What does it take for retailers to thrive amid shifting consumer preferences?

Discussion
Photo: Retail Touchpoints
Jun 08, 2017
Glenn Taylor

Through a special arrangement, presented here for discussion is a summary of a current article from the Retail TouchPoints website.

In a presentation during the 2017 Retail Innovation Conference, Josh Wais, emerging technology and strategy lead at Jet.com, shared five key takeaways he felt retailers must follow if they want to survive and thrive in the midst of these constantly shifting consumer preferences.

  1. Go Where Others Aren’t

“In the past, location was that,” Mr. Wais said. “We could have region differences in our footprint and we wouldn’t be competing with others. Today it has to be through your value proposition and the role that you fit in the lives of your customers. You have to think about how that’s unique, and how that’s going to serve not everyone, but your particular customers in a way that they’re going to choose you rather than one-click away choosing someone else.”

  1. Experience

“There’s always been a lot of talk about experience since it’s a fairly obvious one,” Mr. Wais noted. “What’s different now, is that you didn’t have to compete with experience. Your experience could frankly be pretty poor and you’d still be okay.”

  1. Try To Capture The Entire Lifeline Of The Customer, Rather Than One Transaction.

“You might lose money on your first transaction, but it’s worth it if you can get that customer to keep coming back, because that’s going to be the new normal,” Mr. Wais said.

  1. Delivery

Mr. Wais said, “As all categories start to move online, fast isn’t always necessarily what you need, and fast is really expensive. We’re going to hear more about blended fulfillment; being able to use traditional online methods with in-store methods to be able to do pickup, or even have a store hand it off to an Uber driver that can take it to your house.”

  1. Act Early

Mr. Wais said, “If you don’t do it now, you are going to have to pay a lot more to acquire those customers and to invest in your experiences that will lead to repeat customers later on. Even though it’s always scary to invest a lot of money, if there’s a time to do it, now is the time.”

DISCUSSION QUESTIONSWhich takeaways from the article do you think are most important? Which is the most frequently neglected by retailers?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"...the reason department stores are so challenged right now (well, one of them) is that they are not at all specific."
"To me it’s “Act Early.” The rule in retail used to be Fast Second, in that you would let someone else find out the hard way..."
"It is disappointing to see how many lists like this omit products. Retail only exists to sell product."

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29 Comments on "What does it take for retailers to thrive amid shifting consumer preferences?"


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Jon Polin
BrainTrust

While some of these points resonate with me more than others, they generally ladder up to one general point: retailers must embrace change and adapt to it rather than ignore it. This may sound obvious, but we all know some retailers who are guilty of having their heads in the sand (you know who you are, certain grocery chains!).

Adrian Weidmann
BrainTrust

Brands (and retailers) need to create, develop and maintain a ‘customer for life’ strategy. Meile- the European appliance giant – implemented this strategy years ago. Their philosophy was based on a simple case study- if and when a young couple purchased their first stackable washer/dryer for their apartment, it was Meile’s responsibility (and fault!) if those two individuals ever purchased another washer/dryer brand for the rest of their lives. This strategy can only be implemented by understanding your shopper AND customer journey- before, during and after the purchase. Meaningful communication and quality customer service and experience is simply the ante to succeeding at this strategy- yet imperative to survive and thrive.

Max Goldberg
Guest

All of the points are salient, however, I would disagree with the statement, “…that you didn’t have to compete with experience. Your experience could frankly be pretty poor and you’d still be okay.” In the era of social media, a bad experience will be quickly communicated and could damage image and sales.

The point of acting early is most frequently neglected by retailers. Mr. Wais’s point that it’s scary to invest a lot of money is accurate. That fear holds back many retailers from doing things that might improve their businesses.

Mark Ryski
BrainTrust

All points mentioned have merit, but one I think retailers need to really consider is the first point ‘Go Where Others Aren’t’. Differentiation seems to be a lost art. There is so much overlap and “sameness” today, retailers need to find ways to create meaningful differentiation. The other point I think is worth noting is ‘Experience.’ While customer experience has always been an important topic for retailers, it was largely focused on the in-store experience. Today, “experience” encompasses a much broader range of customer interactions which makes it significantly more challenging to manage and effectively deliver. Most neglected? That’s easy…’Act Early.’

