In today's retail landscape, change is the only constant. Consumer behaviour is frequently evolving, and retailers must continually adapt to stay ahead of the curve. Lindsey Mazza, Global Retail Leader at Capgemini, knows a thing or two about the retail industry. She's been working in the field for over 20 years and has seen firsthand how the landscape has changed over time.
Mazza recently launched Capgemini's 2nd annual Consumer Trends report at NRF. The report explores evolving consumer behaviour within the retail industry. We sat down with Mazza to get her insights on the current state of the industry and where it's headed, and her insights were both valuable and fascinating.
Pritchard: How do you think we can advance the retail sector?
Mazza: We are in a time of unprecedented changes. We have a lot of disruption happening in the market, whether it's labour shortages, economic crises, geopolitical crises, or energy transitions. There are many areas where it would be easy just to say it’s going to be too challenging for us.
We also have older and newer companies that are trying to make a difference in the world. That are trying to make sustainability affordable. They are trying to bring new channels to consumers. What I love about this is we can make transformational changes now that can take costs out so that we can do those good things for consumers and the planet so they can have better experiences.
Pritchard: How has the world of retail changed in the past five years, and what will happen in the next 5-10 years?
Mazza: I think the expectation of more immediacy is the biggest transformation we are seeing, especially when it comes to food and household essentials. What we are seeing is a decline in the amount of time that consumers are willing to wait to have a product fulfilled. The expectation of the immediacy of delivery continues to shrink to next day etc. I think this means the margin is eroded as it costs more to deliver a product that quickly.
Over the past five years, we’ve seen this shrink, but over the next five years, we are going to see more and more last-mile fulfilment. We are going to see more automation, AI and productive use of labour to support both employee advocacy but also consumer immediacy and convenience.
Over the next 10 years, I think we are going to see that focus more on purpose-driven, sustainable options.
Pritchard: What are the most critical changes we need to make to prepare for the future?
Mazza: One thing that we think about in the retail business right now is margin erosion from both sides. I think the way we are going to succeed in that and do the right thing for the Earth is by thinking about the whole ecosystem.
Creating intelligent ecosystems that move from supplier to CPG to retailer to consumer and back again. The whole ecosystem is important, whether it's the supply chain, data, or materials. Every single one of these ecosystems being able to support one another and be able to use their information for the betterment of the world is the future of retail.
Pritchard: What do you think is the most interesting trend for 2023?
Mazza: I think the biggest trend we will see is that it's a cost-out year. We’ve talked about cost out in the past. We often talk about it with how you can do things that were temporary fixes that took cost out of the business. I think these are going to be permanent resolutions where we create transformation.
We’ve figured out how to change the way we do business. Change the way we operate our supply chain. Adjust the way we use labour. Adjust the way we include automation in part of our business process. Change the way store footprints are allocated. These things will be transformative operational strategies that allow us to reduce our costs, create more margin and reinvest those into things like sustainability.
Pritchard: What are some of the ways people in the industry are making changes in the world?
Mazza: I’m really proud of the retail industry right now. What I like to see is a thing called ‘Circular Economy’. People often talk about it with fashion. I’m very proud of fashion retailers for leading the charge in this one.
We are now seeing this move into household essentials, and I’m even more excited about what that means for everyday plastics that we use and the containers and packaging that we throw away. So, I’m looking forward to what that means in terms of making those circular and to be able to educate the consumer, actually back to a time before we had single-use plastics, and how we can make those products more circular.
At Agile Retail, we believe in the value of listening to industry leaders and gaining insights into how retail has changed and is continuing to change over time. This interview is an example of that.
We enjoyed listening to Lindsey Mazza’s industry expertise on evolving consumer behaviour. Mazza has worked in retail for over 20 years and has witnessed how consumer behaviour has changed over time. She noted that customers are now more informed and have higher expectations for the brands they buy from. They want to know that the brands they support share their values and are transparent about their business practices. Mazza believes that retailers need to be responsive to these changes in order to stay relevant and top-of-mind for consumers.