The retail industry is experiencing a significant shift in consumer behavior, with brands facing challenges in maintaining their relevance. Food inflation has led to consumers opting for store brands of packaged goods that are more affordable than leading national brands. This trend has been on the rise since 2019, with consumers increasingly prioritizing private label goods when making purchasing decisions. Gen Z-ers, in particular, are the least brand loyal generation as they rely on reviews and online communities for information.
The Internet and access to information have empowered consumers to make informed decisions, leveling the playing field between no-name brands and industry giants. Small business consultant John Jantsch emphasizes the importance of building a loyal customer base through genuine interactions and positive sentiment online. Artificial Intelligence (AI) is also playing a role in reshaping the influence of traditional brands, with individuals now having more sway over consumer behavior.
Despite the decline of traditional brands, retailers are finding ways to build loyalty and create a sense of community with their customers. Levi’s, for example, is rebranding itself as a “denim lifestyle brand” to stay relevant in the changing retail landscape. The focus is now on engaging with customers through community events and partnerships to foster loyalty. E-commerce continues to dominate the retail industry, but the value of friendly and knowledgeable customer service cannot be overlooked.
Consultant Rei Inamoto encourages merchants to view their interactions with customers as conversations rather than transactions. This approach emphasizes the importance of listening to customer feedback and adapting to their needs. As the retail industry continues to evolve, retailers will need to find new ways to connect with consumers and build lasting relationships. In this era of de-branding and increased consumer empowerment, creating a sense of community and fostering loyalty will be key to success in the retail world.
