Resurrecting Retail—Part One: Reinventing the Customer ...

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Resurrecting Retail—Part One: Reinventing the Customer Experience

Resurrecting Retail—Part One | 1


At its core, retail has always been at the center of how humans interact, consume, and exchange value.

Bartering, marketplaces, catalogs, departments stores, and malls are the manifestation

of retail through the ages. This landscape remained relatively unchanged until the rise of

the digital age. The internet’s impact on technology, culture, and commerce has been

revolutionary. It forged the opportunity for eCommerce, enabling customers to transact

and purchase online around the clock and virtually from any location. The internet opened

up access to customers who didn’t have the time, interest, and/or means to get to a

physical store, and so began alternate digital channels and additional opportunities for

both digitally born and existing brick-and-mortar retailers.

The retail industry is in a highly dynamic and disruptive state where technology and

consumer behaviors are changing at paces never before imagined. News reports oscillate

between ominous predictions about the demise of the traditional store, and tremendous

opportunities brought about by emerging technologies promising to foster deep consumer

understanding and engagement across multiple channels and platforms.

However, simply introducing digital channels has not proven to be a panacea for stale

retailers—there are a myriad of new challenges to consider. Changes in consumer

behavior and expectations thrust forward by advancing technologies and new service

models continue to create significantly greater expectations and demands from

consumers. No longer is it enough to have a store or a website that merely transacts—

modern consumers expect retailers to not only understand them, but anticipate their

needs, personalize their experiences, provide unexpected value, and make all

touchpoints seamless, convenient, fast and easy.

In the first edition of this two-part point of view, we discuss the reasons, challenges, and

implications of becoming a truly customer-centric retail organization. In Part Two we

outline key steps to achieving this goal.


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Channel-less Customer Experiences All relationships are built over time, through mutual exchange and experiences. If a retailer’s success is the result of relationships cultivated with their customers, nothing is more paramount than acutely understanding those customers and remembering why the business exists in the first place. This is why social media has become a compelling and important medium since it fosters interaction and engagement between customers and brands.

Unlike most retailers, customers don’t think in channels; customers view any interaction—digital or physical—as experience with the brand that is seamless and channel agnostic.

These ‘channel-less’ experiences require a dynamic shift from traditional product or channel-centric approaches. Long gone are the days of ‘stack it high and watch it fly.’ Retailers and consumer goods companies embarking on understanding more complex customer data and journeys are faced with new requirements to attract, engage, convert, and retain customers. 1

This mindset shift to ‘experiences with the brand’ is about building relationships and enabling customers to enjoy consistent interactions regardless of channel—and providing unexpected value along the way. Giving customers unparalleled

1 Image by StockSnap (https://pixabay.com/users/StockSnap-894430).



experiences will result in loyal customers and advocates who are not only willing but

enthusiastic about sharing their experiences. As Harry Gordon Selfridge once said,

“Excite the mind, and the hand will reach for the pocket.”

A key component of customer-centricity is trust in the brand. Trust manifests itself through

several components in the retailer-customer relationship: proper assortment, product

information, pricing, inventory accuracy, data security, customer service, quick delivery,

and more. Customers must be able to trust that these components are planned, designed,

supported, and managed flawlessly and consistently. 2

Another key factor is being relevant and anticipating customers’ needs while avoiding the

‘creepy factor.’ This is now more evident with the increasing use and acceptance of

advanced analytics and artificial intelligence technologies, such as Alexa and Siri. It is

widely known that online behaviors are tracked and leveraged by digital retailers, and in-

store customer tracking technologies are becoming more prevalent; however, retailers

must be very cognizant that shopper behaviors vary widely—some prefer a very

2 Image by Simon Steinberger (https://pixabay.com/users/simon-3/).

Trust manifests itself through several

components in the retailer-customer relationship



autonomous experience, while others appreciate more involvement by the brand,

particularly concerning in-store service. In either scenario (as well as those in between),

retailers must carefully balance their understanding of customers with being too invasive.

