No matter how you see it, consumer retail has been permanently transformed.
Retail has never been as complex as it is today. For the past twenty years, technology has brought wave after wave of transformation in the industry, to the point where complexity has increased exponentially. The first sign of this transformation was the advent of the Internet and ecommerce, which many, wrongly, predicted would take over what was then starting to be referred to as “brick-and-mortar”.
The Internet also brought a wave of innovation to stores themselves. With connectivity came technologies like personalized cashier coupons, loyalty cards providing more than just discounts, sophisticated point of sale systems, and traffic counters. Connectivity allowed stores to streamline previously complex tasks like managing inventories and targeting offers to consumers.
Next came mobile shopping and stores were disrupted again by technology. The ghost of the irrelevant “brick-and-mortar” came back as retailers tried to figure out how consumers with 24/7 access to frictionless shopping would impact them. Again, the predictions of doom for physical shopping were proven wrong. The Experience Economy emerged and doom only befell those which lagged behind with uncompelling experiences. Empty, ghostly malls are a testament to an era that is never coming back. Perhaps the most salient sign of the change in guard is that Sears, once the largest revenue retailer in the United States, recently filed for bankruptcy.
It’s all about the experience
A recent article in The Drum Network recognizes the value of innovation in the new technology-driven experience economy. “In reality, retailers are learning to innovate – looking at new ways to engage with audiences and understand the changing consumer dynamics that are determining the way they shop.” Retailers do not need to be futurists to predict the failure of retailers like Sears, they just need recognize that their stores never embraced the Experience Economy.
Three unprecedented, yet easy to overcome, challenges face the retailers that are mindful of the fact that we are living in a new world of retail.
Challenge # 1: The People
I have not met a single successful retailer which has not adapted their techniques for “millennials.” Retailers face this generation on two fronts: as employees and as consumers. The millennial generation has practically taken over all hourly positions in retail, and now also constitutes the bulk of shoppers. We wrote an interesting piece on millennials a few days ago, access it here.
How to overcome people challenges: to become a magnet for millennials as an employer as well as a retailer, you must understand that this generation needs to feel in control of their experience. Your millennial employees need to feel like they control their lives – which is manifested by their ability to influence and control their schedules. Your millennial shoppers want the same feeling of control over their shopping experience.
Challenge #2: The Experience
To thrive in the Experience Economy, your stores must give customers exactly that: an experience, and your workplace must do the same for your employees. Showcasing your products is no longer enough to attract the attention and the loyalty of shoppers, just like offering a job is not enough to attract and retain great talent. You must shift your mindset from ‘shoppers’ to ‘guests’ and from ‘employees’ to ‘hosts’. You must also realize that both experiences begin far from your store and on a mobile device. When people walk into your store, either to shop or to work, they are simply continuing a journey that began online.
How to overcome your experience challenge: nobody predicted that many brands which began online are now opening physical storefronts with amazing success. They were amongst the first to realize that people are looking for experiences and that the online, mobile, and physical realms can seamlessly connect, complement, and augment one another instead of the cannibalization which many initially predicted. If you embrace this new reality, and follow your guests in their long shopping journey, you will ensure your brand is present at the moments that matter, and your physical store may become the beginning, the middle, or the culmination of such a journey, depending upon each customer’s desired experience.
Challenge #3: The Technology
We often forget that technology exists to make things more efficient, faster, or cheaper. Eventually, only those technologies that make things better survive, yet, many businesses are slow to embrace new technologies for fear of disrupting the often suboptimal status quo. There is a simple rule of thumb to consider when retail innovation comes along: will this technology make the experience of my customers and/or employees better in a clear, direct way? If the answer is yes, then you cannot afford to wait.
How to overcome your technology challenge: innovative technology platforms can easily solve many of your People and Experience challenges. For your millennial employees, who demand control of their day, a platform like Legion, powered by Artificial Intelligence, can easily match their preferences and skills, which they input through their smartphones, with your business needs and demand forecasts. For your millennial customers who seek exceptional experiences, the smartphone can be an extension of your brand’s rich physical and online experience.
Three points to remember:
- A new generation of tech-savvy employees and shoppers has taken over
- People want great technology-enabled experiences – both at work and when shopping
- Technology makes it easy to embrace and delight employees and shoppers alike
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