“It is not in the stars to hold our destiny but in ourselves”.
One question I am asked from time to time is whether I see the retail shop format that we all grew up with changing and the answer is a resounding yes with implications for every retailer, and our industry experts and associations accordingly.
The changes that we see to the way our consumers shop is perhaps the greatest structural change in retailing history, certainly the most profound in this generations experience fuelled and advanced by the enabler that is technology.
Understanding customers as shoppers used to be straightforward in a lineal context. As consumers, we would see the retailer advertisement, visit the shop and purchase. Awareness to consideration to selection to purchase was the norm of behaviour and our shop formats, size, design and experience responded in a large number of ways. Having made the purchase, it was highly unlikely that we would hear from our retailer again.
Shopping was fundamentally “done and dusted’ at the shop of choice, relying heavily on shop product range, customer service, price and value. Consumer research was predominately limited to press, catalogue, radio and television. Conversely, we retailers researched consumer genders, preferences and demographics as the holy grail of customer understanding.
As technology has begun its inevitable disruptive journey, we retailers have responded, somewhat cautiously through a silo channel approach building on line capability as a partner to off line physical shopping experiences whilst vigorously debating the pros and cons of each channel and accordingly we, today, see some of our retailers traditionally still perceiving online and store channels as competing businesses, yet our customers are rapidly moving on from this point.
Now our customers tell us that they ultimately care about convenience, experience and perceived value – much less about the channel through which they are served. The point about whether a channel is on line or offline is increasingly an internalised perspective related more to retail economics than it is about the customer experience.
What was once a simple transactional process becomes a complex web of value shifts across several customer touch points. Now, brands must manage multiple revenue streams, where the retail space may not be as primarily devoted to income, rather increasingly the shop becomes the brand showcase, becoming more focussed on value adding services such as tactile trial, advice and entertainment whilst all other mediums such as we see emerging today from apps to mobile data/digital adding their contribution to the entire customer experience.
Now retailers have at their disposal all mediums available when integrated as such that they “meet“ their customer from predictive understanding, social media communities, to pre sales activity, targeted augmented reality, physical in store experience, post sales communication to “community” communication. Each branded touch point communicating in harmony and seamlessly with their customer of relevance and choice.
As Alexander Gruinstidel of Method observes: “Designing these new shopping experiences is not just about immediate sales but about creating opportunities to facilitate impulse purchases, up-sell, and cross-sell. The challenge is in constructing a seamless shopping experience that integrates the in-store, transactional, and post-sale goals. The experiences must converge to promote discovery in-store and the continuation of the sales process at home or on-the-go”.
This relies on context and adds a dramatic twist to the messaging that we employ in our channel communications. By way of example, it is not enough to say “purchase this kayak for the white-water adventure of your life” rather it is using every channel available to ‘imagine and visualise that experience for your customer”. The role of the shop is to add the physical “theatre” to this process of choosing you as the retailer that brings that adventure to life. This potential kayak consumer started their journey with you in a myriad of ways well before entering your shop.
How that customer stays with you, in the pre and post sales experience, utilising technology, married to your community, advocating you and the experience you have created is as important now as any other step in that journey, probably the most important step and a fundamental change and adaptation to our retailer, customer relationship.
As sales margins decrease, business models must change. We must embrace the fact that monetary transactions are moving elsewhere, and often at a different time. As a result, retailers are becoming places that manage customer relationships and form and maintain brand awareness. Designing for customer relationships opens fascinating opportunities for up-sell, cross-sell, rediscovery, and consumer advocacy. To continue the kayak metaphor, if I may, some of us will be on this thrilling adventure whilst some of us will be on the banks observing.
Shopping as we knew it has changed and is changing at a rate that is breathtaking, we are the beginning of this journey. Adaptation and the pace of change will only get quicker, shops will and are changing as one spoke in this wheel of change.
Contact Brian at Retail Doctor Group on 02 9460 2882 to grow your ‘business fitness’.
Happy “Fit” retailing