Kagan: Retailers going back to basics for growth

| by Jeff KAGAN
Kagan: Retailers going back to basics for growth

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An interesting trend is beginning in the retail industry. Over the last several years, retailers have been rapidly embracing new technology and moving away from traditional marketing methods. Now, they are going back to traditional marketing and mixing it with new technology ways of interacting. This is something I believe the customer will love, finally!
I shared this story in a speech to a retail group and got great feedback. Retail management has a newer and younger mindset and these folks have rapidly been taking the industry in new directions. While there is nothing wrong with innovation and new ideas, it's also important to recognize the customer base is like a pie with lots of slices.
While one slice of the customer pie welcomes and loves new technology, another slice of the same pie is full of people who are used to a certain way of doing things. This group has been ignored in recent years. This is the problem that needs to be addressed.

Retailers shouldn't transform overnight

Several of the retail companies I have talked with are experiencing this exact problem. One consulting firm which specializes in the retail industry, hired a recent college graduate to lead their way going forward. Someone who has lots of fresh new ideas.
He completely redesigned their retail model, embracing new technology and techniques and though he was on the right track. After a year of engineering and changing things around, they rolled out this new design.
Immediately, their customers who are retail stores, complained. They said it's too different. Too much transformation, too quickly. It was complicated and totally takes their retail stores in new and different directions.
So, the bottom line lesson is clear. While this is good for one slice of their customer pie, namely younger customers, older or more established customers were lost and did not like it at all.
This consulting firms who has retailer clients, demanded to go back to the older model they and their customers understood and felt comfortable with.

Important lesson learned by retail consulting firm

There is a key lesson every retailer and every consultant should learn. Change is good, but not complete, rapid and total change. Work change, into the current model. Don't replace anything. That way you keep your existing customers happy and you welcome new customers as well.
Clothing retailers like Kohl's made mistakes in the beginning with their app until they redesigned it and finally saw success. Grocers like Kroger are rapidly moving in this tech direction to compete with the new threat, Amazon Whole Foods. McDonalds replacing front line workers with order taking machines should use both until customers feel comfortable with new tech.
Innovation is good. There are always reasons to reinvent. There are always plenty of threats and opportunities around growth. With that said, it's important to understand your customer base and your employee base. Change, but at the proper pace. If not, if you rush it, you risk losing  market share.

Retailers should remember story of frog in pot of boiling water

Making total, instant and complete changes to everything is often too much change too quickly. Change is good. Innovation is good. However, it's important to make this change easy to digest by your customers and workers. Take it one step at a time. Add new ideas and new thinking to your existing model. Don't transform everything overnight.
Remember the old story. If you drop a frog in a pot of boiling water, it will hop out. But if you put it in a pot of room temperature water, then turn up the heat bit by bit, it will eventually boil. Sorry about the image created by this story, but I hope you get my larger point.


Topics: Consumer Behavior, Customer Experience, Marketing, Merchandising, Omnichannel / Multichannel

Jeff Kagan is a Wireless Analyst, Telecom Analyst, speaker, author and consultant. Over 30 years he has followed the Customer Experience through technology like wireless, wire line, telecom, Internet, cable TV, IPTV, Cloud, AI, Mobile Pay, FinTech and more. Email him at www

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