Another retailer facing demise, battling profitability, or wondering how to continue to be relevant is near daily news. This struggle is usually attributed to the “disruption” in the marketplace caused “digital” offerings and competitors. Strangely, an omission in all reports is to acknowledge that the business’ leaders persisted the status quo. Suffering corporate inertia by clinging to legacy mindsets, structures and tools, instead of incrementally investing tools readily available, and changing to what is evident in the rapidly evolving market.
Disruption isn’t external…
The disruption isn’t “digital native” retailers (they all still have significant physical world operations!), nor competition from businesses that communicate, sell and support in internet enabled channels. The disruption is not evolving with the market ecosystem. Not proactively monitoring emerging propositions and competitors, responding to diversifying customer expectations, adjusting operating models, and exploiting tools (technology) that enables the evolution in the ecosystem.
The disruption is sticking to a primary business model because it “always worked” (see Blockbuster as a prime example), and or establishing “eCommerce” or “Digital” independent from the rest of the business (thereby neglecting to exploit core competencies and creating unnecessary silos)…summed up as not having the right proposition. Not just products or services, but the composite offering and experience the consumer expects and associate with a brand.
The disruption is leaders supporting “digital transformations” to implement the latest buzzword worthy technology at significant investment, yet not fundamentally addressing the operating model.
Customers’ expectations and behaviour has evolved
Customers’ expectations and behaviour has evolved, yet strangely all the leaders suffering corporate inertia, has the same expectations and behaviours when they are customers, but don’t translate that to their retail business.
What is disrupting the legacy retail approaches is the (now standard) expectations of consistency, convenience and competence through any interaction point with the business. Converging communication, sales/transactions and support.
Retail customers expect all channels of a business’ to by consistent and complimenting to each other, a business’ proposition based on the customer’s preference for traversing the journey with their specific outcome. An outcome that is not to get your product/service, but to meet an objective in the customer’s life, from their perspective…the retailer’s part, online or off-line is just a bit in achieving that.
The customer expectation and value of a physical retail location has changed dramatically with the ubiquitous access to product information and ability to transact remotely. Customers expect to be informed about products and offerings through their preferred medium, start and complete transaction traversing seamlessly across interaction points, and getting support post transaction through any access point.
This, along with uses of all other channels means drastic changes in how to communicate with the customer; how to facilitate transactions; and how to support (and retain) customers.
Rethink the retail model and communication
A rethinking of the High street and physical retail locations are required. The same applies to marketing, campaigns and PR.
The most prominent retail demise headlines are about the growing unprofitability and dwindling relevance of legacy format physical retail stores. Physical locations that served to hold vast amount of stock of diverse products.
Customer expectations of retail locations have shifted to branded physical “product theatres” and support centres.
A location to showcase and experience the products; have staff that can provide expert input and provide support; to interact as a community with similar interests/objectives; and possibly to collect a purchase. It is there to provide in-person support, act as proxy and provide information and guidance, and illustrate the use.
The era where retail stores, high street or large out-of-town shopping malls/areas, served to hold vast stock of all the products for customers to purchase is long gone. As is the separation between “online” and physical retail. The back-office operations are one and the same (or should be) and in the physical world.
Physical retail is however evermore significant in part for making purchase decisions, getting support and fulfilling transactions (delivery pickups and returns).
In a communication context, it is not about having a plethora of social media accounts, but an approach to integrated and orchestrated communication through any channel, enabled through consistent content and interaction…irrespective of the channel the consumer prefers to interact with at any given moment. The expectation is that the business must know who they are and conduct relevant communication and support them at any point.
The responsibility of the business is to add access to emerging channels (and rethink or retire those that are not of value/demand anymore, like faxing) and effectively use them as the market expects. Ideally the business should exploit the new methods and tools to improve communication, drive sales, provide support and overall, make operations more efficient. The appropriate use of technology aligned to operations enable this!
Establish a culture of evolution
Consumers evolved based on changes and opportunities in the ecosystem, many retail businesses choose not to. Effectively choosing to strategically be disrupting themselves.
Establishing a culture evolution provides a sound foundation to not being disrupted again.