapt to embrace the Omni channel age to stay relevant in the changing world.

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LOYALTY BEING CHALLENGED In addition, consumers are growing increasingly savvy in their approach to shopping and have heightened expectations surrounding their shopping experience. (Stefan Niemeier: 2015) On one hand this is due to consumers who are now highly informed and educated and as a result, they are not making planned purchases without doing their homework first, they check consumption either in store, online and are aware of the available selection and the price range, this behaviour has all been enabled by digital technology which in turn is resulting in consumers becoming less loyal to brands. When examining, how loyal consumer consider themselves to be towards brands the average rating was 6 out of 10, this may not be significantly low but it does show that consumers are aware that they are not totally being loyal towards brands but why is this.

The results from both discussions showed loyalty is important to consumers, in addition, they consider themselves as loyal consumers but the result is factors such as choice, convenience and price have got in the way of their loyalty levels today (Appendix 4.1). On the other hand, many argue that loyalty is lost but, millennials for example can be exceptionally loyal customers – provided they feel they’ve been treated right.

According to PWC, retail shifted from product experience to product comparison and increasingly predefined consumers purchasing routines through diversity of formats and price segmenting (PWC : 2015). Is pricing having an influence on consumer loyalty and is it really important to consumers, foremost results did show pricing is an important factor when shopping however, it was more of an important factor for baby boomers (75%) compared to millennials (56%) realistically this does not determine consumer loyalty for millennials other factors play more of an important factor as show above rather than price compared to baby boomers (Appendix 6).

Although this shift towards value has been marked and has resulted in consumer loyalty weakening, is this due to the past economic downfall which put pressure on consumers especially in the UK to control spending. In addition, with the global economy is poised for economic growth, what does this mean for tomorrows consumer, how loyal will they continue to be towards brands if the economy to grows as price comparison may be less of an issue, in turn, other factors will determine loyalty.

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Fig 6

Experience is the new transaction The result is, consumers are moving away from relationships defined by transactions to ones defined by experiences, as the world is no longer about accumulating stuff: it is about accumulating experiences (Angela Rumse: 2015). When examining how important it is for brands to provide experience in retail, 63% responded with a rating of four and 25% gave a rating of five (Appendix 6). The result is ,the attention to experience and personalization is an inevitable reaction to the realities of modern commerce as the shift of online has introduced countless conveniences for both retailers and consumers but, the rigidity of the experience digital or not is a poor imitation of the offline world and not only this, consumers are wanting more of an individual experience as in the digital world there expectations have been raised, Nyla Mabro stated “We're craving recognition of our individuality, and personification and individualization has become a big part of it.” (Jane Bainbridge: 2013) On one hand, initially personalization was all about exclusivity of status but today it became mass customisation and consumers are wanting brands to make them feel special through creating personal experiences.

In addition, results showed that consumers are buying into personalization with 57% of respondents have purchased something personalized, in turn, respondents also gave an average rating of 3 out of 5 on the importance of personalization in retail (Appendix 6), which supports Nyla view. However, experience is not only provided to consumers through personalisation as show by an interview with Not just a label (NJAL) as the brand opened an immersive-experience pavilion with an intermix of art, performance, music, engagement, while also adopting the conventional model of retailing, the result was to drive this consumer engagement as due to being a digital platform they were lacking physical impact which is still very powerful. In addition, providing a more unique offering can help to counteract the customers feelings that they are just seen as a cash cow to be milked. The tomorrow’s consumer is likely to continue driving the ever growing need for experience and NJAL says “personalization, excellent customer service, plus a brand story will become important for the consumer in the future, which all highlight experience elements” (Interviewee 4, 2016).

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consumer adoption The notion of ‘digital immigrants’ and ‘digital natives’ is well-known. Natives grew up in a world of screens and digital devices, with the Web and some connectivity, whereas, immigrants who tend to be older had and still are learning to function in the digital world, however, a new generation of ‘digital dependants’whos lives and behaviours are shaped by the seamless interconnectivity between devices (Kantar Retail : 2013).

In addition, digital immigrants see technology as a parallel track to digital retail, and have relatively rigid association between category and channel but, have not incorporated mobile into their shopping world, whereas, digital natives are integrating technology into their shopping habits both instore and online. As a result, this is based on price, convenience, quality, brand and personal fit, mobile is a tool for comparison, discovery and, increasingly, transactions. On the other hand, digital dependants see technology as integral to all of their interactions and is a big part of their everyday lives, whether in a retail setting or elsewhere. The result is, these generational behaviours around digital technology, hold behavioural differences in regards to shopping that can affect the ability of many retailers to grow and prosper now and in the future.