With so many choices of where and how to buy products, not delivering on customers

wants and needs means someone else will. Customers value experiences, solutions,

convenience, and effortless shopping. Supporting growing consumer demands and

expectations is paramount for remaining relevant and if done well, a competitive

advantage.

Customer-Centric All-Stars

Starbucks and Nordstrom are examples of customer-centric companies achieving

success by putting consumer experiences at the forefront of decisions about how to best

spend resources and focus efforts.

Starbucks has always sought to become the “third place between home and work,”

designing stores to be inviting, comfortable and a place to stay a while. They continually

seek to elevate experiences, deliberately exiting their online store business in fall of 2017

to simplify and integrate digital, mobile, and store experiences as part of their ‘digital

flywheel’ priority focusing on four pillars:

• Rewards

• Personalization

• Payment

• Ordering

The mobile order experience is convenient, easy, and seamlessly integrated into the

mobile app and rewards loyalty program and drives customers into stores. Not

surprisingly it is the most popular and regularly used loyalty rewards app among

restaurant chains according to a study3 by The Manifest.

Nordstrom, already known for its legendary customer-centric culture, continues to invest

in technology and data analytics to create more personalized and cohesive experiences

across channels. Advancements include expanding online offerings, updating the loyalty

3 https://themanifest.com/app-development/how-customers-use-food-delivery-and-restaurant-loyalty-apps



program and mobile apps, and testing new store concepts (for example, Nordstrom

Local)—all with the objective of improving seamless service offerings and experiences

for customers, regardless of channel.

Other brands that excel at customer-centricity are also notable for concentrated focus on

employee satisfaction at every level: Costco, HEB, Publix, and Wegmans—all of whom

are consistently cited in a variety of annual publications focused on “the best places to

work.”

Incidentally, all of these brands

operate authentically and foster

trust by aligning their

organizations and resources to

support their respective purposes

of putting people at the center of

everything they do. This is

reflected in their respective

mission statements. However,

they tend to be the exception since

many retail and consumer goods

companies have yet to make the

changes necessary for operating

at this level. Still, they are

excellent examples, representing the enormous value exchange that can be achieved by

continually improving, assessing, testing and trying things to remain meaningful and

relevant. 4

The Path to Customer-Centricity

In customer-centric companies, the entire enterprise—all departments, processes, and systems, exist to serve the customer first, by creating value, aligning, and

collaborating to engage customers on their terms. This means shifting the focus and

approach to developing the experiences first then delivering accordingly across the

4 Image by Juan Guemez (https://pixabay.com/users/jguemez-1058256).



appropriate channels and platforms, as well as in terms of aligning product assortments, messaging, promotions, and customer-facing roles and responsibilities.

Recognizing retailers are at various stages of maturity and levels of sophistication, it is important to note that there is no one formula for success. Evolving to improving customer experiences is unique to each organization’s circumstances. Further, companies do not need to take an all-at-once approach—they can investigate and execute incremental improvements that will bring meaningful results.

The following components are vital to becoming customer-centric and require careful consideration before initiating action:

• Planning strategically and collaboratively • Identifying gaps in the company’s current versus future state • Being consciousness (and honest) about current capabilities • Exploiting new technologies appropriately and relevantly • Ensuring transparent communications internally and externally • Understanding the resources required to change



Final Word

Of course, recognizing the reasons for and importance of becoming a customer-centric

organization is merely the first step. Knowing how to do it is another matter. In the second

part of this point of view series, we will outline several key transformational steps to

consider in identifying, assessing, and implementing strategies to evolve your enterprise

towards customer-centricity.


for more details contact:

Sonia Hernandez Partner | [email protected] Sarah Booth Senior Manager | [email protected] 770.882.2205

The Parker Avery Group The Parker Avery Group is a boutique strategy and management consulting firm that is a trusted advisor to leading retail brands. We combine practical industry experience with proven consulting methodology to deliver measurable results. We specialize in merchandising, supply chain and the omnichannel business model, integrating customer insights and the digital retail experience with strategy and operational improvements. Parker Avery helps clients develop enhanced business strategies, design improved processes and execute global business models. Learn more about us at:

www.ParkerAvery.com

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