Technology and the Internet are disrupting virtually everything they touch. To make matters worse, the technology that is disrupting your business model is simultaneously empowering your consumer whose demands are voracious and growing. Never before has the consumer had so many choices and so much power. Moreover, with a macro backdrop of an economy teetering on a recession and a retail environment oversaturated with goods and overstored, flat is the new up. Most retailers’ sales reports have meandered between low single-digit declines and lackluster gains for too many quarters.
Retailers are scrambling to figure out how to capture market share and actually nudge some growth out of their businesses. The NRF’s 2016 Big Show provided four days of technology solutions, along with insights from multiple education tracks and keynote addresses, where the overarching theme was focused on giving retailers the same power as the consumer. Workshop sessions and vendors identified the tools necessary to engage this independent-minded consumer, and these thought leaders and practitioners advised retailers and brands how to find, engage and provide a better experience for the customer, online and off, all to establish sustainable customer loyalty.
A few bright moments made this year’s show memorable.
Colin Powell shared a message of the indelible power of trust, respect and empowerment in his keynote address. These are compelling themes to all leaders and particularly germane to retail executives who have large fleets of sales associates in direct contact with customers. Powell’s advice: hire people you have confidence in to represent your brand and share your values, and empower them to serve and grow the customer base.
The biggest takeaways at the show were really more of the same.
The obvious reason for big data is to turn it into intelligence to understand your customers. Then take it to the next level and use these insights to personalize your offering, product and experience, and thereby capture a sale, develop a relationship and establish a modicum of loyalty.
Knowledge is a key. Today’s shoppers are better informed about products, competition and price than sales associates. All too often this level of awareness drives consumers to transact purchases online, bypassing poorly informed sales associates. Retailers must empower their staffs with in-depth information spanning inventory, availability, competition and pricing, at the very least, to be meaningful to shoppers.
Fun is very important. NRF Chair, Mindy Grossman, drove that point home in her fireside chat with students. Gamification, play and rewards create a stickiness and an engagement factor increasingly necessary in a world of too many copycat commodity products. The differentiator: Great experience creates engagement.
Millennials offer slim hope to retailers. These digital natives care more about services and creating experiences than products (retailers, rethink your value proposition). When they do buy, they want a brand with purpose. Shinola is case in point with its emphasis on community and craftsmanship, and it is re-establishing downtown Detroit as a cool destination to boot.
While omnichannel is a household term, few, if any retailers, are really adept at its execution. With the steady launch of new technologies driving consumer expectations, IT budgets seem likely to increase high double digits in 2016. That said, no sooner is a software chosen, okayed and implementation begun, then another new solution with better bells and whistles appears. The future workforce will be weighted toward data scientists, engineers and digitally savvy tech experts.
While there is no doubt that stores have to adapt to the digital world, there is still so much they already have to leverage their assets to differentiate them from the ecommerce competition. They sit on a physical space enabling customers to have experiences and develop a relationship with a brand. Retailers need to harness their front facing associates, empower them with knowledge and tools, and create places where people want to gather, learn, and, yes, shop.
Because most of us are tethered to our phones, stores must be Wi-Fi enabled. Worries about showrooming are over. What channel customers use to buy has become irrelevant with the seamless fusion of the omnichannel model.
Demand-based technology is the driver today. So much more is expected by today’s informed and demanding consumers. For beginners, they want access to the entire merchandise assortment, every SKU, ideally with free shipping to one’s home, or alternatively, to a local store. Beacon technology is growing, and should be a true facilitator for retailers as it supports facial recognition of your best customers as they enter the store, personalizes offerings for your clients and sends them exclusive deals that potentially enhance conversion and transaction size.
Among the many sessions I attended, an oft repeated refrain was advice to collaborate and partner, thereby leveraging the learnings of other organizations synergistic with your own business. Try, fail, pivot and try again. Do not wed your business to a single strategy. Constantly reinvent your business. Take a holistic view of your customer’s evolving needs rather than a look backwards at the solutions that worked in the past. It is crucial that retailers focus on their sustainable competitive advantages and points of differentiation.
The Robin Report remains leery of the future of retail with business as usual. Today’s unwavering focus on meeting short-term sales objectives with heavy promotions that undermine the R&D vital to product development and marketing is eroding profitability.
Retailers are an optimistic, if frequently shortsighted, lot. They invest in inventory with the promise that someone will buy it. They bring goods to market with the trust that customers will come to them and purchase.
But today’s consumer is a few too many steps ahead of many retailers and swiftly becoming the genius shopper informed by legions of Internet-based data providers. The tables have turned and so heed the warning: from caveat emptor to caveat venditor. All this discounting paves a road to irrelevancy and insolvency.