Even when examing if generations hold behaviour differences, it was clear to see that they were evident, first of all, results showed (Appendix 6) 40-70 year olds (Digital immigrants) gave an average rating of 3 on how central devices play in their everyday lives compared to 16-40 year olds (digital native and digital dependants) who’s average rating was 4, this was an obvious result due to natives and dependants growing up with these devices rather than learning to function in a world with them as digital immigrants have had to do.

In addition, differences continued to arise in regards to the use of technology, the results showed 89% of digital immigrants and dependant use devices to access social media compared to 54% of digital immigrants. As a result, these generational behaviour differences in regards to digital technology hold influence on the way these consumers interact with brands and shop with them, for example, digital natives and dependants, are likely to engage with brands via social media which can influence their purchases. In addition, these difference will also impact on the attitudes of these generations and influence retailers strategies. When examining 83% of digital immigrants and dependants said it is important it is to interact with brands via technology compared to 54% of digital immigrants and in addition, 75% of digital immigrants and dependants would like retail to incorporate more technology compared to 50% of digital immigrants. On one hand, as digital natives and dependants are accepting towards the use of technology than immigrants, how can retailers ensure that they are not catering to only one generation and if they are what impact will this have. Although, it is argued that the culture of consumer behaviour and adoption means it’s much less about the technology and more about psychology and economics, which is the importance of retailers understanding consumer theories comes in. (Herb Sorensen : 2009)

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towards a new retailing paradigm

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where retail began Every social and commercial development, discovery and invention, both incremental and revolutionary, historical and contemporary has contributed to this evolutionary process of retail, for shopping simply reflects us, as we would be – from caveman to internet consumer.(David Roth : 2013) In addition, it is important to understand how retail has evolved in order to imagine its future, the history of retail is one that mirrors the society it serves and as a result, to know retailing is to understand how societies around the world themselves have evolved. On one hand, over the last 150 years changes in the shopping landscape have been highly transformative, however, retailing goes all the way back to five time periods starting at pre –history cave men. From the beginning, during the evolution of mankind, us humans have been genetically engineered and hardwired to find and acquire, the evolvement from hunting to gathering for needs to wants became a model which the result is it remains a template for men and women shopping today and played a vital role in the facilitation of commerce.

In addition, the move from produce surplus for sale or exchange in the Neolithic Period generated an infrastructure of supply chains and globalization had begun (David Roth: 2013), resulting in, greater diversity of goods became widely available and tradeable and lead to the introduction of money, leading the third retail era which evolved as the oxygen of the entire retail experience.As a result, the retail landscaped was transformed forever as industrialization brought inexpensive, mass produced commodes and products, previously unavailable to a majority, this distribution required a new retail approach, such as, department stores and the replacements of market traders to shopkeepers(David Roth : 2013) – trust and brand identity had been born. From department store to supermarket to shopping Centre and hypermarket defines the modern shopping experience. However, now online and digital shopping enabled by the internet is changing the retail landscape and the result is, in years to will the retail landscape of continued to dramatically change and in addition re- write the history of retail for good, as clear disruptions are occurring.

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Distruption 1 - The changing role of the store

Is the purchase journey still still centered on the store?

The retail industry is becoming more complex and changing at an ever-increasing speed, there are disruption facing every retailer, regardless of where they operate starting at the changing role of the store.

The key debate currently evolving is the importance of the physical store as it is said to be diminishing due to more consumers researching and buying online. The retail industry used to be simple, there was a dominance as the only way you could purchase was in store, retailers would dictate open and closing times, what they sold, how they sold it and much more (Phillip Tueffel : 2015), however, change has been enabled by technology, resulting in, consumers can now spend money quicker, easily and on more platforms than ever before. In addition, shoppers are using a blend of online, mobile and in store shopping for their convenience, resulting in, the physical store having a tough time as it’s continuously trying to compete. When examining, the reasons why consumers are choosing not to shop instore, it was due to choice and variety of consumer apparel being limited in store compared to online, as well as not being as convenient for consumers with their busy lifestyles.

