What is consolidating and fragmenting in consumer tastes

Digital marketplaces with on-demand fulfillment can be incredibly well suited to providing low prices and extensive choice.

Brick-and-mortar assets can serve as a stage for customized consumer experiences that go far beyond ambience to surprise and educate the consumer.

Consumers have more options, and both switching costs and brand loyalty are low.

To survive, many retailers are finding ways to serve individual consumers in ways tailored to their needs and desires—transforming both their value propositions and their business models.

Operator is just one manifestation of what is arguably retail’s most fundamental transformation in a century-long string of changes.

In the early 1900s, retail was dominated by local mom-and-pop stores, each providing its community with a highly personalized shopping experience.

To effectively scale new business models, established retailers should pursue “small moves, smartly made”—testing, scaling, and incorporating the most successful ideas as foundations for their evolving businesses. Make a request and we’ll find it for you,” promises Operator, a new shopping app, on its website.

The service, developed by Uber cofounder Garrett Camp and former Zynga executive Robin Chan, offers a personalized, on-demand shopping experience that blends the benefits of virtual and physical retail.

This report explores emerging trends affecting both businesses and consumers, and considers the ways these trends are manifesting in the retail space.Done right, these experiences can become so valuable that they inspire consumers to choose to pay for them in themselves.Another opportunity for many large retailers is to become industry infrastructure providers.We will discuss possible options for established retailers in light of these changes, then describe small, smart steps these retailers can take to help position themselves well for the future landscape.Figure 1 provides a high-level view of the journey on which this report will take you.

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