Are you ready for responsive retailing?

I borrow the term from (where else?) the internet. Responsive websites are sites that automatically adapt/ respond to the device upon which it is accessed. The same site on a mobile device will look and function differently to the same site being accessed on a desktop computer.

Image Kikitwou on Deviantart.

Image Kikitwou on Deviantart.

I think there will be major role to play for organisations in a retail supply chain. That role will be constantly evolving and it will require different skills. For example, great retailers must acquire curation skills and not (merely) merchandising skills. Retailers must learn the art of story telling in different mediums, not (merely) via a window display.

There are many more. In fact, I would say that most (99%) of job descriptions that exist in the retail environment today is largely outdated already, and if not will be in two years.

Not only must retailers acquire responsive retailing skills; the same requirement applies to responsive strategies, responsive systems and so forth.

To have a responsive retail business means you must design a responsive retail business. This means re-thinking everything you do.

There are three dimensions (like with any design) to Responsive Retail

First Dimension

Fundamentally retail is/was transactional. A customer exchanges money for goods or services. Success requires that you stock the right product at the right time and place and price. It is pretty simple. Your competition is clearly identified on this same dimension. As a retailer, all that is required is that you push your message out to market and convince them of the benefits.

I term all the elements of this first dimension the 'RETAIL PROPOSITION'. I have written two blog posts about it - start here. If you are seriously interested in this topic, I recommend that you get the Jump the Curve eBook.

Second Dimension

For a long time consultants and good operators have acknowledged that it is hard to sustain a competitive advantage at the transactional dimension. 'Customer Service' became the new battle ground.

With customer service I refer to things like all the add-ons (delivery, wrapping) through to pleasant human interactions (courtesy, responsiveness.)

Have you ever wondered if there was ONE SECRET to customer service? There is:Read this article on HBR.

Third Dimension

This is the new battle ground. Of course, both the first and second dimensions of retailing remain valid. It is just that a good offer and good service are now considered cost of doing business. Consumers demand/expect a great value offer accompanied by great customer service. These are givens.

But if you want to operate/compete in an environment where online is a serious option, then you have to build out the third dimension of retailing: THE EXPERIENCE.

This is more than customer service. It is a new way of shopping.

I wrote this document in Nov 1999, proposing an approach that shopping centre landlords should be approach eCommerce. The bulk of those arguments STILL hold true. I say this not to brag about how insightful I am, but to point out that many of these changes are obvious - and have been for some time.

Retail Experience is more than Retail Theatre

Jon Bird wrote up a piece on Urban Outfitters. It is what he terms retail theatre. And whilst I agree with what Jon writes about that particular retailer, I do think that it qualifies only partially as an 'experience'. This article, also by Jon Bird, describes something more akin to the notion of retail experience I want to explore.

In my mind there is a difference between 'theatre' and 'experience' - and whilst I am being arbitrary here, it is an important distinction. 'Theatre' is entertainment ('shoppertainment') - and I am after more than that. An experience INVOLVES the customer - it is interactive and engaging on an intimately personal level. Watching 'Getaway' on TV is entertaining, going on the holiday is the experience. Creating an experience is not about sexy visual merchandising.

A store that really delivers an experience is Jay Kos. Read this article and follow the link to their website. Two commentators have written interesting articles that explains how retail may play our in the future.

Doug Stephens used the phrase the 'store as media' (not sure if he coined it) but it is a phrase that resonates with what we have been saying for some time. This articleby Doug touches on many of the same points I make here.

Michael Fox runs an online business Shoes of Prey) and wrote this article in SMH depicting a future retail scenario.

Everyone has been to a family restaurant, so I thought that might be a good example.

The OLD way (two-dimensional)

You arrive a few minutes early, but they have the table ready anyway.

The waiter acknowledges you, greets you, introduces himself and takes you to your table where they hand you your menu.

The waiter comes around within a few minutes to take orders.

They even suggest a few specials and make a recommendation for the wine.

They place the order at the kitchen and return with water & crockery.

They bring the food out and serve it the proper way.

Everyone gets the meal they ordered, and it is presented well and it tastes exactly how you expected.

During the course of the meal there are a few 'table checks' and they top up the wine/ water.

They bring the desert menu, take the order and serve the desert in good time.

The waiter is alert and you catch their eye easily and you signal for the bill.

Your credit card is approved and you leave a healthy tip.

You are greeted when you depart.


The NEW way (three dimensional)

You arrive at the restaurant and you are greeted by name by the host.

He accompanies you to the foyer where other guests are mingling.

The host enquires about your last business trip and compliments your companion on her earrings.

As the host introduces you to a few other guests, the sommelier brings you a pre-dinner drink (based on knowledge of your preferences. But it is a new flavour, and they share a few titbits about the new process/grape/brand whilst serving you.

One of the hosts is telling a story to a few people gathered around her, and you join the half-circle to watch the 'performance'.

A few minutes later the door to kitchen opens and the host invites everyone in. There are long bench tables arranged around the kitchen island, which is manned by 8 chefs.

The lighting changes and the head chef introduces the crew. Each of the four long tables will be serving different range of dishes based on your recorded preference. You had indicated 'seafood' and your companion take your seat at that table.

Your seafood chef greets you by name (they had the seating plan indicated on their side of the table, and they have learned something about every customer.)

He then proceeds to run through the menu planned for the night.

As they start the preparations, they engage you in conversation, telling you what they are doing giving some tips as they go.

