Five “Obvious” Trends that Some Retailers Still Don’t Get
You would be forgiven for thinking, from the retail performance headlines earlier in January, that we were in 2005, not 2014. How can it be that a major retailer such as Morrison’s has only just launched their on-line service? The analogy of an ostrich with its head buried in the sand doesn’t feel inappropriate.
The way consumers research, short-list, purchase and then express their post-purchase emotions have rapidly changed over the past decade. Yet it seems some retailers have been either incapacitated by a lack of knowing how to respond or decided that it was best to just keep doing what they have always done. The latter strategy may have got them through the very short term, but only has one ending over the long term and it’s not a pretty one.
Here are five trends that retailers must not only get their heads around but take action on, now. They are not hype, they are real and very obvious.
1. Seamless multi-channel top to bottom, end to end
Nothing new here, commentators having been talking about this for a number of years. But as 2013 has shown us, retailers must get this right this year. It’s not just about your customers purchasing however, whenever or wherever they want (from tablets, laptops, smartphones and in-store) or even click and collect, it’s about getting every aspect of your customer experience truly multi-channel from merchandising, purchasing, delivery, through to customer service and support.
As we look ahead, I wonder how many purchases will be made on consumer’s smart phones and tablets whilst standing in a store? Those very same consumers also calling a retailer’s customer service team for advice, whilst still standing in the same store (because it was easier to do than hunting down an assistant)?
It’s no longer about just a glossy front end, the supply chain, operations and customer experience must support this.
At the same time, retailers are going to have to take a hard look at their physical retail estate – not that its not needed – but is it in the right shape, size and location for your customers today and in the future?
2. Complete transparency
There is nowhere to hide and retailers need to get comfortable with this, adapting their business model accordingly.
Shoppers today are truly empowered. From pricing, to product feedback and specifications, to the quality of your end-to-end service, to stock levels – they now have all the information at their fingertips. I suspect they have almost more information at their fingertips than retailers do – well at least than retailers are currently using or know how to use.
We are entering a time when “traditional merchandising” will become less and less effective. Retailers will find it harder to “push” poor performing, high margin products to drive short term sales, or even set their product mix, without really listening to their customers – who for a number of years have been telling them very clearly what they want.
3. Know your customer by “listening” to the data
Retailers have a huge amount of data available to them, if they would only listen to it.
They know what people look at (at least digitally), what questions consumers are asking, what and when they purchase, how they want it delivered, what they thought of the product and service, who is contacting the customer service team and by what communication channel. I could go on and on – that is just the start.
Retailers need to move from telling or framing the opportunity to listening to what their customers tell them.
I suspect that many will have to take a close look at the shape and mix of their teams – where are those data and insight specialists who can not only analyse the data but derive actionable insights that all parts of a business can use?
We really are talking about re-orientating the whole business with the consumer at the centre. Surely that is what retail should be anyway?
4. An outstanding customer experience
Unless you are a true price driven retailer (for example the 99p brigade), but I would argue that even there it is relevant, now is the time to deliver a world-class customer experience tailored to your target customers.
Some retailers have been delivering a great customer experience for years. Others have been able to get away with a less than optimum experience. In a world where every consumer is connected and have as much knowledge as the retailer, purchasing however they want, with the ability to get “the word out” at a speed and reach like never before – you only have one choice to thrive. Learn to provide that truly outstanding and seamless experience and optimise your business model to deliver it.
5. Engage with your customers
This last one is my personal hobbyhorse. Consumers are engaging with each other and with brands and retailers like never before, enabled by technology platforms such as Twitter, Facebook, Pinterest and Snapchat. Retailers must embrace this to drive sales and long-term customer loyalty.
The phase of just having a small social media team handle this in a superficial manner is over. It needs to be on a business wide basis. If a customer reaches out to a retailer on Twitter and subsequently calls a retailer’s call centre, consumers now expect retailers to recognise that it’s the same person contacting then, albeit by different channels….
If retailer’s have been listening well to the data, that call centre agent should also have an amazing picture of that customer’s past purchases and experiences. That can’t be too much to ask…can it?