Paula Rosenblum
BrainTrust

I take the word “experience” to also mean “be specific” — the reason department stores are so challenged right now (well, one of them) is that they are not at all specific. They’re general stores for clothes. “Lifestyle pods” would work so much better than “departments” and brands. At least that’s what I think.

Meaghan Brophy
BrainTrust
Meaghan Brophy
Senior Retail Writer
2 years 5 months ago

Agreed. Retail is fragmenting, partially because the barrier to entry is lower than ever. In order to be successful, you have to be an expert or leader in a particular category.

Dave Bruno
BrainTrust

I agree, Paula! There are so many options, so many variations to “experiences.” In our client base, those that are performing the best typically have a specific vision for their brand experience, and they make all decisions in context of that specific vision. All of the points of the article from Glenn are valid, but if they aren’t aligned to a specific vision (and strategy), they are doomed to mediocrity, at best, in my opinion.

Phil Masiello
BrainTrust
In my mind, the most important concept that retailers miss is the third point of capturing the lifetime value of a customer vs a single transaction. I try to make this point with many of my clients. When you build customers, you don’t fear competitors. If you continually focus on your customers, what they need and love, then it doesn’t matter who opens a store down the street or sets up a website. You know you have done your job well when the competitors open and you don’t lose any sales. You always want to be aware of your competition, but not let them drive your decisions. Wegmans is not affected by another supermarket opening down the street but the opposite is not true. Amazon is not affected by another website starting up, no matter how much hype is around it. Both have loyal customers who trust them because they continue to add value throughout the customers long term. Most retailers do not have customers, they have transactions. I have been in many Monday morning… Read more »
Art Suriano
BrainTrust

All the points are important, but if I had to vote, #1 and #2 stand out as the strongest. Retailers have brought many of today’s problems on themselves because they lost sight of what made them unique and different from their competitors. Too many of them are chasing one another, and to the customer, there is nothing different, so there is no loyalty. Add to that, poor customer service and there’s no doubt customers just assume use the Internet rather than be ignored or insulted by rude store level employees. It’s unfortunate that for so long retailers have felt, “here’s the product; I’ve given you a good price so buy it” without taking an interest in their customers. Glen’s last suggestion-Act Early is the obvious one that most retailers have missed entirely and continue to. Now catching up for some retailers will be impossible and if they can, it will be very expensive.

Shawn Harris
BrainTrust

Takeaway five “Act Early” has to be the most important point for retailers today. Historically, many retailers have taken pride in not being at the bleeding edge. Clearly, times have changed and now they need to be moving faster than ever. However, I also believe that the shift taking place is much deeper than the rather cyclical points raised in the article. Retailers need to be looking at a future context where there are a limited number of “browsers” that shoppers will use to navigate the commerce landscape.

Brandon Rael
BrainTrust

The article hits on the fundamental aspects of the challenges that traditional brick and mortar retailers are facing. However, in today’s dynamic retail shopping industry, it’s the experience focus that is the most critical to get right. Experience is most certainly the most important and obvious factor of sustaining a long term customer relationship. However, it is the most difficult to support, as a customer first mantra has to be embedded within the DNA throughout the entire organizational culture.

Retail organizations may profess that they are customer-focused companies and concentrate on having the right product, at the right place, and at the right time. However, that is simply not enough to win the hearts and minds of their shoppers, who have far greater opportunities to choose and control their shopping journeys. Customer loyalty is a fragile thing, and a bad experience, whether online or in store could have permanent impacts.

Charles Dimov
Guest

Two favorites are the Experience and Do It Now! The key to gaining loyalty with shoppers is making the shoppers experience an exceptional one. Good is just not enough. Standout service is what it takes to get your customers to talk about it, spread the word, and come back for more.
Do it now – is the other key. We tend to be cautious in retail. But, if you want to be a leader, today’s retail take technology. It is a baseline. Don’t be the laggard! If nothing else, this is the one big element worthy of change in the industry.

Meaghan Brophy
BrainTrust
Meaghan Brophy
Senior Retail Writer
2 years 5 months ago

I think “Go Where Others Aren’t” and “Act Early” are the most important takeaways for retailers, yet are the hardest to achieve. As the article says, ”Go Where Others Aren’t” used to mean a geographical location. Now, it’s coming up with innovative touchpoints, products, and services that other retailers aren’t offering. Now more than ever, time is also of the essence. Even if you have a truly innovative idea to “Go Where Others Aren’t,” if you don’t act now, someone else will.