In addition, both millennials and baby boomers gave an average rating of 6 to how they rate their experience of instore shopping. In addition, the UK holds the most frequent users of online shoppers in Europe contributing to 5.2% of all retail sales and the average UK consumers spent ÂŁ1,174 online in 2015 (David Moth : 2015), so why is online becoming so attractive than the physical store. The result is, the shopping needs of consumers are not being met by retailers, which is leading to uncertainty and negative perceptions of the physical store current role. In addition, when examining surprisingly results showed 56% respondents chose online as the platform they are most likely to use in the future, compared to 44% who chose the physical store (Appendix 6).

Challenges facing the physical store?

On the other hand, there does hold challenges for the physical store as Omni channel operations and e-commerce, have technologically enabled and empowered consumers as they simply don’t need to browse as much at the store. The result of this is loss of foot traffic, meaning fewer opportunities for impulse buys, resulting in retailers left with stores that are not delivering financially, so what remains is how can retailers make the stores more intuitive and attractive, as well as, help consumers reduce the scope of their search and simplify their shopping experience, the question retailers face is technology the answer.

People have rushed to anticipate the “end� of one era and the dawn of another, more technologically enlightened one.

When examining consumer shopping behaviour, in particular where consumers prefer to shop, the results showed equal response of 50% (Appendix 6.1), in turn both platforms are key for consumers whilst shopping, so this does not necessarily support the view that people are moving away from in store to offline. In addition, when examine who is driving online shopping, results showed 71% of millennials shop online compared to 50% of baby boomers, although as millennials or so called digital natives are early adopters of technology this was not a surprising result, however as baby boomers or so called digital immigrants continue the future.

The Internet has firmly established itself as a sales channel and has changed the commercial landscape dramatically, it is a global rival for every single bricks and mortar store, with ecommerce accounting for or $1.316 trillion (5.9%) of the total retail market worldwide in 2014 and with predictions of the share increasing to $2.5 trillion (8.8%) by 2018 (Emarketer :2014) and with connectivity on an unimaginable scale, there is no doubt why online is a competition but the key question is who is driving online commerce.

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However, shopping online has its downfalls which is interaction and providing experience, as consumers move further away from relationships with retailers defined by transactions to those that are instead defined by experiences, how retailers can make it work for them across all touchpoints particularly online. A global study released by IBM found 43% of 115,000 consumers polled in 19 countries like to shop online. On the other hand, just 29% had made their last purchase via the internet (WGSN : 2015), signifying the rich digital experiences consumers have online are not being met by the digital commerce offer, which is why the physical store is still important to consumers today.

In addition, a discussion conducted with millennials showed they feel online is lacking experience, one respondent said “In store is all about the retail experience, customer service, the engagement and human interaction, where as there is no emotional connection online and this is really important. (Interviewee Focus group 1 : 2016)

In addition, one of the biggest downsides to shopping online in todays connected age is instant gratification, online is just not fast enough compared to getting a product immediately upon purchase in store. When examining why respondents chose to shop

instore for apparel rather than online 52% respondents responded “to get the product immediately.”

In turn, although online platforms offer next day delivery it doesn’t compensate for instant gratification, which is a key consumer demand, so due this, the physical store will always be essential.

Although, online shopping is growing, who is to say that the physical store is diminishing as in (Appendix 6.2) PwC’s Annual Global survey showed the physical store remains the primary retail touch point for consumers in 2015. In a similar vein, when examining results showed, 88% of consumer prefer to purchase from a retailer with a physical store compared to 13% with an online only merchant (Appendix 6.1). In turn, the physical store still continues to be the most popular platform due to 63% of the sample saying they feel highly engaged with brands instore compared to 25% who said they feel highly engaged online (Appendix 6.1). This result was due to “interactions and sensory experiences” are key features that drive consumers to continuously come back to the physical store as online does not currently provide this feature, in turn this shift from consumers demanding experience is clear to see, however, with both online and the physical store equally having their benefits and limitations by working together, could they provide this seamless shopping experience for tomorrows consumer and keep both the online and physical store pertinent in the future.

Fig 10

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Distruption 2- Mobile and New technologies

mobile shopping Over the past few years, the way we communicate has been revolutionized by advances in mobile technology, and the ubiquity of smartphones and other devices.

