Laying the Groundwork for Retail Innovation 2
Complacency has Enabled a Retail Transformation
Just Not for All
While Virgil once said “the road to hell may be paved with good intentions”, the path to irrelevance nowadays is certainly littered with the remnants of slow-moving retailers and hollowed out shopping malls. And if you look purely at store closings, you could easily believe that retail as we know it is coming to an end.
Well, retail as we knew it has already come to an end, but the retail industry is far from over. If anything, there’s been a complete revitalisation of the retail market – it just didn’t affect every retailer equally. Far from it.
Apocalypse or Societal Shift?
Part of what has fueled the erroneous belief in a “retail apocalypse” is the fact that so many well-established retailers that have already closed or are in the process of doing so haven’t been able to adapt themselves to how customers want to learn about, engage, and experience brands. And article after article creates a perception that eCommerce “killed” physical retail or that these long-standing retailers are somehow the victims in this situation, when really reduced discretionary income, leveraged buyouts, and perhaps too many large stores are equally if not more responsible.
But the truth is that no matter what industry you’re in, if you don’t change eventually someone will come along and do a better job than you. More than a century ago, when the horse was king, owning stables was a great business to be in. But the automobile changed all that. And if you didn’t adjust, you were left behind.
Much like the societal shift to the automobile, the new retail environment requires not just a transformation of your business, but a complete and likely continuous reinvention. What I mean by this is, it’s not enough to have a retail store and add a website. That’s a transformation, but won’t be enough to weather this sea change in consumer expectations.
If You’re Doing the Same Thing, You’re Falling Behind
Retailers need to re-engineer their experiences and even themselves, relying on a better understanding of how the various elements of the customer journey can guide consumers to their products time and time again to build an ongoing relationship, rather than maintain a transactional mindset that can easily be replaced by the lowest bidder. And it is here where eCommerce has been displacing existing retailers, not the ones with amazing experiences, but the ones where generic products and low prices are bundled with the convenience of free shipping.
In order to navigate this shift, retailers can focus on the information that’s right in front of them – no invention of the next major mode of human transportation required. Customers provide a treasure trove of data, both in terms of what is working well and where your customer journey is failing. Developing the mechanisms to collect that information is valuable. Although obvious, communication data is an example of relevant information that is often overlooked or just not possible to include as part of the complete analysis of the customer journey.
Consumers Know What They Want, You Just Have to Listen
In an age when self-service is king, both online and in store, having a customer take the time and effort to interact can raise some serious red flags. They can point out errors on your website, contradicting statements in marketing materials, or even things your competitors are doing that you might not be aware of. You just need to start listening.
Take for example if Blockbuster had realized how much their, profitable yet despised, late fees were. Maybe they could have pivoted to a new way to maintain their core service: get customers watching their movies. Instead, their poor customer experience led to the creation of their rival, and ultimately their demise.
And more than just a method to capture complaints, customers are willing to offer free advice that would cost big bucks from management consulting firms. The key is capturing it and using it to shape the experience in a way that benefits you and the customer. This could be as simple as asking customers why they called your store or analysing the most frequent choices among consumers when looking for information. Using that information, you can create mass efficiencies for you and the customer, for example, as simple as putting store hours as the first thing caller hears, since 40% of callers ask for that, or as intricate as incorporating your contact centre to provide instant experts rather than generalists in your stores.
Laying the Groundwork for Innovation
Peter Drucker, the esteemed business educator, writer, and guru, said that business has two primary goals: marketing and innovation. In order to be successful at either you need to create an environment that is able to quickly adapt to changing needs based on the insight from all of your customer interactions collectively.
Customers may not always give you the answers, but often they ask the question that you hadn’t thought of or point out the problems that may be invisible to you. The key is to create the mechanisms to collect that feedback and unburden yourself from the processes, systems, and preconceived notions that are holding you back.
This requires creating an environment where feedback can be quickly ingested, processed, and utilized, which is difficult across a distributed, highly transactional organization. But technology has created the ability to scale this analysis, using transcription and natural language processing to better understand customer sentiment and more quickly escalate issues that present themselves. The dynamic has been completely reversed: the data collection that was too labor intensive is now automated, and what required human understanding is now technology driven.
In this new world, retailers need to elevate their thinking beyond what the data is saying and understand where the trends are headed. For example, 8x8’s Speech Analytics automatically captures and analyses 100% of calls to instantly provide sentiment analysis. And, it’s up and running in minutes using templates developed with the industry leader in speech analytics combined with decades of experience. So, there’s no obstacle to getting started today.
Retail is a Journey, Not a Destination
If the last decade has taught us anything, it is that retailers that are able to adapt will stay relevant. And you don’t need to be a digital native to do so. In the US, recent moves by Macy’s and Best Buy, once looking like they would be replaced by eCommerce, show that they are willing to experiment and change their traditional thinking in order to not only survive but excel.
This trend isn’t going to change any time soon. We’re a decade into the mass closing of retail stores and 2018 will again be a banner year. But just as many retailers are expanding, many times establishing a physical presence for the first time. The key is not to get confined to the one area where you currently are. Because that’s the surest way to be left behind.
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