Is retail under existential attack, or merely resetting itself? Are retail demographics irretrievably out of step with digital innovation? Are early adopters sufficiently influencing the late majority? Are retail disruptors short-term optimists, or long-term pessimists?
Like thought bubbles, these questions hang over the daily work lives of retail CIOs. But they needn’t plague decision-makers, either.
Most retailers experiencing positive ROI are doing so by listening as their customers tell them what they care about and want, rather than simply feeding them products and deals they don’t. For these businesses, the question isn’t whether bricks-and-mortar is dead; it’s how physical stores can be transformed using digital to create newer, more exciting, and more profitable experiences.
Take a look at in-store integration. Why should consumers embrace physical shopping? For bricks-and-mortar to thrive, the experience must outmatch its online equivalent. It’s certainly possible; Best Buy attracts geeks who want to try out audio systems using its “man couch.” Barnes & Noble mixes reading with a coffeehouse atmosphere.
Is there a future for other retailers as well? Can GameStop, for example, give brand-loyal gamers exclusive access in the store to try out their pre-orders? Can Sears stop the bleeding by asking customers in the store how they want their products delivered and installed? Can Home Depot deliver bags of cement every morning to the job site, saving contractors a couple hours of unpaid work day after day?
For today’s retailer, success hangs not so much on price as it does on experience. It’s built not only the first time a customer interacts with the brand, but over the long haul, through preferences that are increasingly personalized.
The trick is to discover how to engage consumers in new ways that are valuable to them. Contractors know their customers value them for their work—not their ability to shop. Shoppers are likely to be intrigued when prices are lowered, at least on limited offerings, through Apple Pay and similar mobile payment/digital wallet services. The landscape is wide open for new solutions, as long as retailers gain a new understanding at the intersection of customer desires and digital possibilities.
How do we do this? We listen. App Store feedback, Net Promoter Score surveys, customer service call reports, and in-app feedback are all good ways to gauge customer purchase behavior. Sales and Marketing teams can view this and other explicit feedback and analyze it over time.
Yet implicit feedback counts as well. Gaps in the customer experience are reflections of unmet needs. Customers may even tell you what they see in other brands, or what they wish they had in yours.
We live in an age when data scientists are able to assemble information about user actions to reveal intricate behavioral patterns. Amplitude and other analytical tools are effective drivers of a product’s discovery engine. The use of A/B testing, behavioral cohort analysis, usage pattern correlation, and other techniques gives analysts powerful new insights towards unbounded and bracket retention. These fresh inferences allow teams to iterate products and services in ways that align with the value perception and conversion strategies of the retail brand. It lets them tweak UX, enhance service features, fix bugs, and execute push strategies that reduce drop-offs and further refine product roadmaps.
Today, consumers visiting a brand’s digital touchpoints face information overload. Mweb solutions can be a huge driver for customer acquisition and conversion if done right—but native apps cater to brand use cases and creating higher lifetime value. It’s critical to delineate these two experiences and use them wisely.
Machine learning, as an analytical technique, is making huge strides in this regard. I like what Qubit is doing; the company’s AI is able to understand what outbound actions by a retailer influence results—as well as which actions can be ignored. Its conclusions, for instance, can be used to match activity against promoted products, execute cross-selling, or drive recommended tags in mweb applications.
Brands are also realizing they can offer an elevated, personalized experience by processing customer interaction through their digital streams. The Nordstrom Local concept, recently announced, emphasizes style consulting over in-store stock. Wine, beer, espresso, and even manicures provide a memorable customer service while behind-the-scenes logistics drive product delivery.
Another approach is to enable seamless customer decision-making. One of my colleagues recently referred me to Brandless, an e-tail concept that essentially normalizes food, personal care, cleaning supplies, and other products to a single $3.00 price point. Brandless streamlines the shopper’s purchase decision by learning customer values, preferences, and requirements; it then responds with top-quality generic products that match those preferences. In so doing it’s essentially acting as a surrogate for the customer with regard to ingredients, point of origin, and manufacturing, providing transparency about each product it sells.
All said, it’s both an exciting and challenging time to be in retail. The process of identifying gaps, and then experimenting with what will work in niche segments, is blazing new trails. Eventually, it will redefine the very nature of the customer relationship—and give CIOs answers to all those questions they’ve been asking.