The latest phone, the hottest social media sites, the trendiest diet, the coolest shoes and the hippest clothing brands…yes, these are all things that consumers ‘must’ keep up with or suffer the social consequences of exhibiting last year’s expiring trends. If consumers can keep up with all the trends being pushed by retailers, then what’s the deal with retailers lagging years behind trends that can help them grow their business, maximize profits, and improve customer value and experience? At the core, consumers and retailers have very similar needs, they both want to be desirable, relevant and efficient, yet retailers’ transition has been slow and painful, and takes much cajoling to put into effect.
So what are some trends that retailers should adopt? These ideas are not in any particular order, however, there are operational, technological and infrastructural dependencies.
Battle of the Generations
Let’s start with how the generational gap between boomers and millennials characterizes their needs and desires. Boomers now in their 60’s and 70’s hold incredible buying power, yet retailers are challenged with adapting to their needs. The complexity faced by retailers in how to bridge the gap of the equally large millennial market segment requires a completely different customer strategy. For many retailers, both market segments are equally important, as boomers are the heavy spenders and millennials are future high-value customers. They both require a distinct retail environment, messaging, communication strategy, and product mix. Some retailers may be able to cater to both, while many will have to be selective on whom to focus their limited resources for short and long term growth.
Can’t Buy My Loyalty
As a consumer, you may love or hate carrying loyalty cards with you. In many cases, you may have a card but not carry it with you, which then becomes a wasted opportunity when you want to use it. Loyalty by way of ‘points-for-purchase’ are going by the wayside. Infrequent purchases, programs that are not integrated into existing channels, and those that are simply not compelling enough to sign-up for don’t excite consumers anymore. So what’s the solution? It requires a shift that will look like a hybrid between the ‘points-for-purchase’ and engagement/action based programs. This engagement can be anything from downloading an app, scanning a QR code in store, playing a game, clicking on content, or watching a video amongst many other ‘gamified’ experiences within the retailer’s ecosystem. To scale across these engagement techniques, retailers must begin with updating and integrating their ecosystems to identify value-added engagement points to credit the consumer. These touch points should be tied to high-level KPI’s and campaign engagement metrics.
What an Experience!
Consumers often don’t have a linear or rationale journey to purchase, and marketing will remain forever changed with instant access via connected devices; it will continue to become more complex as technology evolves. Retailers have been ‘talking’ about the customer experience and omnichannel marketing, and now it is bubbling-up to a critical conversation as retailers are challenged to effectively incorporate content-rich and personalized online and offline experiences, through storytelling, POS technologies, as well as all things mobile -including apps, beacons, geo-location, wearables, loyalty and more. Don’t get me wrong, this is no longer a trend or a buzzword, it is an imperative, and retailers must get their act together and bring their marketing, IT and operations teams together to make this omnichannel experience a reality.
Do You Care?
More than a fair share of retailers have breached the trust of millions of consumers, I suspect we can all recall at least one from recent headlines. Let’s face it, no one is perfect, but when it comes to data privacy consumers don’t care why or how it happened. Consumers assume and demand that their data shared remain secure, and will only continue to share that data with brands that apply it in an ethical way, while providing relevant offers and services. Data breaches and the failure of brands to be compliant has cost retailers billions of dollars and much more in irreparable brand damage and long-term trust. This is a symptom of technologies not evolving quickly enough to manage risks and ensure secure and ethical management and application of consumer data. This should be a retailer’s North Star.
Where’s the Data?
Many retailers exist with far from ideal internal ecosystems, where data is siloed by a single department and access to data is restricted or non-existent. Imagine trying to initiate a product recall without unified access to critical data on customers affected? How about leveraging data from the online ecosystem in the retail space? Wouldn’t that be valuable? Of course, but for many retailers, data remains inaccessible, siloed and underutilized. This hurts the brand and the consumer. Retailers should consider migrating their data into a single database to access a 360 view of the consumer to more effectively drive relevant and contextual offers and services, for a true omnichannel experience. At the core, having a single unified database will effectively enable retailers to harness more accurate and scalable consumer insights to be applied across channels and devices.
Retailers dread looking at this list of ‘trends’. Rather than calling them trends, let’s call them what they are: necessities in the evolution of their business and the strength of their brand. If retailers don’t begin understanding the value of their current and future consumers, offering them value and incentives all the while ensuring their privacy, then any attempts to break down internal departmental silos, integrating retail, online and mobile channels aligned to corporate goals, will be futile. These decisions must come from the top-down to drive cultural shifts that many brands have resisted because they are painful. The retail space is more competitive than ever, with small start-ups moving quickly, adopting technology, and stealing consumers with their socially conscious business models that appeal to both Baby Boomers and Millennials. The inevitable will happen, some retailers will sink and others will swim.