Retail is changing at a rapid clip—and from the ever-increasing list of bankruptcies and surprise break outs, it’s clear that a new retail playbook is required to make sense of (and more than a few cents in) the industry.
Many of the big box retailers of yesteryear are on their way out, if they don’t make significant changes, that is. No shopper wants to wander aisles searching for an elusive store employee when they have questions. Why bother, especially when they could open up Amazon or Google, type in what they want, choose a product based on (mostly) genuine customer reviews, and have it on their doorstep in a couple of days?
The new retail reality requires the ability to take calculated risks to differentiate and get ahead.
Adapt or die: retailers face the music
There are currently two factions in retail: the legacy retailers and brands that are trying to repaint a rusty old car versus newcomers and more adaptable retailers who are ready to scrap what isn’t working and rebuild from the ground up.
These two groups are hard to reconcile because the former believes that tweaking something with structural issues is going to yield new results. And that simply isn’t how things work. The new paint might look nice for a period of time, but it won’t be a surprise when that old car breaks down at the least opportune moment.
Retailers and brands that got comfortable in the status quo are out of luck in the new retail reality. “Build it and they will come” no longer applies.
Shoppers don’t want products pushed on them by salespeople whose primary concern is meeting a quota. In fact, 71 percent of consumers reported being “frustrated by impersonal shopping experiences.” This extends to online retail as well. Product pages should be more than a print catalogue transferred to the internet. With user generated content, product videos, and robust customer reviews becoming commonplace, shoppers expect more.
Authentic personalization has gained steam in retail. We’re moving back to an era in retail in which customers crave efficiency and connection. They want to see a brand’s organic posts on Instagram, chat with a sales associate about trendy products, and be notified of product launches that cater to their lifestyle. In this way, customers are multitouch and retail offerings must rise to the occasion.
Stop, collaborate, and listen: Amazon Go means retailers must get serious about CX
Some retail behemoths and newcomers alike are already successfully competing in the new retail reality. They are opening showrooms (see Nordstrom, Everlane, Warby Parker), trying out subscription services (like Target, Old Navy), partnering with designers, and shoring up their product delivery offerings (ship to store can lead to add-on impulse buys, after all).
These retail experiments don’t come cheap, but neither does bankruptcy. While that may seem a bit harsh, retail has simply become a sink or swim industry. Staying stagnant is not an option.
As always, Amazon has been at the forefront of the new reality. One could even argue that as such a vocally customer-focused company, they have really listened and are leading the charge to improve just about every facet of the customer experience. Amazon Go is one of the most innovative concepts Amazon has debuted recently, and it has been putting other retailers under immense pressure to address customer pain points in novel ways.
While Amazon isn’t rolling out their checkout-free tech to other retailers just yet, competitors are trying to beat them to the punch. It might seem like an expensive investment, but the overwhelmingly positive feedback Amazon Go has received thus far is a testament to the importance of convenience for shoppers.
In order to make Amazon Go a long term success, Amazon will need to continue to perfect the combination of convenience and engrained trust. The idea of not having to wait in line is that much sweeter when customers don’t have to worry that they will be charged for something they didn’t put into their bag.
As backwards as it might sound, the businesses that will win in this new retail reality are the ones that cool it on the sales front. Shoppers want an experience beyond another BOGO sale. Experiential retail has become a buzzword in the industry, but that doesn’t mean that the majority of retailers are doing it properly just yet. Fostering customer relationships takes time, money, and effort.
This year’s winners in the retail reality will provide shoppers with more than just products. They will offer convenience, connection, and a reason to return to their brand. Figuring out how to incorporate these factors in an authentic and unique way will be the challenge, but luckily there are a number of brands and retailers to look to for inspiration.
