It has become obvious to those of us in the retail industry that a change is a foot- the retail revolution is well and truly underway. I wrote recently on what retail will look like in 20 years and these thoughts were built largely on how consumers have dictated the way they want to shop and buzz words such as multi-channel have been coined – but really as I have said before – it’s all just Retail! Australia recently held a version of Cyber Monday called Click Frenzy; whilst the organizer’s site, and many big retailer’s sites, crashed under the pressure – it highlighted that consumers have a comfort and a desire to shop online.
Like all revolutions, new efficiencies, concepts, practices and attitudes take over the old guard – most revolutions see some of the old guard fall behind and not make it through to the other side – the Guillotine was pretty handy putting an end to many. In store shopping will never disappear, but it will change – like the way we shop – they way we are marketed to and our expectations. Older thinking retailers have seen online as the enemy or the competition; trying to maintain their status quo on traditional ways of thinking, not understanding the groundswell of change around them – not dissimilar to Marie Antoinette. It is important that these retailers stop worrying about potential ‘cannabilisation’ of sales and embrace the new way of shopping.
The key going forward will be by being transparent in as many channels as possible – popping up wherever the consumer is in a meaningful way. I believe there are 5 key areas to ensuring today’s retailers survive the revolution and avoid the guillotine.
1: Customer Service – We all know the key to ongoing sales is service – the better this is performed the more likely a customer is to return. Figures show that even if a consumer is disappointed with product but happy with the service they are more likely to return to your store than if they were happy with the product but disappointed with the service.
Online can serve a customer better than in store – the resources required to do so and the efficiencies of the service can ensure a customers questions and needs are answered more quickly and in a meaningful way. Live chat will be a minimum for this – but better integration between on and off line offerings will help ensure survival. Pureplay online sellers know the advantages of having in store pick up as well as in store returns – and is why global eCommerce giant Amazon is looking at having physical store presences. Combining the service offerings from online to in store and vice versa will help cater to the consumers growing needs. In a time poor society, an ability to initiate a return for item online rather than going back into the store will be beneficial as well as an expectation.
2: Engagement – We are all creatures who need social interaction; yet we are still surprised when someone else mentions us on twitter, replies to our Facebook queries and even sends an email and it is this level of multi faceted engagement that will be appreciated by consumers. The online model offers new and innovative ways to connect with the consumers and bring them back in store -create that excitement and interest; retailers have a chance to be closer to their consumers than ever before – so utilise it.
The engagement needs to help connect online to in store experience and offerings – little things like hashtags in change rooms and encouraging showrooming – it’s going to happen anyway – so own it and try and win them over. An ability to upload an in store wish list to a mobile device, an ability to use data on a mobile device such as measurements and past purchases for increased in store experience using coupons, customer data, geo location and future offers.
User generated content is only just starting to poke its head out – and this will increase; this plays well for another retail saying – when people talk, people buy. Retailers who give consumers a voice will be well rewarded.
3: Connectivity – Many call it multi-channel – tomorrow it will just be Retail – that being an in store presence, on line, mobile and tablet. These different platforms all have varying demands and different presentation capabilities; currently too many businesses are not what I would call responsive – they rely on developers and coders to constantly resize and adjust for the different formats and abilities. The retailers of tomorrow will need to have responsive sites that can automatically adjust, present and engage with the consumer ensuring the offer and the quality experience is the same no matter what the platform. Mobile and tablet growth of late has been astronomical – and it is not a sound use of resources to have developers constantly resizing site content – the model needs to be reversed.
Closely connected to engagement and customer service will be retailers ability to geo target and change its look and feel based on location. It might be raining in Melbourne and sunny in Sydney – so why should the website look the same for users in different locations – present jackets in Melbourne and shorts in Sydney – the more personalized and location specific presentation, the more likely to convert; and the more people who shop on their mobiles, the more geo location presentation will flourish.
4: Dynamic Advertising – Next year in Australia it is expected that the money spent on online advertising will surpass television advertising – a sign that marketers understand where consumers are spending more time; and retailers need to move with this too – because if a consumer is online – they can purchase. Retailers also need to approach mobile marketing differently – the advertising they undertake needs to be device and web specific, we are also seeing video making a comeback into popularity with brands, a renaissance if you will.
The personalization levels of advertising are currently only just beginning to be taken advantage of, concepts such as re-targeting, specific emails for cart abandonment, enticements to return, encouraging to share are all going to be mandatory in the future.
With the ability to access more and more data through multiple shopping portals retailers will know more about certain consumers than even their spouses and use the information to specifically target and personalize advertisements. Target in the USA are so good at this – they knew when a teenage girl was pregnant before the girl’s father did – sparking an interesting discussion between Dad – Target and then Dad – Daughter.
5: Supply and Distribution – Online shopping has opened the ability to buy numerous brands and ranges that were never before possible to millions of people worldwide. And retailers will be keen to keep this trend going – a decentralized approach to warehousing and distribution will be needed and offer benefits to the retailer.
A decentralized approach can lead to more personalization opportunities, it is more efficient in the long run, it helps to cross the numerous multiple channels of purchase and helps give ownership of the consumer to local stores – this is of particular benefit to Australian retailers where the franchise model is prevalent.
Supply chains that are closer to the end destination offer increased service ability and help spread the risk whilst being scalable for future expansion.
Many retail adages will remain true – such as service; but we will likely see smaller retail spaces, the use of in store online shopping, increased use of data by retailers, greater use of technology and retailers beginning to understand that digital is the fabric through which the consumer experience is woven. In our digital age being right is temporary – leadership in the digital age is likely to be short – it is important retailers look for new ideas and challenges in order to keep inline with the revolution and avoid the guillotine.