BrainTrust Query: Don't Fall Behind Waiting for the Rebound
I recently participated in a RIS News webinar titled "2010 Rebound Strategies: A Retail Symposium." As a panelist, I gave some advice that I think merits repeating here. Retailers need to continue innovating, regardless of the economy. Those that do will be better positioned when the "retail rebound" occurs.
Shown below are four forces that are reshaping the retail industry:
Web 2.0/Social: People tend to trust their network of friends for reviews and advice, and social media is making it easier for them to communicate. So its paramount that retailers enter the conversation. I have a friend that had a bad experience at BestBuy. He complained to BestBuy via Twitter, and when he didn't get satisfaction he wrote about it in his blog and tweeted to his 3000 followers. One mistake was amplified and the brand was damaged. Retailers need to invest in their social media efforts.
Mobile Devices: I think there are some great opportunities to connect to customers via their mobile phone. Starbucks has iPhone applications that let users find the nearest store or manage their prepaid account. Pizza Hut claims to have driven $1M in incremental sales via their iPhone application. When phones are equipped with Near-field-communications, things will get really interesting.
Global Economy: In terms of the Global Economy, much of the growth is occurring outside North America so our systems need to be internationalized, which is no small task. But there have been some failures overseas because the cookie-cutter approach doesn't always work. Localized assortments and the ability to capitalize on local trends are crucial to success.
Demographics: Lastly, today's consumers shop differently. E-commerce has increased expectations for having vast product information, endless aisles, and personalized recommendations. To satisfy these needs cost-effectively, stores will need more self-checkout, kiosks, and loyalty programs that cater to the consumer.
So how do we prepare for the rebound?
Retailers should at least be experimenting in each of these four areas, because when retail rebounds it will be forever changed. It's important to iterate often: succeed or fail quickly, and foster risk-taking by employees. Those that continue to innovate will pass by those that don't.
Discussion Questions: Of the four forces reshaping retail mentioned in the article (Web 2.0/social, mobile devices, global economy, demographics), which ones should be most emphasized as stores prepare for the rebound? Are any major forces missing from the list?