WHY DO RETAILERS FAIL #3: TREND vs ACTION

Last week I wrote that instead of responding to trends as drivers of the business, we should rather see trends as market responses to friction points in our business.

It follows, therefore, that we should see the trend as a symptom of a problem and not the cause of a change.

There is wide spread consensus that the following trends are manifesting right now, and that survival requires retailers today to master these trends and either future proof the business against their effects or to capitalise on the trends.

Typically, pundits will list a bunch of ‘things’ and label them trends:

  • Mobile
  • iBeacons/NFC
  • Gamification
  • Community engagement
  • QR codes
  • Multi-channel
  • Social Media
  • Internet of things
  • 3D printing
  • Fusion retail

The challenge with these lists is that the trends belong to different categories. Gamification is a strategy and QR codes are technology.

At the other end of town, Companies like PricewaterhouseCoopers will create conceptual frameworks, which are probably perfectly valid.


http://www.pwc.com.au/industry/retail-consumer/assets/Digital-Media-Paper-Jul12.pdf (Source)

In both cases it is hard to go from the diagram or the list to doing different things in your shop today and be confident that it is relevant to your business and that you are not simply addressing a fad. In accordance with my hypothesis, the trend is an indicator of an underlying issue.

What is the solution?

I suggest a simple process that can be used by large and small organisations alike:

  1. List each touch point of your customer journey (form initial web search to post transactional interaction)
  2. Identify potential areas of friction (e.g. website slow to load, long queue at the till) at each individual touch point.
  3. Fix each point of friction by asking the following three questions:

* How can I use current technology to reduce the friction?

* How can I systematise my operation to change it and to prevent it recurring?

* How can I use this change competitively?

  1. Ensure the changes are documented and communicated and trained into the business as required.
  2. Rinse and repeat as part of your annual business model review