The Consumer-led Revolution

How social and mobile media are shaking up retail.

It’s interesting how phrases from the pioneering days of the retail industry have stayed with us. Well over a century ago, Marshall Field said: “Right or wrong, the customer is always right.” R.H. Macy added: “Be everywhere. Do everything. And never fail to astonish the customer.”

Neither could we have known how literally those statements apply today, how powerfully they have been enabled by a revolution in technology, or how fundamentally they are changing the face of retail around the world.

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 We’re hearing a lot of references today to “the new consumer.” Actually, they’re not new at all – just newly empowered.

We’re hearing a lot of references today to “the new consumer.” Actually, they’re not new at all – just newly empowered. We all have a need for control in our lives. We all want the ability to make choices. But for most of retail’s history, control was in the hands of the seller; and choice was whatever the seller chose to offer.

Technology – as it has in virtually every part of our lives – changed all that. Power has shifted from the center to the edge. Consumers are now fully in control of the brand conversation. Brand love or disappointment is part of free-flowing digital discussion far beyond the reach of an industry built on carefully crafted messages.

In a very literal sense, consumers have become co-creators of products. In what economists are calling “the recommendation economy,” they have the means to vote thumbs up or down on any offering.

They also have the motive – particularly at the younger end of the demographics. A 2013 Boston Consulting Group study, for example, shows that Millennials – who control $1.3 trillion in direct annual spending – are involved far more deeply and personally with brands than older generations. Social and mobile media amplifies that involvement for a generation that grew up learning digital technology the way those before them learned their ABCs.

So what do these newly empowered, highly opinionated consumers want? Actually, a more relevant question in an age of personal entitlement: what do they demand?

It’s one of the most aggressively researched issues in business. UPS’s search for consumer enlightenment has given us an increasingly detailed look into the mind of the consumer. A few of the headlines:

First, online shopping is not replacing in-store shopping. It is adding new dimensions. Consumers are flex-shoppers who don’t care about the difference between physical space and cyberspace. They want retailers to be there where, how and when they choose to shop. And they want it all connected to create a seamless experience.

They want loads of information about products and delivery – both online and in-store, where they expect to access it while they’re shopping.

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In a very literal sense, consumers have become co-creators of products.

They are patient, but frugal. They are willing to trade a few days of extra delivery time for free shipping. They also want returns to be no-charge and hassle-free.

There was a time for businesses like ours when the priority was getting goods from seller to buyer. Today, accuracy and flexibility of delivery and returns are key to the whole brand experience for consumers.

We’re appealing to customers by helping enable the omnichannel options that their consumers expect – creating shipping that allows shoppers to move easily from online to bricks and mortar and back again, making the choices and creating combinations that fit their needs.

We’re engaging with consumers through new technology and new systems. For example, our new UPS My Choice service gives consumers control of the time and place of delivery from an app on their smartphone – making changes in delivery to align with changes in their day. We already have 10 million users.

We’re also expanding a system known as the UPS Access Point Network that allows consumers to direct their packages to more convenient pick-up locations, such as a neighborhood retail establishment. They can also drop off returns at the same place.

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Stores likely will evolve into places where consumers can experience the goods, then order them on-line.

The changing face of retail is far from complete. We spend a considerable amount of time peering to the industry’s future. And we’re starting to see some outlines.

To start, it’s far too early to say that online retail will inevitably do to bricks and mortar what cell phones did to payphones. Some 90 percent of purchases still happen inside stores. Shoppers will continue to like to walk the aisles and touch the goods.

The size of stores, however, is likely to shrink – with physical space becoming more an embodiment of brands than an aggregator of selections. Stores likely will evolve into places where consumers can experience the goods, then order them on-line. Interestingly, we expect a return to the days when pioneers like Field and Macy saw the opportunity in changing shopping from a chore to an experience.

Like most things in an age of transformation, we won’t know the future until we get there. But from product creator to the manufacturer to the marketer to the seller to the company that brings it to your door, we do know this: It’s the consumer’s world. We all just work here. goldbrown2

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David Abney serves as Chairman and Chief Executive Officer at UPS. Click the icon above to follow him on LinkedIn.

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Reprinted with permission of Longitudes, the UPS blog devoted to the trends shaping the global economy.