BrainTrust Query: What Will It Take to Succeed in 2013?
Through a special arrangement, presented here for discussion is a summary of an article from the Retail Doctor’s blog.
NRF is behind us, arguably the center of what’s happening in retail. I realize many retailers will want to address the big trends using technology. But success must come from being more human, selling the merchandise in a way that provides an exceptional in-store experience and acknowledging that no retailer has a lock on a product, customer or category.
Here are the top 11 retail trends I think stores need to know:
Thriftiness is the new high. Spurred by Millennials who shop more like Boomers’ grandparents, the deal and how much money was saved becomes the bragging point. Customers looking only for a cheap price need associates who can show the value of the premium goods.
Customers are more prepared. Many customers will have done their research before walking into a store looking for one single item. Having an associate who can build rapport and who knows their product will often lead the customer to something even better.
Less is more in design and shopping. Retail stores no longer need to be filled to the brim. Customers are easily distracted and frustrated with too many choices.
Using your store as a showroom for online retailers. Shoppers using their smartphones or opening an app need to be engaged, not ignored.
Generational divides within the labor force. Make sure to train your Millennial employees to relate to Boomers.
Staffing cuts. A retail store designed to work on eight employees but reduced to a skeleton crew tosses customer service into the garbage, while theft from both inside and outside increases.
Customers are coming in with blinders on. With their shoppers embracing technology, both in-hand and in ears, stores must find a way to break through the electronic wall customers are accessing as they walk through your store.
Amazon. Sales tax is a non-issue; the fact more people search there first is. Google is worried that more people are starting their search on Amazon, not on Google. This should certainly worry you.
Stalking customers through Big Data. Dynamic content will further evolve and become so personalized it will be able to suggest the best add-ons for customers to buy online, not just what they’ve searched for.
Products will find their way to customers in unconventional places. Products, advertised on billboards, kiosks and subway platforms, will now be purchasable with a smartphone while waiting for a subway, strolling on a parkway, or looking at a skyscraper. Disposable income will be affected as customers make spontaneous purchases.
There’s just no time. Customers are so time-crunched that browsing isn’t seen as an option. When a customer comes in for that one item, associates must find a way to open the entire store to their consideration.
- 12 Retail Industry Trends For 2013 – The Retail Doctor
- 5 Trends That Will Cause Bricks and Mortar Retailers To Lose Sleep in 2013 – The Retail Doctor
- What Every Retailer Needs To Know About The Millennial Generation – The Retail Doctor
- Generation Gap Special Report: Why Premium Brands Are Stuck – The Retail Doctor
Discussion Questions
What are some obvious and less obvious retail trends that you think will play out in 2013? Which of those mentioned in the article do you think will be most influential?
Closed-loop stored value accounts is a less obvious retail trend I think will take off. Expect to see a shift from PVC key chains/cards to mobile apps similar to Starbucks prepaid program.
The ability to prevent external showrooming, capture purchase history and automated coupon collecting and discounting will drive this trend in 2013.
The above are all good ideas. However, they address only the sales floor issues. Financially, I’m seeing stores that own their buildings, not rent, have non union labor or are employee owned, and never have debt or use debt to expand. Debt, rent, and union labor are handcuffs; they are making retailers helpless to fight back against the financially strong competitors.
First let me say I wasn’t aware Boomers were so thrifty. Now their grandparents on the other hand … but I digress.
The real issue is that retailers have to learn how to differentiate themselves in ways that are meaningful to their customers. The problem with retail is that it’s beige and unexciting.
Why not go to Amazon if every offer is the same?
My other thought is that I would love to see 2013 be a year in which we didn’t create lists and taxonomies for defining and predicting consumer behavior and instead got back to the idea of knowing the customer as a human being—whether that’s through better use of big data or better trained frontline sales associates.
Many of these themes don’t quite resonate with me. For example, I think retailers in general will no longer “stalk us” with big data…they’ll stalk us with irrelevant re-targeting instead.
Somehow the payments notion has been missed. I think PayPal will dominate…it’s all software, no chip required.
Second, I was really impressed with eBay local at the NRF show. I think same day delivery will be a niche space, but when the booth folks said “we can deliver right to your hotel a lightbulb went on. Forgot your charging cable? Need a tie quick? Bang. It can be brought to your door. I liked it.
Just one other woman’s opinion.
Other key trends that played out in 2012 were pricing gamesmanship, immediate accessibility and possibly the creation of retail regret.
With creative use of technology and also print, we have molded consumer minds to believe that what we sell must always be discounted for it to equate to its true value. Does that spell future regret?
After many meetings at NRF, the common noise is tighter inventory control and getting more technology into the hands of the store teams. This is tech that they use in their everyday lives and would want to use at the stores in their jobs. Also lots of demand for the tighter or stronger relationships between the retailer and their shoppers.
Big Data and shoppers was not as much of an issue—it is already accepted as a must do—thus the fluff and noise factor is fading. Big Data or granularity is expanding quickly into areas like LP and inventory control.
Using technology to keep the human element in retail is critical. What do YOUR customers want to purchase, in what kind of environment, with what kind of assistance, at what price? Whatever you do is just a shot in the dark if you cannot answer these questions. Technology needs to make your strategy more human.