The way we shop has also changed forever, as retailers embrace new ways to optimize their products, and shoppers use these tools to research, compare and purchase goods. As a result today mobile isn’t just a technology, mobile is a human behaviour. In addition, statistics show the world checks its mobile phones more than 100 billion times every single day and in turn, 91% of people sleeping within arm’s reach of their mobile device.(Tracey Follows : 2015 ) As a result, it’s clear to see that mobile is not just another screen but, is a powerful tool for retailers to use to stay connected with consumers and that’s just what retailers are doing but are consumers using mobile as a tool for shopping? When examining if consumers use their mobile to make purchases, results showed 47% of respondents had used a mobile phone or smart phone to make a purchase, however, in contrast only 22% said it was their main tool for purchasing products online, in turn this is particularly low considering how attached and essential mobile phones are to consumers, as a result, clearly mobile purchasing is not the right commerce channel for consumers or the full potential of mobile commerce is still yet to hit the retail landscape.

Fig 11

On the other hand the smartphone is more of an instrument for getting to the point of buying, rather than a tool for the a ctual purchase as it provides robust and multifaceted medium of pre – payment consumer activity, such as comparing prices or locating stores, a global study released by PWC found tthirty percent of their respondents have located stores, and a quarter have used coupons they received by mobile phone.

(PWC: 2015). Over the course of a few years, mobile has allowed consumers to fully research for and be updated on a retailers range of products, according to a recent Deloitte report, digital technology influenced 33% of in store retail sales in the UK, equivalent to almost ÂŁ100bn in 2014.

(Deloitte : 2015) In turn, the smartphone has become a permeant connection between the retailer and consumer, that builds engagement and in turn loyalty, which is what brands are striving for today and future to make them stand out in a crowded market. Iin addition retailers realize that that they can no longer operate from within silos, and the convergence of digital and physical commerce is now a retail imperative (WARC : 2015), as integration is key in today’s world for consumer who want a seamless shopping experience, retailers are missing the opportunities to reach its consumers via mobile device in store, in which they can incorporate features such as personalization, to give consumers a sense of individuality, whilst engaging and creating loyalty.

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challenges for mobile In addition, mobile faces a few challenges one being demographics difference in terms of digital behaviours and digital adoption, as when examining if consumers use mobile apps in stores results showed 50% of millennials responded yes compared to only 5% of baby boomers, in turn, when examining if consumers use mobile pay in store, 36% millennials use it compared to 14% of baby boomers. As millennials have grown up with technology they attitudes are highly different to baby boomers and this demonstrated through their use of technology, so this is one challenge retailers face, as using technology could lead to them missing out on appealing to both demographics.

However, the challenge for mobile does not stop there, the technological reality at most retailers has not caught up to the promise of location-based offers and coupons that mobile offers and when it comes to consumer confidence, the mobile phone still has a long way to go. In turn, while data is set to double in the next seven years, privacy and halting brand invasiveness is going to be key to consumers (LSN : 2015), the question is should brands and retailers invest in mobile experiences throughout the path to purchase and beyond and will consumers strive to ensure privacy and invasiveness from retailers.

Fig 12

new technologies Even though we are at the very beginning of this mobile megatrend that will fundamentally continue to reshape retail, it is clear to see how this impact could manifest itself. In addition, technology is emerging in defensive applications and in early proof of concept initiatives that take device experiences a step farther. (Stefan Niemeyer: 2015) Retailers are experimenting with new technologies, an example includes augmented reality technology which has the potential to add value for the customer and could potentially reduce the limitations of retailing without physical stores. This is ultimately redefine the way in which goods are presented to consumers. The result is, digital is a disruptive factor changing the business model, how we think about the intersection of physical and digital, and how retailers compete.( Accenture : 2014)

In turn, It is argued that much of the retail disruption at this point is first generation technology, which is mainly internet based technologies and there is a second generation of technologies, which is not affecting retail to a great degree yet, but will have a lot more impact in the years ahead that will servery blur the lines between online and traditional retailing by providing a more joined up approach than previously seen, as well as foster deeper and more loyal relationship with new and existing consumers. In an interview with the CO founder of Skignz, a new technology platform based upon Geo Location based Augmented Reality, stated “Technology is key to the future of retail . As the shopper becomes more sophisticated, then the retails need to respond that by providing information on products that's relevant to the purchaser.�(Interviewee 1: 42

Distruption 3 - The proliferation of social media Reshaping retail best describes the term social media which refers to any online channel that is available to an extended audience, builds upon and relates to other content, whilst enabling users to become producers of the content. (Stefan Niemeier: 2015) In turn, digital technology has created a global shift of human communication through the disruptions of mobility, social media, cloud, big data and analytics. The result is, social media may be the most obvious disruption that has changed the way society communicates but, it does not make it less disruptive. However, it has led to assumptions that social media platforms must be highly powerful vehicles for shopping, or at least for communication between retailers and consumers.

