It’s like geese. In the winter they fly south in search of open water, grass and warmer climates and when temperatures rise, they return. I feel like we’ve witnessed a similar migration with retailers over the past year. In times of cold and unknown, we saw many retailers closing up shop and what was referred to as the ‘retail apocalypse’ (as much as I dislike using this cliché). But as climates are on the rise, so is a whole new era of “what’s next?” There is something very different about this migration. The return of the ‘retailer’ is much different than the shadow that once occupied the space. Retailers are returning with different models, partnerships and business models.
What’s the common denominator here? Retailers are changing and blending digital and in-store to meet the needs of the evolving consumer who doesn’t live in isolation of any one medium of shopping anymore. We know that (s)he wants to have options, and do so through any ordering channel that (s)he chooses whether it’s online, in-store or ecommerce (or a combination of the three). And the plight towards online from brick-and-mortar isn’t a one way journey. Pure play ecommerce retailers also recognize the value in what I’m going to call the total package. Think about the last great shopping experience you had. It wasn’t about what you bought or where you bought it, it was because they offered you the total package.
Retailers are spending mountains of money to retain customers they had the least chance of losing.
The total package makes a difference on where consumers shop. Not a punch card or points that you earn (that almost always expire before you get to use them). I read an article earlier this week by Doug Stephens about paid loyalty memberships. One thing really stuck out to me.
In fact, research shows that consumers actually have either a “negative or non-existent response” to loyalty programs. Loyalty lies within the experience. So what can you do as a retailer to fight the gravitational pull to stay consistent and be the change leader?
- Learn from pure play ecommerce: There is also a migration of ecommerce towards store openings (in one form or another). They’ve taken note that brick-and-mortar and ecommerce go hand in hand. I don’t believe that pure play ecommerce can work long term. I think that every pure play ecommerce company will either go out of business if they refuse to change or move from strictly online to opening (or partnering) to open stores. So take note. Where are your gaps and where are your strengths? Your perfect partnership could be an e-tailer away.
- Strength in numbers: There is a lot of focus on loyalty, but have we been going about it the wrong way? No one wants to carry around 20 punch cards, get points they have no idea how to redeem, and sometimes it will negatively affect the bottom line (not to mention add on capital expenditures that are liabilities, not assets). Loyalty comes through experiences and experiences drive value. As the saying goes, nothing attracts a crowd like a crowd. Many retailers are not trying to bribe with loyalty, but focusing on how to be more relevant. Listening and understanding how their customers want to interact with them and how or where they want to interact. Which brings me to my next point.
- Create that total package: It’s not about the who/what/where/why anymore. It’s about the consumer being free to do pretty much what they want, when they want it. So, give it to them.
- The ability to order anywhere (in-store or online)
- Flexible fulfillment options
- A seamless and fast payment experience
- Focus on your strengths: My entire career, I’ve always been drawn to solving puzzles. And nothing fascinates me more than success and how it was achieved. I like to look at the market leaders to try and understand what they are doing, what their change moment was that allowed them to leap the competition, and there is always one common element. They ALWAYS focused on their strengths. Whether it is the best food, the best and most responsibly sourced groceries or even the best customer service. We all have our strengths. By focusing on the end goal and not trying to be all things to all people that is one change that time and time again creates success.
So while you are looking to be the change leader in-store or online, you may have to get creative in your decision to build/borrow/partner. Many retailers are struggling to fulfill the last mile (fulfillment, post-purchase services and returns or even delivery), while others are turning to a payment partner like Verifone, who can get you out of the payments business and manage all of the mandates, certifications and security concerns that are distracting to the bottom line. The point is, peel back a layer, find that change and be the leader of tomorrow. After all, we all have better odds of winning the lottery than leaving change to chance. Chance is fatal.