“It is not in the stars to hold our destiny but in ourselves” – William Shakespeare One question I am asked from time to time is whether I see the retail shop format that we all grew up with changing. The answer is a resounding yes, with implications for every retailer, and our industry experts and associations accordingly. Changes to the way consumers shop is perhaps the greatest structural change in retailing history, and certainly the most profound in this generation’s experience, fue
perience, 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 to hear from the 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 disruptive journey, retailers have responded somewhat cautiously through a silo channel approach building online capability as a partner to off line physical shopping experiences while vigorously debating the pros and cons of each channel.
Accordingly, today some retailers traditionally still perceive online and store channels as competing businesses, yet our customers are rapidly moving on from this point.
Now our customers tell us 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 online 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 touchpoints. 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, more focussed on value added services, such as tactile trial, advice, and entertainment, while 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 all mediums available, when integrated 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 communicates 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 instore 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 the retailer that brings that adventure to life. This potential kayak consumer started their journey in a myriad of ways, well before entering the 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, some of us will be on this thrilling adventure, while some of us will be on the banks observing.
Shopping as we know 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.
Contact Brian at Retail Doctor Group on (02) 9460 2882 to grow your ‘business fitness’.
Happy “Fit” retailing