The New Retail Evolution Part 2
Read the first part of The New Retail Evolution here.
WHAT CAN RETAILERS DO TO THRIVE & SUCCEED?
CUSTOMIZATION, ADAPTABILITY, PERSONALIZATION, ENGAGEMENT, & DIFFERENTIATION, OR C.A.P.E.D.
CUSTOMIZATION is the wave of the future. In the digital world we live in today, the customer is developing an insatiable appetite for custom made products which they are “expecting” their retail stores to provide for them. If large retailers are unable or unwilling to assent, consumers are going to take their wallets to other viable, alternative options. This could be an opportunity for smaller independent retailers who can capitalize on the customization niche.
“The innovative concept of using technology to create bespoke products is still in an embryonic stage at most big-box retailers.”
Traditionally, many larger retailers have been extremely slow in reacting to emerging trends within the retail space. The innovative concept of using technology to create bespoke products is still in an embryonic stage at most big-box retailers. The customization method is another touchpoint where shoppers can intermingle with a brand, while data about that customer can be collected, which provides the retailer with information to further customize their product/experience. Retailers should approach the customization movement from the perspective of reimagining the customer experience through the idea of on-demand manufacturing and 3D printing capabilities which will create an exhilarating new retail world.
ADAPTABILITY- How fast can your retail store/organization adjust and pivot when you see future trends??? Retail leaders must be able to foresee the future by being proactive before it becomes mandatory. The retail sector is analogous to the motto of a cornerback covering a wide receiver in football; “if he’s even he’s leaving.” This means if you wait until everyone else is changing, you could be too late and might not be able to recover in time. All retailers should: ?Anticipate ?Forecast ?React ?Implement ?Execute.
PERSONALIZATION– are you truly listening to your customers? Are you asking for and seeking feedback about their needs? An upset customer can be a “microcosm” about specific issues that you are unaware of in your company. They can provide you with a treasure trove of valuable information that you can utilize to implement changes. Retailers must become fanatical about addressing and correcting disgruntled customer issues!!! Over 90% of unhappy customers won’t complain to you, but they will tell 15 friends about their bad experience.
“Your methods should be Sincere, Authentic, and Genuine. Remember the acronym of S.A.G.”
Personalization is the key to building loyal followings and retaining customers in business. Whenever possible, treat every customer like the unique individual they are, not like a group of people or a segment of customers. Your methods should be Sincere, Authentic, and Genuine. Remember the acronym of S.A.G. A one-step generic approach should be avoided at all costs.
ENGAGEMENT- How well do you engage with your customers, employee’s, leaders, and yes, your vendors. Engagement is the big brother of personalization! It is often overlooked because many leaders get lost in its simplicity. How would your customers rate your service levels? Are you utilizing customer surveys? Are you performing exit interviews with your patrons? Exit interviews are an excellent method to gauge your customer’s satisfaction level on the spot which also gives you the opportunity to address and correct any negative experiences they experienced. TIP!!! Offer your guests a small reward for 5 minutes of their time i.e. a gift card, a free service, or an upgrade.
How would your employee’s rate their satisfaction with working for your business? In this extremely tight labor market, good employees are becoming scarce. Having healthy communication channels available for employees to share their ideas, concerns, and goals is paramount to their happiness. Are you taking care of your leaders? Many retailers only show their appreciation through financial methods i.e. salary, stock options, and bonuses. These incentives are appreciated however, time is the most valuable asset to leaders. Retailers should shift their paradigm to encapsulate work/life balances for their leaders.
Some retailers forget about vendors being part of their family. Do you include your vendors in barbeques you have for your company? Are they invited to holiday parties? I would highly recommend whenever possible, to practice inclusion with your vendors. These relationships are critical to the success of your business and should be treated as such.
DIFFERENTIATION– The message is “what separates your organization” from your competition??? What do you want to be known for? Is it exclusivity, bespoke services, price, quality, sustainability, or selection? You can choose more than one strategy to go after. The key differentiator is whichever strategies you select, you must make sure you can deliver and dominate within those niches. One of the major pitfalls that happen to many retailers is that they attempt to be great at everything. This type of thinking and planning is shortsighted because of the massive investment of energy, time, and resources that are required to be the best at everything. No retailer can dominate all categories, so choose wisely!!!
“With proprietary brands & services, the retailer is in control of the pricing, cost structure, quality, nimbleness, exclusivity, and brand loyalty.”
One of the most effective differentiators is through the usage of proprietary brands & services within your company’s product assortment. Proprietary brands & services are privately-owned and controlled which are exclusive to a retailer’s portfolio of products AND are only able to be purchased at their organization. With proprietary brands & services, the retailer is in control of the pricing, cost structure, quality, nimbleness, exclusivity, and brand loyalty.
Another powerful differentiator is do you stand behind your products? Consumers want to allocate their dollars to organizations who will stand behind their products which allow them a reasonable time frame to return/exchange their items. Unfortunately, there is a growing trend with some retailers towards “planned obsolescence” (a policy of producing consumer goods that rapidly become obsolete and require replacing.) This is happening far too often with extremely reputable brands! These retailers’ products are breaking down prematurely which is perpetuating massive trepidation among consumers to continue to blindly offer their patronage. Reliability, dependability, and longevity are the new metrics of consumer loyalty.