Commentary

Retail Needs To Focus On People, Not Technology

The world is changing fast. Uber is the largest taxi company, yet owns no cars, Airbnb is threatening the hotel industry, but owns no real estate, and Alibaba, the world’s largest retailer, has no inventory.

Digital disruption is everywhere. From new accessories like wearables, to new retail techniques like mobile commerce, it’s easy to think that everything is changing. Yet in this world of unbound possibilities, we seem to fetishize technology, rather than use it to design products and experiences that cater to new and emerging consumer behaviors. We need to shift our focus away from the shiny new toys that technology provide, and key our eyes to our customers.

People now have no concept of on- or offline. 

The "purchase funnel” was never a particularly accurate model, but it did provide a sense of order in a chaotic landscape. But now there's a generation of people who’ve grown up with no concept of an offline world. Now purchases alternate between brand ads and impulse buys, influencers can be 15-year-olds, in-store and mobile become supplementary experiences. We’ve made little attempts to change with the times, though. We’re still forcing people into decision-making funnels that make no sense.

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Online behaviors mean physical stores need to change.

We’ve now the most demanding consumers the world has ever known. The Internet has taught us that we can shop 24/7, that we can get access to real-time stock information, don't have to wait on checkout lines, can self-serve and get products delivered to us. Retailers need to be open to serving these needs in-store. While iBeacons are an interesting development, perhaps what retailers should focus on would be richer in-store information, more staff at busy times, better staff training to offer suggestions and help -- all to make retail in-person what online struggles to be: a theatrical, entertaining, fun experience. 

We need to re-evaluate what online commerce can be.

Collectively, the retail industry has incredible amounts of information about how people behave in-store, how to convert shoppers, how to suggest complementary items: a world of insights, creativity and the superb application of psychology and behavioral economics.  So why is it that every retailer site feels like a thinly veiled content management system? Why is the shop window a mere exercise in Adword buying? We’ve boiled the joy of shopping into a transactional experience of drop-down boxes, inevitably ending with the boredom of typing in credit card details and hoping for free shipping. Why not re-imagine what shopping should feel like online?

People-oriented marketing.

We’ve made a lazy assumption about privacy, assuming people fear giving away personal data when in fact they care about a value exchange. Retailers need to think about what they can do in exchange for this data to make people want to share more. Apps should offer unique personal value, recommendations, special pre-booking, consultations and more. Companies would be amazed at the data that they could gather in return and then use to help perfect service.

We need to consider the new role of advertising in retail.

Advertising will soon offer "buy now" buttons aided by frictionless purchase thanks to Google or Apple wallets and Touch ID technology. From Twitter to Flipboard to Pinterest, soon ads can be direct links to fast, easy shopping. Image recognition technology like Blippar, or RFID codes, could allow ads to take people to rich, immersive places or even custom-built homepages to shop from. We need to stop thinking of ads as a small piece of the jigsaw. Instead, think of them as the gateway to a world of actions.

We need to layer technology, creativity and empathy to transform the customer journey so retailers will become the stars of this new era.

2 comments about "Retail Needs To Focus On People, Not Technology".
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  1. David Jaeger from Global SEM Partners, March 26, 2015 at 9 p.m.

    Oh wow, preach to the choir! I've been telling my ecommerce only clients that our industry is in trouble as soon as the brick and mortar guys figure out the impact of online advertising on in-store sales.

    Basically, since the store experience (in reality) creates more value per visitor than an online store does, as there's no tactile experience, as soon as the industry manages to nail down the tracking side, we are all going to have some issues.

    That leads web-only retailers to think about either creating a store where there's demand (but perhaps more a-la a Bonobos model, where it's just a show-room, no inventory), or creating faster, more satisfying tactile experiences before the customer has to buy (a-la Amazon's same day delivery).

    Either way, we need to be thinking about this challenge, and planning ahead for it.

  2. Maura Troester Nunez from Frontera Project, March 30, 2015 at 3:39 p.m.

    Tom, I agree wholeheartedly that, "We need to layer technology, creativity and empathy to transform the customer journey." I don't believe, however, that retailers should or will become the stars in this new era. Consumers are demanding to be the stars of their own shopping journey. We’ve entered the “Age of Me,” and in this age, consumers are fast becoming the luminaries of the omni-channel retail universe. The retailer who understands this and can layer their analytic data with their CRM, PLUS a deep understanding of the motivations that drive purchasing behaviors will be the winners in the next decades.
    You have raised a topic that I believe is the crux of a seismic retail shift that we are just beginning to understand. I'm glad to see other comments' like David Jaeger's above to have confirmation that others are seeing the big pink elephant in the room too.

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