Lyle Bunn (Ph.D. Hon)
Guest

The whole discussion comes down to relevance. The quality of experiences reflect the respect that retailers express for the time of consumers. Online does this in the research, discovery and purchases elements on the path to purchase, and transactions become the basis for ongoing relationship. When retailers view the world through their supply lens, they become a hammer seeing all the world as a nail. Shifting that perspective to significantly consider the nail — the consumer, puts the retailer in a position to better serve patron interests and to leverage their unique capabilities,

Mohamed Amer
BrainTrust
Mohamed Amer
Independent Board Member, Investor and Startup Advisor
2 years 5 months ago
Of the five takeaways here, acting early is the most important, while capturing the entire lifeline of the customer is the one most frequently neglected by retailers. On acting early, it’s not about acquiring customers as Mr. Wais stated, because any retailer that views the owning of or acquiring a customer is framing the retailer-customer relationship in outdated terms. Consumers — and especially Millennials — no longer are willingly playing the brand or banner loyalty game of the past 50 years. So acting early here is about retailers investing early to test out new business models and processes to engender trust with their customers, and invite them to come back again to make their purchases (online and in physical stores). Capturing the entire lifeline of the customer makes a lot of sense to retailers but is hard to do because this necessitates a reliance on identifying, collecting, and analyzing data over the long term at a very granular level. It’s about taking the long view of the business, but not ignoring individual transactions. Both of… Read more »
Cathy Hotka
BrainTrust

I’d add another point — know your customer. Retailers are leaving a lot of money on the table by not knowing who their best customers are. I used to spend thousands a year at a certain grocery chain; when they closed my store, I moved on to another chain, and apparently my former chain didn’t notice. I’ve had no communication from them at all. Pure-play retailers have information — and information is power.

Scott Magids
Guest
2 years 5 months ago

The first point, “go where others aren’t,” speaks to the need for differentiation, and that’s by far the biggest challenge in today’s hyper-competitive environment. Retailers need to recognize that differentiation is a constantly moving target, and that which sets you apart today will be copied by all of your competitors tomorrow. Creating better products, slicker websites and offering superior service are all good tactics, but they are tactics that everybody else are using as well.

Cultivating a mindset of going beyond being a vendor of excellent products is what gets neglected most. Retailers go beyond by truly understanding the customer on an individual level, understanding not just what they want but why they want it, and how it makes them feel when they get it, and what’s going to motivate them at the deepest emotional level to return to your shop, even if other shops are offering the same thing.

Lee Peterson
BrainTrust

To me it’s “Act Early.” The rule in retail used to be Fast Second, in that you would let someone else find out the hard way whether or not something (anything) worked well. Not anymore. Think of the things AMZN has been first to market with and won big. Today, it’s Fail Fast or fail period.

Ken Morris
BrainTrust
Ken Morris
Retail industry thought leader
2 years 5 months ago

Retailers know they need to provide customers the optimal shopping experience — the challenge is getting there. We see a lot of retailers focused on improving the customer experience and the savvy ones start by mapping the current and idea customer journeys. What makes it really challenging is the variety of different journeys of individual customers. The key is to organize your retail experience to be flexible to adapt the individual shopping journeys and make the customer experience seamless and frictionless.

Shep Hyken
BrainTrust

Number three is VERY important: capturing the entire “lifeline” of the customer. It’s not about a transaction. It’s about many interactions. Understand a customer’s personal preferences is the first step to creating a personalized and connected experience that brings the customer back.

Kate Munro
Guest
The most important takeaway is that retailers must “Act Early,” but they must also learn to effectively leverage “Experience.” Retailers need to think like a digital native. They must be willing to change their thinking. Change the way they do things. Change the way they bring product to market. Change the way they design, discover, develop and deliver product. Retailers can have all the analytics, Big Data, and IoT in the world but if the product development process is broken, it’s all broken. If it’s slow, it’s all slow. Retailers need the ability to tie in their communities – faster. They need to quit spending so much time and money on physical sampling. They need to quit spending so such time and money on market weeks and costly trips to Asia. They need to quit spending so much time and money on manual invoicing and payment processes. They need to digitally connect their PLM, sourcing, GTM, P2P, order management and logistics. They need to tie this all together with immediate ways to communicate with their… Read more »
Doug Garnett
BrainTrust
Doug Garnett
President, Protonik
2 years 5 months ago

It is disappointing to see how many lists like this omit products. Retail only exists to sell product. And values like entertaining or experience events are support to that fundamental reason to exist.