The courses are placed in front of you by your chef throughout the night.

When you are ready to leave, you simply get up and excuse yourself.

The chef comes around and gives you a hug and your companion a kiss on both cheeks.

They insist you take the half bottle of wine with you as you leave.

At the door, the doorman opens the door to the waiting taxi.

At the end of the month, your credit card is charged the usual monthly membership fee.

Whilst you may argue that you would not like the 'new' restaurant experience; that is not quite the point. This is just one example aimed at people who do this for the food experience. I am sure you can imagine a few other 'themes' or experiential outcomes that would suit your tastes better - and if there is a market for it, some restaurateur will cater for it.

The point of this exercise is to imagine how a 'traditional' concept might be transformed in an experience. You may think a restaurant is an easy option, but the same can be done for a travel agent, a hair dresser or a shoe shop - quite easily.

Dreaming up the experience is the easy part. Translating it into a physical experience (staff, systems, procedures etc.) is the hard part. And of course doing so at a profit is harder still.

Customer Experience is NOT what you think. There are three compelling reasons why (bricks & mortar) retailers should conquer the science and the art of delivering customer experiences. Delivering an experience is the single most important, sustainable differentiator.

Web-designers spend a lot of time on (UXD – user experience design) because they understand that if you lose the browser for a split-second it they are gone with a single click. Retailers have the opportunity and the ability to create an experience that counts (CXD) – but few do.

What is a ‘customer experience’? It is NOT customer service. A clean store, friendly and helpful staff and user-friendly return policies – for example - is customer service not customer experience.

The great unspoken assumption is that you have the base right: great products or services at the right price, presented well and great customer service that meets expectations. Customer service is not longer a differentiator, it is cost of entry.

It is NOT shoppertainment. It is not singing and dancing, it is not plasma screens and things that fall out of the roof – that is shoppertainment, not customer experience.

Customer experience comprises all of the above, but above all customer experience has an emotional dimension.

How do you create the emotional connections? This is of course quite complicated because human being are complicated – and their emotions especially so. My favourite new consumer is NewNowLo and she is not Chinese: She is the person that moved from wanting new à demanding new, now at low prices.

The world is changing and people are moving from:

Needing stuff >>> Demanding experiences

Conformity >>> Customisation

Plutocracy >>> Democracy

Self >>> Community (The Tribe)

Consider just two emotions and a few retailers that do a reasonably good job of delivering that emotional connection.

AROUSAL OF THE SENSES

  • Abercrombie & Fitch

  • Victoria’s Secret

  • Starbucks

EXCITEMENT/TENSION FROM NOVELTY

  • Zara

  • Daily Deals

  • Anthropologie

Delivering the customer experience is reliant on the H-Factor. That was the basis of the talk I delivered recently at the Melbourne Retail Expo and Conference.

I have previously published newsletter (ReadThinkLearnLaugh). SUBSCRIBE HERE and receive access to the latest issue which contains a series of screencasts exploring how you create and deliver a customer experience. (HINT: customer experience is NOT customer service.) I have based on the presentation mentioned above - and there is a special offer for readers ;-)

Someone who has managed to create that theatrical experience and a compelling retail story is the STORY concept in NY:

Founded by Rachel ShechtmanSTORY is a 2000 square foot (200m) store located in Manhattan’s burgeoning new retail corridor of 10th avenue. STORY is a retail space that has the point of view of a magazine, changes like a gallery and sells things like a store. Every four to eight weeks, STORY will change out all its merchandise, design, and fixtures and reinvent the store around a different story-based theme.

Watch this talk by Rachel telling the story of...STORY.

The truth is that designing and delivering a great customer experience (3D Retailing) is only part of the success. Because the reality is that you will have to keep changing the customer experience to adapt to changing consumer demands, changing technologies and changing competition.

The core skill is not designing the experience, but building the systemic ability to design and re-design the experience into your business. This is what I term Responsive Retailing.

We Are Not Yet Ready For Social Retail. You can’t have a real relationship if you view customers as traffic. Referring to people as ‘traffic’ shows a cultural ‘attitude’ that lacks (or will make it difficult to acquire) authenticity.

You can’t say you love women if you think of them as bitches – even as a ‘joke’. (And vice versa of course.)

As a centre manager I worked hard, but with limited success, to change the language in my centre. I wanted our tenants to be called retailers. I wanted ourcleaners to be called housekeeping.

I am pretty sure my team thought I was strange, but I know that if you change your language, you will change the culture. Take for instance what happened at Enron.

Amidst Enron's excesses were the unmistakable cultural cues that drove employee behaviour. "We're an aggressive culture", "Guys with Spikes", "Money is the only thing that motivates" and "Rank and Yank" are but a few of the statements heard. Is it any wonder traders thought they had the right to manipulate the market?

The CEO of one of the biggest culprits in the recent US mortgage meltdown had a vanity numberplate: FUNDEM (fund them) – with reference to their philosophy to give a loan to anyone that can, as his employees subsequently described, ‘fog a mirror’. Say no more.

I know old habits die hard. I know you think it is an ‘innocent mistake’. But it is not.

So here is evidence of the type of language that reveals an organisational culture that is not yet ready for the era of social retailing: Consumers. Target Market. Traffic. Segments. Hits. Yield.

Responsive Retailing is retailing that responds to ANY context and it is 'just right' no matter what device/platform the user has.

Are you ready for responsive retailing?