Social networks such as Facebook and YouTube exceeded a billion monthly active users, these platforms have completely redefined the way we build and maintain relationship but, outlining how it has redefined society today would be endless, however, these platforms have their benefits, as have become a direct marketing tool for retailers to connect with their consumers and these consumers are demanding it. When examining, how influential social media in on consumer purchasing behavior, 62% of consumers gave an average rating of 7 out of 10 and in a global survey release by PWC, when asked if their interactions on social media had led them to buy more, a total of 62% of their respondents answered yes (PWC : 2015).

As a result, it’s opening new doors for retailers to engage and be new brands to someone and those discoveries drive businesses in the form of increase

brand awareness and loyalty, however, the real point is that enthuasim for social media is driving consumers to engage, comment and even effect change at retailer and brands.

According to pwc global study, 2015 has seen an increase in social media engagement from previous studies, with results showing, around a third, 34% of consumers followed their favourite brands or retailers on social media.

In addition, more than a quarter found brands they didn’t know or in which they’d developed an interest or researched a brand using others’ feedback. (PWC :2015)The result is, retailers are seeing social media as a powerful tool and are developing new ways to help consumer buy products directly from their social accounts as they think a socially led future is the future of e- commerce. According to Sarah Watson, vice-president of social commerce at Net-a-Porter, What social networks have is the audience and they’ve built the community, and what retailers have is the e-commerce infrastructure. We’re coming at it from the other angle – we already have the e-commerce infrastructure and we’re just building the social layer on the top.( Katie Mcquater : 2015).

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conclusion

Overall, the research shows the retail environment is being disrupted by technology, from the platform channel to consumer shopping behaviour. In addition, the following key insights , which the research highlighted should be taken into consideration in order to make recommendations for the future of retail and technology role in regards to this.

Key Insights?

1.Consumers have shifted from passive to empowered, from relationships denied by transactions to ones defined by experiences and craving recognition of their individuality.

2.Demographic attitudes and behaviors in regards to technology pose differences on how retailers look at their future strategies.

3.Technological innovations and a hyper-connected world have significantly influenced consumer behaviors and expectations, due to this retailers either change or become obsolete.

4.Retail is making the transition from transaction based to relationship based value creation, in turn, Consumers are promising personalization, experience and transparency as the key factor for brands to secure their loyalty in the future.

5.Configurations are changing, retail stores are becoming an experiential venue for both online and non-online purchase, in turn it’s become a place to buy, stimulate, and a place to create new possibilities in the eyes of the shopper.

6.The focus for retailers cannot just be on one channel, online or offline, it’s about how they can use these to work together to create a seamless shopping experience for the consumer, whilst keeping both channel pertinent in the future.

7.Mobile shows the opportunity to converge digital and physical commerce to respond to the ever growing sophisticated shopper.

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Recommendations In response to the key insights, recommendations have been made in order to enhance retail environments, taking into consideration todays evolving consumer shopping behaviour and technology driven society.

Recommendation 1 Father research will be carried out, to look at how online and offline commerce can work together to respond to the ever growing sophisticated shopper through the use of technology.

As tomorrows consumers will be increasingly proactive in their purchase decision and loyalty not at its highest due to the rise of Omni channel shoppers, where the combination of many research, browsing, purchase and collection methods are used in the entire shopping journey, retailers need to think less about individual channels and more about how they fit together, as well as, the overall consumer journey, as focusing on driving consumers to buy on each channel may not be the case as the identities of online and offline are not become separate anymore. In addition, with consumers equally using both platforms to provide a seamless shopping experience, by working together, It would keep both the online and physical store pertinent in the future.

Recommendation 2 In addition, father research will be carried out, looking at how the retail environment can be enhanced, making them less about consumer transactions and incorporating a higher emphasis on the consumer journey focusing on personalization and experience.

The evolving consumer in the near future will pose difficulties in order for retailers to understand or master, as consumers have shifted from passive to empowered, from relationships denied by transactions to ones defined by experiences and craving recognition of their individuality, there will be a heightened emphasis on retailers to evolve their environments to cater to this, as in turn, continual reinforcement of the brand’s commitment to its customers’ interests, values and beliefs, will foster deeper and more loyal relationships with new and existing consumers.

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To conclude....

