Resurrecting Retail—Part One: Reinventing the Customer ...
Transcript of Resurrecting Retail—Part One: Reinventing the Customer ...
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retail consulting and industry thought leadership
Resurrecting Retail—Part One: Reinventing the Customer Experience
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At its core, retail has always been at the center of how humans interact, consume, and exchange value.
Bartering, marketplaces, catalogs, departments stores, and malls are the manifestation
of retail through the ages. This landscape remained relatively unchanged until the rise of
the digital age. The internet’s impact on technology, culture, and commerce has been
revolutionary. It forged the opportunity for eCommerce, enabling customers to transact
and purchase online around the clock and virtually from any location. The internet opened
up access to customers who didn’t have the time, interest, and/or means to get to a
physical store, and so began alternate digital channels and additional opportunities for
both digitally born and existing brick-and-mortar retailers.
The retail industry is in a highly dynamic and disruptive state where technology and
consumer behaviors are changing at paces never before imagined. News reports oscillate
between ominous predictions about the demise of the traditional store, and tremendous
opportunities brought about by emerging technologies promising to foster deep consumer
understanding and engagement across multiple channels and platforms.
However, simply introducing digital channels has not proven to be a panacea for stale
retailers—there are a myriad of new challenges to consider. Changes in consumer
behavior and expectations thrust forward by advancing technologies and new service
models continue to create significantly greater expectations and demands from
consumers. No longer is it enough to have a store or a website that merely transacts—
modern consumers expect retailers to not only understand them, but anticipate their
needs, personalize their experiences, provide unexpected value, and make all
touchpoints seamless, convenient, fast and easy.
In the first edition of this two-part point of view, we discuss the reasons, challenges, and
implications of becoming a truly customer-centric retail organization. In Part Two we
outline key steps to achieving this goal.
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Channel-less Customer Experiences All relationships are built over time, through mutual exchange and experiences. If a retailer’s success is the result of relationships cultivated with their customers, nothing is more paramount than acutely understanding those customers and remembering why the business exists in the first place. This is why social media has become a compelling and important medium since it fosters interaction and engagement between customers and brands.
Unlike most retailers, customers don’t think in channels; customers view any interaction—digital or physical—as experience with the brand that is seamless and channel agnostic.
These ‘channel-less’ experiences require a dynamic shift from traditional product or channel-centric approaches. Long gone are the days of ‘stack it high and watch it fly.’ Retailers and consumer goods companies embarking on understanding more complex customer data and journeys are faced with new requirements to attract, engage, convert, and retain customers. 1
This mindset shift to ‘experiences with the brand’ is about building relationships and enabling customers to enjoy consistent interactions regardless of channel—and providing unexpected value along the way. Giving customers unparalleled
1 Image by StockSnap (https://pixabay.com/users/StockSnap-894430).
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experiences will result in loyal customers and advocates who are not only willing but
enthusiastic about sharing their experiences. As Harry Gordon Selfridge once said,
“Excite the mind, and the hand will reach for the pocket.”
A key component of customer-centricity is trust in the brand. Trust manifests itself through
several components in the retailer-customer relationship: proper assortment, product
information, pricing, inventory accuracy, data security, customer service, quick delivery,
and more. Customers must be able to trust that these components are planned, designed,
supported, and managed flawlessly and consistently. 2
Another key factor is being relevant and anticipating customers’ needs while avoiding the
‘creepy factor.’ This is now more evident with the increasing use and acceptance of
advanced analytics and artificial intelligence technologies, such as Alexa and Siri. It is
widely known that online behaviors are tracked and leveraged by digital retailers, and in-
store customer tracking technologies are becoming more prevalent; however, retailers
must be very cognizant that shopper behaviors vary widely—some prefer a very
2 Image by Simon Steinberger (https://pixabay.com/users/simon-3/).
Trust manifests itself through several
components in the retailer-customer relationship
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autonomous experience, while others appreciate more involvement by the brand,
particularly concerning in-store service. In either scenario (as well as those in between),
retailers must carefully balance their understanding of customers with being too invasive.
