Earlier this year, The Economist published a special report on The Future of Shopping, with nine articles on the subject. In its overview article, The Economist argued that “a new species of shopper is emerging: less centered on America, more intent on ensuring that what they buy reflects what they believe, and technologically dexterous. This latest incarnation of the global consumer looks likely to change how capitalism works - for the better.”
Three major changes are transforming the world of retailing. First, Western Europe and North America are no longer the biggest retail markets; nor do they epitomize the leading edge of retail as has long been the case, with innovations like the department store, the mall, catalogue shopping, and e-commerce. Shoppers are increasingly Asian. “Last year China and America were almost neck-and-neck as the world’s biggest retail markets. China’s two biggest online marketplaces, Alibaba’s Taobao and Tmall, both do more third-party business than Amazon.” And Asia’s shoppers are now at the frontier of retail, with innovations like livestreaming e-commerce.
A second change is that, beyond low prices, younger shoppers are increasingly influenced by their social, ethical, and political values when making buying decisions. They’re selecting which brands to engage with based on their social values like environmental credentials and workplace environment. Well managed firms work hard to establish the kind of positive reputation that attracts people to want to be associated with the brand and its products and services. This is particularly important in our Internet age, which enables a company’s actions to be instantly communicated to all. “One way that capitalism adapts to society’s changing preferences is through government regulation and laws, which voters influence, at least in democracies. But the dynamic response of companies to the signals that consumers send is a force for change, too,” and the reason firms spend considerable time, energy and funds nurturing their brands.
The final big change is the increasingly digitalization of the economy. The explosive growth of mobile devices means that a company can be engaged with its customers not only when they’re shopping online, but wherever they are, - at home, at work, or in a store. “More accurate and voluminous data about shopping patterns are breaking down the decades-long relationship between mass consumption and mass production. In its place is a more varied world in which the shopper can decide whether to buy online or in store, whether to shop via platforms or from individual brands, and whether to accept targeted ads or not.”