Everything that moves in the world of retail is measured. Data rushes over the retail landscape 24 hours a day, seven days a week, 365 days a year. Opinions are everywhere, most of them from people who have no retail credibility, little retail experience outside their narrow viewpoint, and often an axe to grind.
Technology continues its unstoppable invasion into every crevice of retail and social media creates impacts and reverberations that have little to do with the levers that create profit.
The net result is that retailers are drowning in noise. Most of it is irrelevant but nonetheless distracting – if not damaging – to clear, concise and productive decision-making.
In reality, a retailer only needs to answer one question: “How do I make the customer’s life better as a direct result of their experience with me today?”
If they can’t answer that simply and succinctly, then all the information in the world isn’t helping them; it’s blinding them. Success in retail is not about being busy; it’s about spending time, energy and capital where it is most productive.
Retail productivity is only about mutually-profitable relationships – the so-called ‘win-win’ scenario. In the customer’s eyes, retailers must deliver a win to them. By being the best at something that matters to shoppers, a retailer can improve the lives of their customers more than the next business. This strategic advantage leads to more sales – a win for the retailer.
Everything else in the mix is an enabler, an enhancer or an inescapable cost of doing business. Most people operating in the world of traditional bricks-and-mortar retailing are caught in a process maze that has little to do with energising the correct levers to answer that essential question in a manner that will help them create sustainable profit.
Any business that can’t deliver an experience that makes their customers’ lives better needs to re-imagine their offer.
Physical retail is not about unadulterated efficiency – online stores and technology-enabled delivery systems will win that battle. Customers seek more from stores. In this hyper-transactional world, where life is increasingly de-personalised and de-sensitised by technology, shoppers crave the opposite of efficiency; however, they need a powerful payoff for their sub-conscious investment beyond ease.
Contemporary success stories in retail all share one common theme: they make the shopping experience more human, more sensory, more enjoyable and ultimately more rewarding and they reorganise their businesses around those key deliverables.
The analogue approach
According to Nielsen data released in the US at the end of 2017, vinyl record stores have achieved more than 1,000 per cent growth in the past decade. Furthermore, where digital music downloads peaked in 2012, sales of the physical formats of music are continuing to increase.
The same thing has occurred with sales of books, where downloads peaked in 2014 and yet sales from bookshops are growing. In the US, physical media is now outselling digital downloads.
While articles point to a new trend that romanticises nostalgia as an antidote to digital overload, the truth is that the return of physical media may be far simpler and have much more to do with human psychology and physiology.
As with all things to do with retail, there are two sides to the coin.
The consumer side is that, while new technology has many benefits that consumers desire, across-the-board change is not what shoppers ever want.
While they adopt the convenience of carrying record collections in their pockets, fans also like collecting the artwork that comes with albums and the tactile and audio richness that analogue provides.
On the store side, retailers lurch far too easily and too far. When something like digital emerges, practitioners are often their own worst enemies, hastening the demise of traditional products and services through the actions they take to ‘adapt’ to the trend – radically altering what and how they do things.
A blanket move to digital and scaling back analogue effectively robs shoppers of the alternative, ensuring that the trend becomes the only reality until shoppers and entrepreneurs lead a renaissance.
Mark Mebalds from record retailer Vinyl Destinations was quoted in an Australian Financial Review article titled, “Analogue vs digital: everything old is new” as saying, “Our sales trebled in 2017.”
In a retail market that is growing annually at close to 3 per cent year-on-year, high growth does not come from following the crowd, particularly a crowd that is hell bent on cost-cutting strategies rather than customer experience.
The unavoidable fact is this: retail opportunity has and always will be about the differences between shoppers, not the sameness.
Sameness is a mass-merchant strategy that works for the 20-tonne gorilla that dominates a category.
Even then, the smart businesses provide differentiation around the edges so that they don’t become just about cheap price and convenience – attributes that dictate commoditisation, little loyalty and negligible margin elasticity.
The human condition has always sought balance – when work is high-stress, people seek revitalisation; when life seems boring, they seek stimulation.
When shopping on convenience and prices is over-saturated, shoppers seek value-added experiences.
The great record stores and bookshops that are prospering in times where other categories are complaining are evidence of where to look for future retail prosperity.
Find the opportunities to connect customers that are willing to pay more for what gives them more, and then give it to them.
There is no shortage of opportunities to make a difference to the lives of retail shoppers today. Arguably – in this frantic, stressed out, angst-ridden world – there have never been more opportunities to deliver something powerful.
Retailers must take the time to step back, take a deep breath and find their mojo by answering how they can improve the lives of their customers as a direct result of the shopping experience.