With so many choices of where and how to buy products, not delivering on customers
wants and needs means someone else will. Customers value experiences, solutions,
convenience, and effortless shopping. Supporting growing consumer demands and
expectations is paramount for remaining relevant and if done well, a competitive
advantage.
Customer-Centric All-Stars
Starbucks and Nordstrom are examples of customer-centric companies achieving
success by putting consumer experiences at the forefront of decisions about how to best
spend resources and focus efforts.
Starbucks has always sought to become the “third place between home and work,”
designing stores to be inviting, comfortable and a place to stay a while. They continually
seek to elevate experiences, deliberately exiting their online store business in fall of 2017
to simplify and integrate digital, mobile, and store experiences as part of their ‘digital
flywheel’ priority focusing on four pillars:
• Rewards
• Personalization
• Payment
• Ordering
The mobile order experience is convenient, easy, and seamlessly integrated into the
mobile app and rewards loyalty program and drives customers into stores. Not
surprisingly it is the most popular and regularly used loyalty rewards app among
restaurant chains according to a study3 by The Manifest.
Nordstrom, already known for its legendary customer-centric culture, continues to invest
in technology and data analytics to create more personalized and cohesive experiences
across channels. Advancements include expanding online offerings, updating the loyalty
3 https://themanifest.com/app-development/how-customers-use-food-delivery-and-restaurant-loyalty-apps
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program and mobile apps, and testing new store concepts (for example, Nordstrom
Local)—all with the objective of improving seamless service offerings and experiences
for customers, regardless of channel.
Other brands that excel at customer-centricity are also notable for concentrated focus on
employee satisfaction at every level: Costco, HEB, Publix, and Wegmans—all of whom
are consistently cited in a variety of annual publications focused on “the best places to
work.”
Incidentally, all of these brands
operate authentically and foster
trust by aligning their
organizations and resources to
support their respective purposes
of putting people at the center of
everything they do. This is
reflected in their respective
mission statements. However,
they tend to be the exception since
many retail and consumer goods
companies have yet to make the
changes necessary for operating
at this level. Still, they are
excellent examples, representing the enormous value exchange that can be achieved by
continually improving, assessing, testing and trying things to remain meaningful and
relevant. 4
The Path to Customer-Centricity
In customer-centric companies, the entire enterprise—all departments, processes, and systems, exist to serve the customer first, by creating value, aligning, and
collaborating to engage customers on their terms. This means shifting the focus and
approach to developing the experiences first then delivering accordingly across the
4 Image by Juan Guemez (https://pixabay.com/users/jguemez-1058256).
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appropriate channels and platforms, as well as in terms of aligning product assortments, messaging, promotions, and customer-facing roles and responsibilities.
Recognizing retailers are at various stages of maturity and levels of sophistication, it is important to note that there is no one formula for success. Evolving to improving customer experiences is unique to each organization’s circumstances. Further, companies do not need to take an all-at-once approach—they can investigate and execute incremental improvements that will bring meaningful results.
The following components are vital to becoming customer-centric and require careful consideration before initiating action:
• Planning strategically and collaboratively • Identifying gaps in the company’s current versus future state • Being consciousness (and honest) about current capabilities • Exploiting new technologies appropriately and relevantly • Ensuring transparent communications internally and externally • Understanding the resources required to change
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Final Word
Of course, recognizing the reasons for and importance of becoming a customer-centric
organization is merely the first step. Knowing how to do it is another matter. In the second
part of this point of view series, we will outline several key transformational steps to
consider in identifying, assessing, and implementing strategies to evolve your enterprise
towards customer-centricity.
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for more details contact:
Sonia Hernandez Partner | [email protected] Sarah Booth Senior Manager | [email protected] 770.882.2205
The Parker Avery Group The Parker Avery Group is a boutique strategy and management consulting firm that is a trusted advisor to leading retail brands. We combine practical industry experience with proven consulting methodology to deliver measurable results. We specialize in merchandising, supply chain and the omnichannel business model, integrating customer insights and the digital retail experience with strategy and operational improvements. Parker Avery helps clients develop enhanced business strategies, design improved processes and execute global business models. Learn more about us at:
www.ParkerAvery.com