5 top themes for future retail success
Photo source: iStock.com
I was honored to have the opportunity to speak at the TCG Retail Summit 2017 held in Berlin in April which represents a very unique gathering of top European executives. TCG is specifically focused on technology retailing, which is one of the most challenging categories in all of retail.
In mature categories with declining volumes and margins, there are immense pressures on the c-suite to innovate. This year's summit was particularly noteworthy in terms of the dominant recurring themes for future retail success, not only for technology, but all categories of retail.
Why this is important: The paradox was that even though the focus was on technology retail, the innovations were less about applying technology to retail, and much more about how to engage today's omnichannel consumer.
Innovation is an ongoing process, not an event
Even though the audience was primarily technology retailer and vendor leaders, the innovations highlighted were less about the application of technology to transform retail. It was refreshing to hear thought leaders and executives focusing on how retail must now adapt to the most disruptive force in retail today — the omnichannel consumer.
I don't recall ever attending an event where the theme, presentations and discussions where so focused on "customer centricity." There was no question about omnichannel … it was accepted as a given. Consumers have already voted for a seamless experience across time and place. In listening to the presentations and excellent panel discussions at the summit, five key themes emerged. And, what is most significant about these themes is that they come from the very top thought leaders and executives in technology retail and distribution across Europe.
1. Omnichannel is the new normal
The underlying theme present in most of the presentations and panel discussions was omnichannel. The summit in fact kicked off with Christopher Bidet's presentation focused on "innovation throughout the customer's journey." From "walking in the customers shoes" to "customer centricity," thought leaders were squarely focused on today's consumer as a driving force of change in today's retail.
If anyone had any doubts about omnichannel, it was key topic in almost every presentation and follow up panel discussion. The consensus in many discussions seemed to be that retailing is now moving beyond omnichannel. Based upon today's consumer behavior of shopping any time and everywhere, the customers don't separate channels. Today's consumers see offline and online experience as "seamless." Future success will require "omni-retail" of engaging consumers when, where and how they want to shop and purchase.
2. The 4Ps are being replaced by the 4Cs of customer centricity
The omnipresence of consumers in their purchase journey poses new challenges, and opportunities for retailers. In the not too distant past, "product was king." Retailing was all about the 4 Ps — product, price, promotion, and place. Today, technology enables consumers to transcend time and place. The mobile smartphone has also created complete transparency for products, price and promotion. To survive retailers must focus on new differentiators.
Thought leaders at the summit consistently pointed out that products, price and even same day shipping will not be differentiators. The new DNA of future retail success will be focused on the 4Cs — customized, choice, convenience and connected. To thrive, retailers and vendors must innovate as partners to create a much more customer-centric approach of connecting with consumers across multiple touch points before, during and after the sale.
3. "Experience is the your product"
A top theme of both the presentations and panel discussions was focus on the customer experience as a key differentiator. Jeffrey Sears from the Modernist group perhaps captured it best with his concept that "your [retailer] experience is your product." For traditional bricks and mortar retailers, the DNA now required is creating exceptional store experience as the new differentiator producing disruptive results. Sears went on to highlight how human-to-human experience creates the customer "love and respect" that translates into customer relationships.
Despite all of the disruption from omnichannel, no one was predicting the demise of the retail store anytime soon. The recurring theme of the future of the retail store depends upon the quality of the experience delivered — the kinds of experiences and demos that the web can simply not deliver. However, no one said this transformation will be easy. Many of the discussion panelists called out the need for new levels of partnership between vendors and retailers to "bring products to life," particularly in stores.
Indeed, smart home products were frequently mentioned as the "poster child" for requiring hands on customer experience in store. Smarthome products are the growth category of the future that technology retailers are poised to lose … If retailers don't deliver an exceptional experience that connects products to the consumer's life style.
4. Engagement – yes we can!
The other underlying theme for future retail success is that retailers must develop internal DNA focused on customer engagement. In the product-centric past, it was enough to build stores, run ads and wait for consumers to come shop. In today's omnichannel world, consumers are very proactive and in control of their journey. To be successful, retailers must focus on innovative ways to move from a passive display to proactive ways to engage customers, where they are and how they want to purchase.
Perhaps, the highlight presentation of the summit was from Niles Khalkho, CEO of Sharaf DG. Khalkho provided an amazing visual journey of Sharaf DG's mantra of "frowing through differentiation" in an omnichannel environment. This journey included numerous examples of how retailers, especially technology retailers, will survive and prosper by truly differentiating on customer experience, engagement, and service. The Sharaf DG story was a highlight that became a "Yes we can!" rallying cry for what is possible in transforming technology retailing.
5. The Bottom Line — results still count
It is one thing for an executive team to say they are transforming to omnichannel, it is quite another to be able to execute omni-presence and service 24/7/365. There were a number of speakers and commentaries on the tremendous investments required to be able to create the experience and engagement demanded by today's consumers.
Adam Simon from CONTEXT highlighted the ways investors are still looking for a return on any investment in retail. Simon also highlighted how achieving that return will require more than fiscal, operational expertise. The successes, and the future of technology retail will require innovation on how to leverage talent and resources in new ways that generate connected, customer relationships based upon a differentiated customer experience.
The bottom line: Future retail success will not depend upon the sales transactions made today, but rather upon the customer relationships earned through engagement and services that will generate customer life time value.
Chris Petersen Chris H. Petersen, PhD, CEO of Integrated Marketing Solutions is a strategic consultant who specializes in retail, leadership, marketing, and measurement. He has built a legacy through working with Fortune 500 companies to achieve measurable results in improving their performance and partnerships. Chris is the founder of IMS Retail University, a series of strategic workshops focusing on the critical elements of competing profitably in the increasingly complex retail marketplace. www