Customer choice comes under the microscope

Customer choice comes under the microscope


In today’s environment, customers care less about breadth of assortment and more about availability and that could change the way many retailers operate.

customer choice comes under the microscope

Indeed, as countries moved into lockdown status and grocery store shelves emptied, many grocery retailers started exploring ways of narrowing their focus down to a decreased range of high-demand items — creating ‘minimum viable ranges’. In doing so, supply chain efficiency and working capital measures are increasing significantly; few customers have so far complained.

Once again, COVID-19 has accelerated a shift that had already been underway across the retail sector. For some time now, customers have had an almost unlimited selection of items online. Fancy an organic sun-dried tomato ketchup? Or a blueberry flavored ketchup? Maybe a ketchup already mixed with mustard? Before the upheaval, consumers could find those, and hundreds of other different ketchup brands, flavors, sizes and packages with just a few taps on a smartphone.

In the near future, customer expectations will once again shift. Our view suggests that only two types of retailers will likely survive: those offering a limited yet curated selection and those offering unlimited selection. Those in the middle may be the ones that struggle most.

To combat this, retailers need to improve the sophistication of their loyalty programs, moving away from traditional points-based systems to instead create integrated and unified rewards programs that allow multiple product and service offerings to be bundled together in a way that encourages consumers to dwell in their ecosystem.

Secondly, retailers need to explore a wider range of models and approaches for gathering and analyzing customer data. Integrated reward programs may be part of that solution. So, too, will participation in various platform plays. But expect retailers to start thinking more about how they can partner with others in their customer’s ecosystem to not only deliver value and improve relevance, but also to capture greater and richer sources of customer data.

You can also expect to see retailers increase their investments into new and emerging technologies. Voice ordering via smart speakers, for example, is allowing innovative retailers the opportunity to deliver a more convenient on-demand ordering experience (particularly relevant in a shopping environment dictated by isolation measures). Others are exploring how blockchain might help improve the value of their loyalty programs.

Ultimately, we believe that the shift towards reduced choice will likely lead to more efficient supply chains, lower costs and better customer satisfaction.

The excerpt was taken from KPMG article, Global retail trends 2020: Preparing for the new reality.

© 2024 R.G. Manabat & Co., a Philippine partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.


For more detail about the structure of the KPMG global organization please visit

Connect with us