To conclude, overall the report has outlined that technology has become a key disruption shaping consumer behaviour in regards to retail, which in turn is playing a huge part in how the retail environment is evolving today and how it will be shaped in the future.

Firstly, consumers are no longer simple to understand, they are the ones that are calling the shots significantly in the retail industry, putting pressure on brands to deliver a seamless shopping experience, however they interact with a retailer.

The rise in technology has enabled consumers to be more empowered than ever before, resulting in consumers demanding retailers to provide experience rather than just transactions, as the rise in online shopping has led to consumers moving further away from interactions and experiences, which is something that is highly important to consumer today, as they are wanting all areas of their lives to be rich and full including when shopping. In addition, consumers are wanting recognition for their individuality from retailers and it can clearly be seen that when looking to the future of retail this will be a key feature that will need to be provided.

When looking to the future, brands are going to be thinking of new ways in order to gain loyalty from the consumers as with technology enabled the Omni channel shopper, where the combination of many research, browsing, purchase and collection methods are used in the entire shopping journey.

Retail has had to adapt to embrace the Omni channel age to stay relevant in the changing world.

Secondly, the retail environment is being disrupted in more ways than one way, as the focus for retailers has initially been on just one channel, however, with research showing neither of the channels are out performing each other but instead are both being used equally by consumers, retailers cannot just focus on one channel anymore as if they do they will become obsolete. In turn, when looking to the future these channels must work together to create a seamless shopping experience.

The future of retail presents challenges, however, new technologies show opportunities for retailer to foster deeper and more loyal relationships with new and existing consumers. By embracing these tool, retailers will be able to turn consumers into product and brand advocates. However, due to technology generational behavioural differences are occurring in regards to shopping as well as attitudes towards technology in the retail landscape, this will be an issue for retailers when looking to moving towards a digital retail environment as in turn they may dismiss a demographic. In addition retailers must take into consideration the feasibility of using technology in their future retail plans, as moving forwards does the world have enough resources to sustain this use and what impacts will they be having on the environment. As well as this they must take into account social aspects as should consumers be moving towards their lives becoming even more permanently immersed in their digital lives.

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Illustrations Fig 1- Future of retail illustration, Fashinvest, Available at URL: http://www.fashinvest.com/adding-digital-consumer-experience/ (Accessed 24.01.2016) Fig 2 – Digital world, Voiceofisrael, Availabe at: http://www.voiceofisrael.com/digital-and-other-forms-of-information-sharing/?t=32 (Accessed 24.01.2016) Fig 3- Consumers, 1gst, Available at: http://www.1gst.com.my/get-ready-gst/gst-for-consumers.html (Accessed 24.01.2016) Fig 4- Maslows hierachy of needs, Wikipedia, Available at : https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs (Accessed 24.01.2016) Fig 5 – Consumer loyalty, Loyalty prime, Available at: http://www.loyaltyprime.com/blog/ (Accessed 24.01.2016) Fig 6 – Burberry flagship store, Vogue, Available at: http://www.vogue.co.uk/news/2012/09/13/burberry-regent-street-flagship-opens ((Accessed 24.01.2016) Fig 7- Consumer icon, sales, Available at: https://salesdatalist.com/realtors/ (Accessed 24.01.2016) Fig 8 – Digital technology in retail, TMI, Available at : Accessed 24.01.2016) http://www.tmi.co.uk/reading-room/tmi-talk/digital-technology-in-retail-stores-to-help-create-great-in-store-experiences Fig 9 – Evolution of retail, blogs, Available at: http://blogs.csc.com/2015/09/21/the-evolution-of-retail/ Accessed 24.01.2016) Fig 10 – Shopping online, Klarity, Available at: http://www.klarity-analytics.com/349-a-better-online-shopping-experience.html Accessed 24.01.2016) Fig 11 – Mobile shopping, icon, Available at: http://www.iconarchive.com/tag/mobile (Accessed 24.01.2016) Fig 12 – Mobile phone app, Guardian, Available at: http://www.theguardian.com/media-network/2015/jun/25/walk-down-high-street-future-advertising Accessed 24.01.2016)

PROJECT DECLARATION This submission is the result of my own work. All help and advice other than that received from tutors has been acknowledged and primary and secondary sources of information have been properly attributed.

Should this statement prove to be untrue, I recongnice the right and duty of the board of examiners to recommend what actions should be taken in line with the Universities regulartions on assessment contained in its handbook.

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Date………………

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