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Why harmonic retail succeeds where omnichannel fails

| by DeAnn Campbell
Why harmonic retail succeeds where omnichannel fails

Photo by istock.com

"May you live in interesting times."

This anonymous invocation could easily apply to the upheaval we are experiencing in retail.

As shopper journeys evolve, retailers are finding that the omnichannel strategies they worked hard to implement are no longer effective. At the heart of this upheaval sits one small stat: 0.6% — the current annual population growth rate in the U.S. and the lowest growth rate registered since 1937.

A stagnant population means the traditional retail revenue model — targeting a relevant demographic and building your business around that group — no longer works. America is not creating tomorrow's shoppers; therefore, brands and retailers find themselves competing for the same customer, creating an unsustainable buyer's market.

The industry is hustling to attract millennial and Generation Z consumers, but this strategy ignores the fact that baby boomers outspend every other generation by $400 billion and will still control 70% of disposable income in the U.S. for the next decade.

So what is the new retail model? How do you deliver a retail experience that attracts Millennials and Gen Z without alienating the Boomer shopper who really has all the money?

The rise of harmonic retail

"Omnichannel" still means predetermined shopper journeys that ask the customer to adapt to the channel. Switching channels often means starting over. Browsing an e-commerce site? Great, but if you didn't check out, you have to begin again when you get to the store. Creating the flexibility needed to integrate separate channels, plus designing experiences to embrace multiple age groups and unique paths to purchase, is a near-impossible task.

The path to success for brands and retailers means flipping the traditional model and getting comfortable with discomfort. A lot of experts tout a "seamless experience" without defining how it is achieved. Harmonic retail embraces the fact that no matter how you integrate, there will be seams. Yet those seams can be a positive differentiator rather than a weakness.

Harmonic retail is akin to a website that adjusts to any screen. A website will look and react differently on a mobile screen versus a computer monitor, yet the experience is so intuitive the customer rarely notices. Harmonic retail uses tools to mold the customer experience to fit the shopper, regardless of age, need state, or purchase path.

Hitting the right selling notes

Shifting to a harmonic retail culture requires a fresh mindset. Here are three tips to help you get started:

1. Think ABC, not DEF
Design customer experiences around ABC (aspiration, belief, context) rather than DEF (demographics, ethnography, facts.) Demonstrate solutions for how a product will fit into consumers' lives. Solutions resonate across all demographics. When buyers can picture how a purchase solves a problem and get a sense of how solving the problem will feel, the retailer is most of the way to a sale.

Starbucks, one of our former clients, understands the ABCs. Despite the majority of coffee drinkers over the age of 65 making their coffee at home, Starbucks has attracted a large number of Boomers. At any time, you'll find customers ranging from 12 to 80 enjoying the experience. Stores are designed around sensory elements that allow each customer to feel the product benefits in his or her own frame of reference.

2. Think outside the store
Brick and mortar is an essential part of harmonic retail. A physical presence gives customers the confidence to purchase online, creating a halo effect to boost digital sales. Stores offer brands and retailers important face time to see how merchandizing drives sales and a regular forum to speak with customers about their experiences — an ongoing focus group with the benefit of real-time product interactions.

And think outside the traditional store format. The positive effects of brick and mortar can be achieved through myriad forms — small stores, large stores, showrooms, pop-ups, shop-in-shops, and vending machines offer equivalent trust benefits.

Although Ikea seems like an unlikely pick for pop-up experiences, the company has had success dabbling in different iterations. From converting a Japanese monorail to showcasing a mini New York storefront, Ikea is putting itself where customers live. Shoppers see Ikea as trustworthy, interesting, and responsive to the realities of day-to-day life.

3. Bring the human back into tech
What do shoppers want? According to PricewaterhouseCoopers data, three-quarters of buyers crave human interaction. At the same time, a SOTI study reveals that three-quarters prefer self-service arrangements. Retailers have to find a way to navigate these conflicting preferences, which can be done through thoughtful tech design. "What would humans do?" should be the mantra when developing shopper-facing technology.

Zara might have figured out this riddle. Its innovative self-checkout allows customers to just hold up their merchandise. No awkward scanning, no added equipment, and no extra tasks to navigate. Self-checkout involves a natural set of actions, similar to what would transpire at a typical manned checkout. Not only is the transaction intuitive, but it's also normal behavior. That's what makes it so popular.

Traditional buying behaviors have shifted radically. Through developing the tools of harmonic retail, brands can adapt to stay in tune with customers across a broader range of age groups and purchase paths to grow their bottom line.


Topics: Consumer Behavior, Customer Experience, Marketing, Merchandising / Digital Merchandising, Trends / Statistics


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