Managing

Levelling the playing field for retailers

Administrator /

When you break it down, shopping is made up of two main activities: choosing and buying – preferably in an enjoyable setting with some treats on the side.

Curating the choices and facilitating the transactions are the traditional core of retail businesses, dating from the time people couldn’t access products without retail infrastructure sitting in between. Retailers selected appealing and good-value products for their target customer, advertised them attractively, sorted out the logistics, made it easy to buy with convenient stores and credit arrangements, and reassured customers with returns policies.

For most people, other options now abound. The internet and social media have had transformational effects on both of these processes, allowing people to make more informed choices based on peer or expert advice, price comparison and enabling simple, secure and  more convenient transactions with all sorts of vendors.

Retail is full of great examples (or horror stories, depending on your point of view) of people trying on the garment in a store, getting their Facebook friends to comment then buying the same thing online (with a supercharged Aussie dollar from an offshore retailer who might even ship it for free) from their smartphone – even while still in store.

But options are confusing. Technology can be frustrating and choosing is hard. And the novelty factor of new gadgets soon wears off.

How should traditional retailers capitalise?

For many customers, choice curation remains a valued service – delivering convenience, customisation, value or reassurance benefits. These benefits can be the basis of great retail brands as much now as they have in the past – maybe even more. IKEA does it with room sets and modular concepts, with ranges and solutions to suit different needs.  iTunes does it with a distinctive approach to assembling and presenting options, and providing a simple (proprietary) transactional system to make it easy.

One problem with choice curation is that fact that entirely user-directed journeys through digital content can be so “purposeful” that people miss the surprise and delight of relevant but unexpected stuff offered along the way.

Think about the way that great merchandising puts products together in inspiring ways and great editorial design does the same with news content on a printed page. It’s the insightfulness and creativity of the combinations that make it work. You start to miss this aspect in the linear link-clicking that often characterises the digital realm.

Who does it best?

Adding value to the choices customers make comes in interesting forms, too. My Starbucks Idea (http://mystarbucksidea.force.com) is a famous example of an online customer community that created 70,000 ideas, from engaged customers, in its first 12 months. It’s moderated by Starbucks and is a superb source of customer insight and engagement – delivering “brand participation” in spades. It adds value to the brand by including the customer in the shaping of the choices the store offers and the overall experience it delivers.

As usual, all these developments are both threat and opportunity for “traditional” retailers. The concept of Omni-channel Retailing illustrates this. A premium department store with traditional values of customer-centricity, service, style leadership and mixing “solutions” across brands is a perfect platform for these new retail models.

My take on the opportunity for traditional retailers is to chart a course for the future that blends technology into their proposition in a customer-centric way, translating their heritage as fresh, contemporary experiences.

Critical is adding value in distinctive ways to the core customer processes of choosing and transacting, blurring the lines between traditional and digital channels to accommodate distinct customer missions and preferences – and not losing the surprise and delight along the way.

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