No business owner can take a set and forget mindset; nothing is slowing down and putting your head in the sand is not an option.
Technology, media trends, audiences, compliance and opportunities for your business; online retail is like any other industry in the modern age — it’s constantly changing, evolving and reinventing itself. There’s always something new to consider, but it is just as important what you say no to. Having a strategic to-do list helps me focus on the bigger game.
I have attended two retail transformation conferences this year and the message is clear: retail is disrupted (it is never going back to what it was before). Let me be clear, this is not a downturn. But the expectations of consumers have shifted, forever.
Retail will never be the same and we need to get used to it.
In the past, retailers used to look at three basic parameters: speed, value and quality. And if they met two of them, then they had likely met customer expectations. These three are now table stakes and in fact, if you don’t deliver on speed, value and quality, there is no way that you will be able to grow beyond the industry norm.
That’s why I thought it would be helpful to offer something of a retailer’s to-do list. It’s a quick glance of some of the items I think are worth keeping one eye on if you’re operating in the retail space. Because the fact of the matter is, retailers are either innovators and disruptors, or failing businesses — there is rarely an in-between these days.
1. Tech challenges and changes
There is always new technology coming to market that promises to make things better and easier and faster.
My advice when it comes to tech, is to keep your eye on it but don’t always be tempted, or distracted, by the latest shiny bells and whistles. Surround yourself with people who know their stuff, in terms of overcoming challenges and also identifying new opportunities. These are very different things. I know this because we’ve learnt some expensive tech lessons over the years at RedBalloon — no one is immune.
2. Retail analytics and big data
Big data. Hasn’t that term been thrown around a lot in the last few years?
Data in and of itself isn’t the shiny beacon of retail dominance it’s hyped up to be. It’s useless, and in fact, a big old-fashioned distraction for your teams (in terms of deciphering and cleaning and maintaining), unless you know what you want it for and how to use it.
Look at Amazon. Through its autonomous pricing algorithms (all based on data), it’s able to reprice products 30 million times a day. Now I’m not saying the local artisan cheese shop needs to be this sophisticated, but the message is clear. It’s not so much the data that matters, but what you use it for. And being across privacy compliance is key to this.
3. RFID (Radio Frequency and beacons)
Big Red Group chief information officer Brett Raven was recently interviewed by News Limited about this topic and the impact it’s likely to have on the retail landscape in the not-too-distant future. A future where beacon technology can help you find the perfect outfit…
As you make your way through clothes racks to browse, all effort will be taken out when hangers linked to the beacons activate and flash so you know where to head to find items to pair with what you’ve got. Information would be collected based on what’s currently in your online shopping baskets and what you’ve bought in the past and be connected to what others are buying to recommend matching pieces to complete a look. Brett Raven, chief information officer with Big Red Group, said this kind of future was not that far away, with stores already using beacon technology to collect foot traffic and tailor advertising for customers. He said with the face of customer experience changing massively over the past decade and the industry set to evolve even further with the introduction of artificial intelligence and personalisation, Mr Raven said retailers would need to further innovate the shopping experience.
Again this isn’t relevant for all, but it’s an intriguing signpost on the retail road.
4. Personalised UX
Everyone wants to feel special and like you know them. My colleague Lauren talks about walking into her local gym and being greeted by name every time. That personal touch means she keeps going back despite there being cheaper options in her local area. The message: people will pay for personalisation.
In reality, there are only a few retailers that are anywhere near getting it right. And rolling out a loyalty program is not the answer to intimacy. As retailers, whether online or not, our challenge is to know our customers well enough to be able to predict and curate on their behalf. We must become the trusted advisor to our customers in our area of specialisation, whatever that is.
5. Digital wallets and fintech payment options
If I’d told you a decade ago that you could pay for your weekly groceries by waving your smartphone in front of a payment gateway at a self service check-out, you might have laughed me out of the building. Yet here we are.
Similarly, for 15 years at RedBalloon I’d been wanting to solve the riddle of how we could offer customers the option to ‘lay-by’ experiences, allowing them to chip in how and when they want to purchase a gift. With payment gateways like zipPay and Afterpay now mainstream, this has become a reality (albeit one where the retailer pays …). But fintech is also challenging; dealing with the safety and security of customer data and payment information has never been more significant. Ultimately, being a customer-obsessed business means offering a myriad of ways to engage with your brand.
Retail will continue to change and there will be more shifts. Monash Business School reported that between 2014-2016 there have been 3600 retail businesses close (and many more last year). Really, every retailer must choose to either be a disruptor or to be disrupted.
My advice is simple — know what you want to be for your customers, what you want to stand for, and make sure you are serving your customer where, when and how they want to interact with you.
This article first appeared on Smartcompany.
Also published on Medium.