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Is the Retail Apocalypse upon us? Takeaways from Shop.org 2017

Shop.org Retail Digital Summit, organized by the National Retail Federation, is an event known for its eclectic group of experts, thought-leaders, and downright fascinating people. This year, apart from enjoying the great food and networking opportunities, I got to listen to several of those people discuss the burning issues facing the retail industry today.

Retail Apocalypse?

“Retail apocalypse” is a term that has been spinning around for some time. Almost every month there’s news about another retailer going bust or closing its stores. High-profile retailers such as Macy’s, Sears, Abercrombie & Fitch have been among the casualties, only to name but a few of them.

Business Insider recently published a list of the 6,403 closures that have been announced so far in 2017.

It’s obvious that the brick-and-mortar is experiencing some rough times. Considering how much more convenient it is to order a product online and have it delivered to your door-step, many stores just aren’t giving consumers enough reasons to leave their homes.

 

The picture looks pretty grim. Or does it?

Greg Buzek, president of IHL Group, begs to differ. At the NRF’s media conference he revealed that the actual numbers are not quite as pessimistic as they may seem. He shared findings from a recent IHL Group report, which shows a net increase in store openings of over 4,000 in 2017.

“The negative narrative that has been out there about the death of retail is patently false. The so-called ‘retail apocalypse’ makes for a great headline, but it’s simply not true.”

If you look at the stories behind some high-profile store closures hitting the news, you’ll realize that it’s mainly retailers who were not able to keep up with the fast-paced, highly competitive industry they’re in.

The way consumers shop is changing and so is the store’s function and the retailer’s role. They need to shift from being product-pushers to becoming insight-providers. Companies that understand this will attract consumers and create a bigger purpose than just selling a product. They’ll be the ones to quickly take the spots vacated by the companies unable to transform. For instance, the IHL Group report showed that “for each company closing stores 2.7 are opening stores.”

Scott Galloway, the founder of digital intelligence firm L2 and a professor of marketing at New York University’s Stern School of Business, made an interesting point on the role of retailers and brands during his amazing keynote session:

“People go to stores not to get products, they go there to get expert advice!”

It’s a convenient shortcut that allows them to receive the information they need to quickly purchase a product or a service, without wasting precious time going into insignificant details and spending hours researching online.

Being able to make swift and confident decision means instant gratification. And instant gratification is what consumers are after.

Consumers also want convenience, and the possibility to interact with the brand the way they want and when they want –  whether it’s through a Facebook fan page, a website, or brick and mortar store. These heightened consumer expectations in a world of instant access were the focal point of an interesting panel discussion, which included Grace Glenny, Senior Director of Site Merchandising at Target and Luke Chatelain, VP of Innovation at West Elm.

They stressed that categorizing consumers by the channels they use to communicate with a brand or purchase was a flawed concept. Consumer behavior is highly context-sensitive, which means that different situations will prompt consumers to use different channels. Their advice for retailers was to embrace the challenge and provide a seamless and uniform experience across all touchpoints and devices.

Because customer experience always wins. It’s as simple as that.

Good customer experience and ease of shopping happen whenever retailers understand that they need to be more than mere product repositories.

At Shop.org, Brian Tilzner, Chief Digital Officer from CVS Health, described the company’s approach: “We focus on the pain points […] and work to make the experience better.”

In my opinion, this should be the ultimate survival strategy for all retailers and brands.

Tilzner is developing and leading the teams driving CVS Health’s company-wide digital innovation efforts, where they analyze customer problems and use technology to solve them, such as by allowing customers to refill prescriptions with a simple click.

Along the same lines, Walmart’s CEO, Marc Lore urged attendees to invest in innovative technology that makes shopping easier for customers. He likened current online stores to more sophisticated, interactive versions of static product catalogs.

The problem is that retailers are still not doing their best to help consumers find the right product or service without having to browse through hundreds of pages. It’s something stores need to improve urgently if they want to make shopping effortless and give people reasons to shop with them. For Lore, voice-enabled assistants will change the game of retail as it will force retailers to rethink their approach.

“It’s important to not just look at the technology, but what it enables,” he said. “For example, with voice, I think one best answer is going to be more important than ever before because you can’t just get a list of 50 different things through voice. So, having that one-to-one personalization and being really good at it is going to separate the winners from losers.”

Overall, Shop.org was another gooden. My final takeaway and advice for you:

  • embrace the changes and opportunities technology offers to be better for your customers
  • understand your customer pain points and be relentless in removing them
  • make shopping convenient via all channels
  • let your customers dictate how they want to communicate with you
  • do everything to help them make better choices faster, wherever they are!

 

Image credit: NRF

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Markus Linder is entrepreneur and co-founder of SMARTASSISTANT, now zoovu.