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Avoiding Darwinian retail: How retailers can stay relevant and thrive

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We hear so much about the death of the high street, but it still surprises me how many big brand names have failed to evolve in order to meet shifting customer expectations and continue to deliver a mixed customer experience. 

The mantra of retail has always been ‘the customer is always right,’ but many retailers seem to forget, that, in this digital age, customer expectations are constantly shifting. Customers expect their interactions with all channels of a brand to be cohesive, giving them a consistent experience while moving across those channels.

This sounds rather obvious, but is something that is not always followed.

Clean up on aisle nine: Time to sweep away bad CX

Recently, I went into a reasonably sized branch of a very large pharmacy chain during my lunch break to pick up a click and collect order. It was a painful experience as a customer.

The first issue was that there was no indication of where I could collect my order in the store, so I spent the first few minutes wandering around to see if there was a dedicated click and collect counter, or any sign that would point me to the correct counter. 

The store has multiple counters for picking up a prescription, buying medicine, developing photos, or buying health and beauty items. Most of these counters had big queues, so it was a matter of taking a gamble and choosing one of them. Surely indicating to customers where they can pick up click and collect orders is an obvious and easy thing to do.

Every square foot in a retail store is valuable, so I understand why some retailers are reluctant to dedicate precious space to a dedicated click and collect counter, but as this delivery method is becoming bigger and bigger for most multi/omni-channel retailers, the argument against a click and collect counter is becoming less valid.

I took a punt, joining the long health and beauty checkout queue manned by only 2 cashiers, which turned out to be the right choice. After queuing for a while, I reached the counter, gave the cashier my details, and she disappeared for ten minutes before coming back with my collection (maybe she actually drove to the warehouse for me). In the meantime, the queue got bigger and bigger (it was lunchtime after all) with the other people in line behind me giving me very dirty looks for causing such a commotion.

The whole experience was painful and took around 20 minutes. There really is no excuse to provide such a poor CX. Click and collect is not exactly a new thing, and it would so easy to make this experience better. If I had known how bad it would be, I would probably have opted to pay £3.50 for delivery to avoid the experience.

This is just one example of a multi-channel retailer where the different channels are poorly joined together. I don’t see the online and in-store operations of this retailer as different brands or entities. In my mind, they are simply one company.  However, in this case, picking up an online order in-store felt like an inconvenience and an afterthought.

Darwinian retail: If you don’t adapt, you won’t exist

A news segment about the number of retail brands that have either failed, or have had to reduce the number of branches that they have – ultimately causing many staff to lose their jobs – caught my attention recently. The reporter was interviewing a store manager from a large retailer who said that he ‘disagrees with online retail’ as it causes branches to close and people to lose their jobs. It struck me that he was effectively saying that he disagrees with how customers want to shop, which is a strategy that is ultimately doomed to fail.

Whilst it is obviously very sad when any retailer meets their demise, and people lose their jobs, I do not believe that you can blame the online world for the failure of a retailer, since online is simply providing customers with the experience that they want. 

Generally, the blame lies with either unfortunate circumstances or the management of the retailer themselves. When you look at high-profile UK retailers that have recently failed, it is clear that many of them did not stay relevant or adapt. They have not stayed in touch with what their customers want, or how customer expectations have shifted. 

The basis of Charles Darwin’s theory of evolution is the ability to adapt to changing surroundings. Animals and plants that can adapt to these changes tend to thrive, and those that do not tend to disappear. Surely, the same can be applied to retail. If a retailer fails to adapt to a changing retail environment and shifting customer expectations, it cannot expect to thrive or even survive.

Whilst there is a growing list of retailers that have failed to adapt and are suffering, there is also a growing list of retailers that have adapted to match the changing expectations of customers. Argos in the UK is a great example. Ten years ago, many people would have looked at the Argos business model and predicted the company to become irrelevant by now. Argos embraced online very early on; bringing together their in-store and online channels. They now provide a smooth customer experience and continue to remain relevant in a very competitive market.

Nordstrom is another great example. Having been around for over 100 years, they could have rested on their ‘traditional’ laurels, instead evolved with the changing expectations of their customers. Nordstrom is now one of the leading omni-channel retailers within the fashion industry.

How retailers can stay relevant: It’s all about customer experience

The key to staying relevant is listening to customers and adapting your business model to match their changing expectations, even if the process is painful. In my click and collect example above, I expected the experience of collecting my online purchase in-store to be as seamless as the ordering process, not to take 20 minutes, or to attract death stares from other customers. This is a perfect example of a traditional retailer failing to adapt to the omni-channel model. Next time, I’ll probably just use Amazon.

There is a very good reason why we all buy so much from Amazon – whatever you may think of them. We can easily find products at a competitive price and have them delivered for free the next day; even on a Sunday. That is a great customer experience.

This is obviously quite hard for many retailers to match, as they don’t necessarily have the huge infrastructure that Amazon possesses, but there are plenty of ways retailers can stay relevant by listening to customers and embracing the shift in expectations rather than fighting against it. 

Investment in digital as well as omni-channel capabilities is an obvious need. Customers want and expect to be able to seamlessly move across the different channels that a brand operates in. You can pretty much guarantee that when physical Amazon stores become more prevalent, they will be fully joined up with the online business. You will probably be able to use the Amazon app to automatically identify yourself and use your Prime account for seamless payment. I’m also guessing that you will then see your in-store purchases on your online account.

Eventually, I expect most successful retailers to become digital businesses. Physical stores will always have their place, but I think the focus will shift from directly selling in-store to becoming more of a hybrid store and showroom where people can see and try items, as well as being a place for people to collect ordered items. They will shift from multi-channel to omni-channel, or you could even think of it as becoming a single channel: Digital. Every order will be digital, no matter where it is placed.

This does not necessarily mean the death of the high street, but it certainly means an evolution.

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Branwell Moffat
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December 13, 2018
Branwell Moffat

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