Smarter shoppers with more choices is not a good trend for a retailer who is just average. Average retailers must step up the game in 2013. I believe most critical imperative that retailers must address in the coming year is finding a way to be “value” competitive, that is consistently staying close on price, but also providing other benefits to customers such as knowledge, service, and ease of purchase that enter in to the value equation.
I would also vote for more science being used in terms of store layout, assortment, and shopper traffic flow. As online stores build easy-to-navigate purchasing experiences, so must those with physical stores. There is much opportunity here.
Lastly, build a useable and accessible customer database that inherently provides the retailer a competitive edge in understanding shopper needs and delivering those needs along the path to purchase. You can not effectively communicate with shoppers unless you know who they are and where they are in the purchase-decision process.
Less is more is the watch phrase for 2013. All 11 of these points are terrific and great insight. Embracing show rooming and coming to terms with the fact that the digitally empowered shopper is far better informed and prepared than your reduced sales staff should dictate the type of programs and initiatives retailers should be designing and activating. On behalf of all of us, I would also suggest that engaging consultants that will help provide you unbiased clarity and sound guidance. Your agencies have, and always will tell you they have the expertise. Really?
If there was one item that will help guide success for any initiative moving forward, it would be transparency. Your shoppers and customers are smart, and getting smarter. Respect them and their perspective. Assume your brand lives in a glass house for all to see.
Nice work, Bob. Whether it’s through staff, technology or better business processes like improved inventory management, the biggest trend will be that retailing is getting better and better. Consumers have never had it so good!
As mentioned above, Bob’s points mainly focus on staff. And I would argue they should. Staff is more important now than ever before. You can implement every technology possible, but in the end, retail is a human business. People are social and need to engage with other people. The fact the customers have access to so much technology and information may make them more knowledgeable and demanding … but it doesn’t make them less human.
So, pity the retailer that ignores the importance of providing a properly trained and available staff at store level to engage with their customers.
I think the juxtaposition between staffing cuts and a need for more human-based experiences in retail environments is one of the 2013 bigger issues. If we continue to cut associates (perhaps even to fund technology) and allow shoppers to create their own experiences with smartphones and other technology, we will soon find ourselves too far down the chute to make any kind of effective return.
Beginning the shopping excursion on Amazon versus Google should scare anyone in retail, but as Jeff Bezos stated as he received the NRF award last week, “the number one job is to create a superior customer experience.” Many other retailers might do well to take the scare as a mission to work on customer experience as well.
I think part of the untold trend story is that human influence continues to happen more often in a face-to-face environment. The shift in numbers to more digital influence is perhaps rising because “we’ve made it so”—as the investment in human influence at retail continues to decline.
Retailers’ biggest challenge in 2013 is to remain relevant. In an environment where a customer can order two replacement iPhone cables from China and the total bill is $3.98, including free shipping, competitors are going to have some work to do. The big story at the NRF show was customer engagement, and we’ll be talking about it all year.
Price is still the KING. Just ask Walmart how much price means to them, as they continue to pursue as many customers as they can. Service must be maintained, if that is what built your business, because the customers don’t want to be cheated out of something they expect from your store. The mobile phone issue is still in the infancy of what it will eventually become, but it shouldn’t be ignored.
Keep developing the signature items or unique services that the BIG BOX stores will not do, as this is where you can gain some profits. Keep promoting in all types of media; print, e-mails, Twitter, kiosks, Facebook and lots of networking. Never ever gouge the consumer, as they will find a better deal pretty quickly somewhere else.
Make sure you try your best to keep your employees engaged in the customer service process, as this is key to maintain the relationships with your customers.
I wish all of you the best in 2013, as it is going to be very, very difficult to grow profits.
While these are all good points, retail stores need to know that consumers enter their stores with several different mindsets that involve different levels of interaction. Retailers need to identify these service cycles and design experiences around them.
The title of this article asks, “What will it take to succeed in 2013,” while the questions posed ask what I feel is something different, referring to trends. The article is actually a mix of both trends and critical success factors.
So, as for trends, I like TRENDWATCHING.com’s take.
As far as what it will take for success in 2013, I think the following hold true, based upon over 1500 CEO face-to-face interviews around the world:
These are only a few aspects of what I believe will help ensure success this year. I’d like this conversation to continue in further articles.
The Retail Doctor has laid out several powerful areas of focus for retailers. Retailers have to take their cue from the consumer. Taking it from the view of the consumer, the trends that they are demanding and/or need are:
I think that addressing the size and quality of the physical box will be and is a huge issue for retailers going forward. With online shopping hanging over their heads (their own and the competition’s), retailers will be pressed to upgrade both the size and content of their boxes just to compete, or even give a reason to go. This will be on-going for quite some time as changing (and closing) these expensive assets will not be easy—but a customer driven ‘must do’ nonetheless.
The “Amazon” issue is the biggest trend mentioned above, IMO. They have the ability to change all of the others mentioned, especially if they improve their grocery offering. Because, thanks to Walmart, we now know that every day/week trips for food can drive all other categories.
My top 3 trends that successful retailers will use include:
The most obvious trend is an acceleration of innovation. The not so obvious trend is how we adjust our business models to accomplish this transformation. Just as Walmart acquired talent to staff their Walmart labs, I predict the best firms will get into partnering, alliances and licensing deals with boutiques and talent that can help with the journey.
I liked the following from your article: “Less is more in design and shopping” for obvious and not so obvious reasons.