2015 Predictions: What Will Shake Up the Consumer Goods and Retail Industry?

1/6/2015
As another year has come to a close, we in the consumer goods and retail industry not only review the past 12 months to reflect on changes we've seen but also look ahead to prepare for changes yet to come. Planning ahead has been a growing challenge due to the changing consumer landscape. The rise of mobile and social technologies has given consumers access to more information and a new set of influencers. While this creates a need for retailers and brands to keep up, it also affords unprecedented access and insight into rapidly changing consumer tastes, behaviors and trends. 

So how can we take advantage of this changing consumer landscape, one that's ripe with opportunity and calls for innovation?  We need to examine the technology that acts as the catalyst for these changes and how it will enhance not only the design and development processes but also the customer experience.

Focus on platforms for product innovation
One such change will be a movement from the classic concept of product lifecycle management to a focus on a product innovation platform. Retailers are in a state of constant innovation and change, having to come up with new ideas while receiving feedback from customers on existing products. In order for retailers to quickly adjust within this rapidly changing environment, they need to know where everything is in that cycle and how to maximize sales and development, rather than just manage the details of bringing something through its lifecycle.

But what do we mean by this? Imagine you're a retailer selling cashmere sweaters, but this autumn is unusually warm and you won't be able to sell as many of those sweaters as planned. So what are your options?  If there are back-up orders already on the way, you may have to accept higher markdowns, but what if you had better visibility into the status of the goods in process? What could you change?  Are there other styles in the same material planned? Can you alter the design and make it a short-sleeved garment that might sell longer into the season at full price?

Combine that knowledge with information on what is selling, along with possible social and sentiment analysis from your customer base, and you might have several options.  When retailers have this end-to-end view of their business, as well as an ability to drill down into the product details of a given collection, they can make more informed decisions that better impact their bottom lines.
Alignment of best practices

Not only will we see a shift in how the entire cycle is managed but also in how the individual sides of the business actually bring goods to market, specifically an increased alignment of best practices between fashion and durable goods.

To date, the durable goods industry has focused more on designing and engineering individual products, using computer-aided designs to visualize and test new concepts, and then getting them into the production cycle. In fashion, it's been more about bringing whole collections to market, and having their pieces work together and change over quickly.

But fashion is becoming increasingly interested in the power of 3D - how visualization and simulation can bring efficiency to the development process without sacrificing the integrity of a design. Meanwhile, durable goods are starting to develop products that work together, such as a bicycle retailer that also sells apparel, gear and accessories to go with it. With each taking best practices from the other, we'll start to see a more seamless and efficient delivery of goods throughout the entire industry.

This has several benefits to designers, engineers and consumers alike.  It expands the boundaries of creativity, enabling designers and product engineers to put the consumer at the heart of their design process. They can design and visualize their product in the context of its user – how do the bike, apparel and gear perform in different conditions? What does it look like in the context of the store? It allows designers and product engineers to better design for purpose and cost, to virtually sample and simulate different options, and to communicate more clearly to their supply chain partners so that the physical samples are right the first time, improving overall production quality and shortening delivery times. 

Social engagement
Social innovation will also have a greater impact on how products are conceived and brought to market by allowing consumers to play a larger role in the process from start to finish.

Consumers want to have a voice, and today they have more channels than ever before through which they can provide their input. In opening these channels, retailers and brands are offering consumers ways to actually have a hand in configuring their products. For example, one eyewear company is using a 3D technology platform's social capabilities to have a direct connection with its store.  Store managers are able to share customer feedback on the latest collections directly with design teams, enabling them to react quickly and incorporate that feedback into new products. In doing so, brands can develop more connected relationships with consumers, encouraging greater loyalty in the process.

A further look ahead
But as we look forward even beyond 2015, we'll start to see real change in what we understand a retail environment to be. As online, mobile and social commerce increase in speed and depth, what does that do to the store? Retail as a "showroom" is an evolving concept; consumers still want to go somewhere, often with friends, to touch physical products, try them on, and maybe even have a relationship with a personal shopper. But shoppers will expect to be able to personalize that experience even further, by configuring something to order in a specific color, size or fit, and then have it personally delivered.

We've already begun to see this concept take shape but in much more limited ways. Think back to a time when you used to buy a car from the available inventory on the lot.  Today, you might go to a showroom for a test drive but then configure your perfect car from hundreds of variables and order it through the dealer or online. Extend that to apparel. 

Today, custom clothing certainly exists, but it's generally a long and specialized process.  Imagine going to a store to try on a special occasion dress for size and general styling.  You could then be offered a range of materials, select one, and see the dress rendered in 3D on your own 3D avatar.  You could see the effect of a longer sleeve, a shorter hemline, or a different beaded trim from a range of available and pre-configured options. 

The underlying components would have enough intelligence to know which configurations can work together and give you an updated cost as well as rendering the effect right on "you." And because this is not fully custom, but working from existing patterns and pre-approved combinations, the speed of delivery can be quite efficient.

Of course there will always be products you want right now, and that won't disappear.  But the concept of balancing instant gratification with fast personalization changes our concept of inventory, and it changes our concept of the retail space. New technologies will not only begin to shift the design, development and display of consumer goods, but they will also change the way consumers perceive themselves within this development process.  Retailers and brands will have a more direct understanding of what the consumer wants and an ability to deliver on that knowledge with unparalleled efficiency. What consumers will experience as a result is a more personalized, engaged shopping experience powered by virtual technology.  


Susan Olivier is vice president for Consumer Goods - Retail for Dassault SystÈmes.

X
This ad will auto-close in 10 seconds