For a successful partnership, a strategic outsourcing partner must deliver on these five key fronts -

• Experience
• Delivery
• Empowerment
• Technology
• Insights

Retail and consumer landscapes are volatile, uncertain, complex, and ambiguous (VUCA). This, coupled with constant changes in consumer behavior, makes having a strategic outsourcing collaboration that is geared to the unique and volatile nature of this industry, critical.

In this article, we discuss how you can improve your Strategic partner outsourcing strategy by examining three major trends in the retail and consumer markets.

If you are a representative of the retail and consumer industry and you plan to outsource some of your activities that can be managed by strategic partners having expertise and domain experience in business and knowledge processes or expand your already existing outsourcing operations, then this article will assist you in getting started.

The age of artificial intelligence and hyper personalization is here

In this day and age, brands know more about what customers need than the customers themselves.

It is very easy for retail and consumer brands to lose track of what their existing and potential customers actually need in an age where each internet user is bombarded with multiple commercial messages every day.

Retail and consumer brands are using personalized advertising¹ to win more business by considering customers as people and not statistics. Thanks to technological enhancements, it is possible for retailers to get an in-depth understanding of customer behavior by analyzing a plethora of insights from purchase and user activity data.

By using this data, existing and prospective customers can receive customized information on products and services that are relevant to them at the time. Therefore, brands understand their customers’ needs better than the customers themselves.

If human-driven systems can accomplish all this, imagine what artificial intelligence (AI) driven systems are capable of.

As AI-driven bots become more sophisticated or human like, the interaction between humans and technology becomes seamless, resulting in a superior customer experience by quickly and effectively satisfying customer needs.

In response to this sentiment, the business world has heavily invested in voice recognition and speech recognition technologies powered by artificial intelligence, a market that is predicted to reach $22.3 billion by 2024².

In the domain of affective computing, AI is being used to detect emotional insights within customer data, where significant investments are being made. Experts predict it will reach a market value of $41 billion by 2022^3, despite being an emerging technology.

In light of this trend, retailers and consumer brands must find suppliers who are able to -

• Besides providing service, act as strategic partners who assist in decision making.
• Can integrate operations and platforms through digital transformation.
• Work hard to ensure a seamless 360° customer experience, guided by customer centric design thinking.
• Convert most of their legacy labor delivery centers into digital delivery centers that are AI and robotic based.

The rise of experience-based purchases and consumer social consciousness

The days when price was the deciding factor in purchase decisions are long gone. Currently, people value customer experience more than price⁴.

Many retail and consumer companies have changed their selling strategy from focusing on price to focusing on factors such as convenience, experience, responsiveness, environmental concerns, and ethics due to the rapid growth of consumer channels.

Consumers expect brands to offer -

• Loyalty programs.
• Readily available information of products/services.
• Novel shopping experiences that integrate augmented reality (AR)/virtual reality (VR).
• Responsive and interactive social media presence.
• Value added services along with core products/services.

Along with experience-based buying, many consumers are becoming increasingly worried about the environmental and ethical impact of their purchases.

A study conducted by Forrester with a representative sample of US consumers suggests that over 41% of the respondents evaluated brands and their offerings based on their ethics and values. Additionally, consumers also associate themselves positively with brands that are in line with their own social, environmental, and political ideals⁵.

Thanks to social media and easy access to the internet, consumers are beginning to expect brands to adopt sustainable practices like ethical sourcing, carbon footprint reduction, and waste reduction.

Due to this trend, retailers and consumer brands need to source Strategic partners who -

• Adopt a multi-disciplinary, multi-trunk, and agile approach to solving problems.
• Apply a problem solving mindset to make the most of the opportunities created by this trend.
• Prove ethical behavior, a sustainability mindset, and eco-friendliness, as well as a robust corporate social responsibility (CSR) program.

The importance of social media and the rise of ecommerce

As social media evolved to become more than just another type of website on the internet, it became an important part of several people's purchasing journeys. Consumer research has shown that products/services accompanied by a relevant social media presence are much more likely to be purchased⁶.

As consumers increasingly use these tools to interact with brands, retailers should be actively engaged with them.

As a result of the pandemic, social media usage is at an all-time high. Consumer and retail companies have heavily tapped into the potential of ecommerce in this trend.

Ecommerce sales in the UK rose nearly five times before the pandemic in 2020. Several other countries also posted large gains, including the US with 3.3x, India with 2.0x, and Germany with 2.3x.⁷

Pandemic shutdowns drove people around the world to adopt and embrace ecommerce channels for online shopping. The amount of ecommerce sales grew exponentially compared to in store sales, and retailers expect these new buying habits to continue even after the crisis ends.

As a result, retail and consumer brands should seek Strategic partners who -

• Have expertise in digital marketing as a service.
• Can understand the client’s brand better via social media listening and analytics.
• Have the capability to protect and enhance the client brand’s revenue.
• Can provide omnichannel coverage and help with piloting innovative solutions.

Wrapping up

In total, the outsourcing Strategic partner selected would have to deliver on the 11 aspects mentioned in this article. Retailers and consumer companies can condense all 11 into five key points to focus on to ensure a successful partnership:

• Experience — Provide a unique selling proposition to a unique value proposition.
• Delivery — Help companies cope with the accelerated adoption of ecommerce.
• Empowerment —  Ensure value alignment for socially conscious consumers.
• Technology —  Provide solutions for digitally and socially connected consumers.
• Insights — Hyper personalization of the shopping experience.

Wipro has provided stellar services to retail and consumer companies for over 15 years. The information in the article is a compilation of our rich experiences, and we hope it will prove useful in your outsourcing strategy.

Rishi Reejhsinghani
Presales and Solutions - Digital Operations and Platforms, Wipro

Rishi has business strategy consulting experience with expertise in business study, business process reengineering solution designing, and project management for clients in the retail and consumer domain.

Charulatha Balakrishnan
Retail Presales & Practice at Wipro Digital Operations and Platforms

Charulatha has expertise in RFX solutioning and go to market strategy for retail and consumer packaged goods clients. She is a chemical engineer with an MBA in marketing and operations from the Indian Institute of Management, Kozhikode.