To think about a way forward without product seems to be classic ecommerce thinking — because ecommerce sites suggest “we can offer anything.” They can, but they also aren’t tremendously profitable today.

Product based strategies that move into the future for retail will be critical. It’s sad that our industry isn’t talking about it more.

Pavlo Khliust
Guest

All of the points are perfectly relevant to the current situation. The most important ones are experience and entire lifeline of the customer, as they define the entire relationship between customer and a particular retailer. An approach in dealing with these two key factors defines competition for the consumer’s attention.

Acting early is problematic, especially for larger retailers, due to their fear of the unknown and relatively slow adaptation speed. Stakes are high, so everyone’s cautious about making any changes without an existing working solution.

Cate Trotter
BrainTrust

They’re all valid points — I think 1 and 2 are closely related and experience is something that we’ve seen as being hugely important in recent years. In fact most of the takeaways come back to experience. Delivery forms part of that experience and a good experience can also help turn shoppers into lifetime customers. I think where retailers are failing is on point 5 — act early. They need to start leading the way rather than playing catch up.

Ricardo Belmar
BrainTrust

These are all great points but I think an important one that is missing is actually not new — the need to understand your customer and their needs. Too many retailers fell into a belief that whatever they placed in their store, shoppers would buy. Product mix can be a way to differentiate and lead to unique experiences for shoppers in the store. That’s what today’s successful brands have already realized.

gordon arnold
Guest

Consumer purchases have redirected from wants and preferences to needs and value. To thrive in this economy takes many goals and mandates, but the winners circle remains empty. You may count the occasional flash in the pan to win a shouting match, but there formula for consistent thriving success is yet to be found.

Stores and warehouses are teaming with loser inventory, with more on the way. The future is not as bleak as this may sound. Corporate needs to find and promote A & B turn product and remove the old fashioned test store/markets. The idea of automating purchasing and planning in times like these is causing open-to-buy dollars to evaporate from drastic mark downs on product that does not belong in all market areas, for a number of reasons that can not be electronically calculated. Looking at new product through the blind eyes of a computer is decades or more from being practical.

Jennie Gilbert
Guest

I may not agree with all 5 points (I’m looking at you #2 — “experience”) but I do whole heartedly agree with the overall theme. Amazon and other digital retail pioneers have successfully moved the target for all retailers. Today every shopper expects maximum convenience and absolute delight when spending their hard-earned money for products, whether they’re buying them from a top 100 retailer or the local mom and pop. It can sound daunting to keep up with, but this shift is fueled by a purpose that’s easy to get excited about. No one wants to innovate for innovation’s sake alone — but to pursue excellence through change that meaningfully improves your customers’ lives? Now that’s something we can get passionate about!

Keith Nealon
Guest
2 years 5 months ago
While all points made above are important, I believe that focusing on the aspect of “experience” can really make all the differences for retailers. There are a lot of different ways to think about experience, but in my opinion all great customer experiences have one thing in common: they nail the basics. Customers value things like quick checkout, flexible payment options, and helpful sales associates more than novel innovations like virtual reality or other cool in-store technology. Retailers should double down on making sure every aspect of the shopping experience is as simple and as easy as possible. This can be as straightforward as expanding buy online/pick-up in store programs. On the other hand, “acting early” is the most frequently neglected by retailers. The problem is that many retailers invest in short term solutions to solve their large overarching pain points. In adopting strategy and technology that alleviates the problem for the time being, retailers fall behind in creating agile and future proof experiences for their customers. Retailers have to be able to immediately add… Read more »
Camilla Ley Valentin
Guest

Experience is the standout to me. Provide a consistent, excellent experience in-store and online and customers will come back.

wpDiscuz
Braintrust
"...the reason department stores are so challenged right now (well, one of them) is that they are not at all specific."
"To me it’s “Act Early.” The rule in retail used to be Fast Second, in that you would let someone else find out the hard way..."
"It is disappointing to see how many lists like this omit products. Retail only exists to sell product."

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