Welcome to the new retail economy.
Succeeding in retail will require companies to become extremely consumer-centric to find new value propositions across screen and aisle.
A lot is being talked about the New Retail Economy. With big box stores continuing to close down and ecommerce taking center stage, consumer behaviors and technological advancements are creating a new world for commerce and retail.
“New Retail” is where a seamless consumer experience along with the efficiency of retail continues across screens or aisles for an individual relationship between brand and consumer.
By leveraging universal customer profiles accessible across all locations and devices and offering on-demand order fulfillment anywhere, the New Retail economy is grounded in the same mechanisms of the old world – customer convenience and satisfaction - only now it’s personal.
The driving force of the New Retail economy is the consumer. So, retailers need to start there and work backwards to find and design experience and strategy.
Here are some quick tips to get your company riding the New Retail economy wave - not to mention make you look like a rock star in your next strategy meeting:
Action 1: Know your consumer and their journey
We need to answer detailed questions like: How do consumers find out about your company, brand or product? What is the path they take to learn about you or consider you for a purchase? What is the process they have to take to buy from you? What are the follow up services once someone buys or doesn’t buy? And how do they decide to repurchase from you?
You should know the answers to all of these questions intimately - because if you don’t, how do you expect a consumer to find their way through it?
Action 2: Find those moments of Chore -- and fix them-- and those moments of Cherish -- and celebrate them
Now that we intimately know our consumer journey, we have an understanding of the moments that consumers hate and the moments they love. Both of these types of moments are ripe with opportunity for your business to capitalize on. And this is also where disruption happens in industries, so if you’re not exploiting the opportunity, someone else will.
Let’s look at the moments of chore: If our customers hate shopping for your product in-store then how can you change that experience? This is exactly the sentiment Casper capitalized on. They made the tedious and uncomfortable task of awkwardly laying on a mattress in a dimly lit mattress store into a quick and easy online experience.
Another example of a moment of chore is purchasing everyday products that are neither fun to shop for nor exciting. One way to combat this is to make purchasing easy and automatic, Dollar Shave Club figured this out by limiting superficial options and creating easy and affordable subscription plans.
Moments of chore are weaknesses that can and will be optimized. The only question is by whom?
Now let’s look at the moments of Cherish. These are the moments that consumers absolutely love to do. These moments include driving a new car off the lot, re-arranging a new rug that really ties the room together or even trying on a new wardrobe that is perfect for your dream lifestyle. These moments can and should be celebrated and even expanded on.
Action 3: Craft an Omnichannel Experience around the consumer
As we’ve seen, consumer behaviors will vary based on preference and taste. We have to accommodate these preferences to be successful. This requires building a dynamic, omnichannel experience that not only fluctuates with the consumer’s needs, but evolves over time and passes from channel to channel.
This will require that your organizations mobile commerce, e-commerce, in-store and marketplace strategies are all working together to ensure the consumer is experiencing one relationship over time, across channels. If a consumer starts shopping on their mobile device and places items in their cart, then comes to try on the products in-store - you should be providing their cart items to them at a moments notice without having them start from scratch.
As with many things in the New Retail economy, this will require an integration with data and technology to have it truly come to life. But as we’ve seen with companies like Zappos and Amazon, data and experience are quickly becoming the lifeblood of all retail success.
Action 4: Grow & Evolve
If there is one thing we need to understand about the New Retail economy - it’s that it will continuously change. As consumer’s find different ways to shop, buy and engage with companies their expectations and needs will evolve. However, with the right mindset on the experience, the consumer and their data, brands will be able to move quickly to continue to add value to the consumer - wherever they may be.
And a note about Mergers & Acquisitions
Over the last few years, we’ve seen a lot of activity in the Mergers & Acquisitions space for retail. Some of the activity is to help drive in-store engagement with consumers, while some companies are using it more as a business strategy.
Walmart, for instance, is facing tremendous pressures from Amazon and their CPG customers. To combat these pressures, Walmart is undergoing a massive transformation. With purchases like Bonobos, Jet.com and FlipKart, they are aggressively looking to buy their way into a leadership position. It’s definitely too early to tell the success of these investments, but one thing is for sure, that growth through acquisition is a tool that many traditional companies are using.
Ready to chat more, feel free to reach out.