Part Six: Collaboration and its Role in the Future of Retail

Modern Consumers Demand More  

There has never been as much choice as today; the e-commerce world has ballooned, meaning there are seemingly endless options at the click of a button. The pandemic has only accelerated this trend, and, as a result, some of the best-known brands globally have seen a considerable peak in sales. For example, in September 2021, Boohoo reported a record >£976 million in sales over the previous six months.

Competition is tough, so retailers must ensure they meet consumers' current needs and even the future needs they don't yet know they want. Additionally, modern customers are increasingly concerned with the environment and sustainability. Developing an offering covering all these bases is taxing retailers' resources, particularly for less established brands. Consequently, retailers are turning to partnerships more than ever before to resolve these challenges.

Collaboration is the Key

There are multiple benefits to partnerships that can help us manage the biggest challenges set to hit retail in the coming years: 

Recruitment, Floor Space, and Infrastructure

One challenge that every organization is up against is finding enough skilled people to facilitate the number of roles available. For example, it has been commonplace for some companies to partner with department stores or other retailers by utilizing their store space to sell products. This means that existing staff are upskilled to support customers' queries for partners.

Another way to tackle recruitment challenges is to partner with an outsourcing organisation like The DDC Group. Slight sales puns aside, outsourcing has been a huge supplier of customer services for many years, giving brands strategic insight and access to a skilled workforce, all without the pains of resources and intricacies of contact center management.

Back to physical retail space, despite high street struggles, we still see mega supermarkets appear on what sometimes feels like a weekly basis. Interestingly, though, we are witnessing the collaboration of brands sharing floorspace (or what is known as brick-and-mortar benefits) and, in turn, footfall, infrastructure, and setup costs. Take Asda and Greggs, for example, which became the first supermarket to open the bakery goods counters within its own stores. Undoubtedly, we'll see more and more of this in the coming years.

Technology

The challenges of keeping up with the fluid world of technology are plain to see. The sheer cost of reimagining your tech offering every few years is enough to scare even the most established organizations – the cost of not investing is even scarier. So, to help share this burden, we see a rise in collaborations:   

Take Virgin Media and O2 – a broadband and mobile giant working together to offer customers the ultimate bundle. Rather than competing and investing huge sums to do so, their offering has sent ripples through the telecoms market.   

Taking a more physical view of how technology partnerships can work, we shift our gaze to the US, where Walmart and Verizon have joined forces. The 5G rollout is well underway, and what would be a costly release for Walmart in its superstores is instead handled by its mobile partner, who benefits from more users and exposure thanks to Walmart's customer base; a win-win.

Brand building for specific demographics

We have all become increasingly more aware of our actions' impact on the planet. For some brands, attaining a green image is vast and costly, yet there is hope in collaboration.  

Roll back the years, Body Shop was making waves in the cosmetics industry. By highlighting how ethical they were, they, in turn, were displaying how lacking some cosmetic firms were with their practices (at least in the eyes of the customers). Impressed by their work, L'Oréal bought Body Shop in a huge deal, showing a massive investment in ethical cosmetics and gaining an existing customer base and chain of stores. Natura have of course since purchased the Body Shop brand from L'Oréal.

Ok, maybe a buyout isn't the best example of collaboration. But, as 'environment' and 'sustainability' continue to gain airtime in boardrooms up and down the land, we see new articles every day highlighting the latest projects and partnerships.

Take Tony's Chocolate – their passion for improving the supply chain in the cocoa industry is inspiring. Aldi, possibly the UK's biggest disrupter in the supermarket game, has partnered with them by first joining Tony's Open Chain, which facilitates their supply chain’s goal. This was then followed by launching a chocolate bar partnership with them, the first in the UK.

So, if you want to increase your green credentials and appeal to conscious customers, ask yourself, who can I partner with?

In a post-Covid world (still uncertain even today), things will continue to change quickly and remain challenging, and handling this as a retailer, regardless of size, will be testing. Therefore, partnerships are more appealing than ever.