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Why retailers need to keep a laser focus on the customer

February 18, 2014 by Jeff Weidauer — Vice President, Marketing & Strategy, Vestcom International, Inc.

I spent the first 15 years of my retail career in operations, i.e. working in and ultimately managing stores. Those years gave me invaluable first-hand experience concerning the ways people shop and how they make decisions.

One could say that shopping today is different: it's more complex, and there are more choices. In addition, we have greater access to information to help us decide what to buy. All that is true, but it’s also true that the decision to buy or not—and what to buy—remains at its heart an emotional one. This is true whether we are buying a car, a dinner or orange juice. Humans are emotional creatures, and my many years of watching the decision process in real-time have only reinforced that fact.

After transitioning from operations to a marketing role, I found that this basic rule was still very true. I used to work for a CMO who made a point of reminding all within earshot that "this is a simple bidness." The "bidness" word was on purpose; he was trying to make a point. And it's true; retailing is a simple business, at least conceptually. Retailers are essentially aggregators of products that consumers—with their emotions—want to buy, and we charge for the service of putting those products in a convenient location.

From that point though, the complexity begins to expand at breathtaking speed. Running a modern supermarket is not for the faint of heart; there are literally a million things to keep track of. So even if the basic premise of providing goods to consumers is constant, little else is. That is where many retailers get tripped up.

When retail really was simple, it was possible to handle all the support functions internally. From finance to real estate to legal to IT to advertising, etc., most retailers hired professionals with specific knowledge in these areas and did all those things in-house. That works for a while, but the world moves on and the in-house people, not necessarily having a true window to what is changing, continue on the same path they know. This leaves the retailer at a potential disadvantage, possibly missing out on new ideas and technology that could make its core business more effective and more relevant to shoppers.

Given the speed of not only change but massive transformation, trying to manage support functions internally is not just impractical, it’s financially irresponsible. Industry is moving at light speed, driven by changes in technology.

In order to stay ahead, get the best information and be able to make informed decisions that translate to what shoppers really want, it's in the best interest of the retailer to outsource the difficult, non-central tasks. And just about all of those tasks are difficult. The core retail premise is where the internal resources should keep a laser focus—on the customer.

About Jeff Weidauer

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