Retail Is Changing

“Plus ça change, plus c’est la même chose” (loosely translated; the more things change, the more they stay the same.)

– Jean-Baptiste Alphonse Karr circa 1849.

 I’ve always been fond of that phrase. Beyond the contradictory cleverness of the statement, it makes me imagine a sage intellect calmly observing the true nature of the world all around him. I see this character delighting in new discoveries and experiences, while firmly grounded in the knowledge of what constant force is propelling events forward. Meanwhile, everyone else is misinterpreting and overreacting to every new experience or situation—unsure of what’s happening around them they panic and fret, searching for direction while fearing they will take a misstep into the abyss. While I am certain the origin of the quote above had nothing to do with retail, it certainly applies.  The more things change in retail, the more they stay the same.  Let me explain what I mean.

What’s changing? Technology.

How should retailers react to the powerful technology customers have access to? How will emerging technology trends change the traditional retail business model? Fascinating articles and compelling data all point to emerging technology and trends. Consider the following articles

Retailers scrambling to make sense of these trends chase what they believe is changing. “We need a tablet strategy.” “We need an omnichannel strategy.” “We need a mobility strategy.” Strategies built around new technologies become the refrain. It is, however, a trap. Focusing on the technology before understanding what the prime mover of the trends are is like the tail wagging the dog. This can lead to automating existing inefficient process in hopes of leveraging emerging technology trends (see Formula for Failure) or worse, the continuation of siloed business thinking that inflicts half-baked product and service offerings on the customer in an attempt to deliver an “omnichannel experience”.

What’s not changing? The Customer.

The customer is still the customer, and it’s the customer that moves retail trends, not technology. The customer is the starting point in understanding how business is changing. Understanding your customers’ behaviors and expectations will create a blueprint explaining how a given retailer needs to transform to meet today’s challenges. Start with contrasting behavior with expectation. Behavior for the sake of this article is simply the tendency of an individual to act a certain way in a certain situation. The options presented to the customer certainly influence his or her behavior. What products or services need to be physically appreciated and understood to inform a purchase and under what circumstance? What product or service don’t require a trip to a retail store and why? Once you understand how customers will behave in a given set of circumstances you can start to understand expectations.

Customers may not always articulate what they want, but invariably they know it when they see it. Understanding customer expectations is like looking in the mirror for a retailer.  Is the experience I deliver consistent with what I want my brand to be? As the competitive landscape changes and customers began to compare a broad range of retail experiences, their expectations are growing and more nuanced. Customers are no longer comparing the general checkout experience at retailer A with retailer B; they are also comparing the experience they had at the bank, the self-serve checkout at the grocery store, and the mobile app on their phone.

So, you understand the behavior and expectations of your customers. Now, what? Retailers that build strategy based on a customer-centric approach quickly come across their own internal inconsistencies with policy and procedure as it relates to the customer experience. These inconsistencies are the result of the organic growth most retailers experienced as they launched an online business to complement their traditional retail footprint, but have also produced bizarre permutations to the customer experience. Let me give you an example that happened to a colleague last holiday season. His son received a gift card from a relative. The gift card was purchased online from a national retailer that has online and traditional retail channels. His son was very excited and couldn’t wait to make a purchase. Father and son braved the post-holiday crowds, and began shopping at their favorite retailer. After gathering up their purchases and patiently waiting to get to the front of the line, they were told the gift card only works online. Sending them away empty handed with the son massively disappointed.  Brilliant.

Retailers are also victims of their own mistakes, introducing poorly thought out services simply because the technology allows for it. An example from my recent past was a retailer adding SKUs to its online site to try and demonstrate an abundant selection. One of the items was a 70-pound play structure packaged in three separate boxes, each big enough to contain a full grown human being. Once an order was placed the company paid three times the value of the product to ship it (for free!) across the country.

The good news is with the right cross-functional team these problems can be solved right away. In fact, this process of retail self-discovery should inform decisions around what technology to invest in to support the customer experience. Retail has always been fast paced and highly competitive. Retailers have learned to be highly reactive.  This is a survival mechanism but has also developed into a bad habit. Avoid the temptation to try and figure out what’s changed and dive headlong into technology centric tactics. Instead, focus on the constant. Focus on what has stayed the same. Focus on the customer.

Suggested Reading: