By Eric Erickson and Mark Murray
Last month, a Kmart in North Carolina became a self-storage facility. This month, Nordstrom acknowledged their transformation requires the patience of private equity. Today, Toys-R-Us files for bankruptcy protection. From a shareholder’s perspective, in round numbers, the stock ticker shows Macy’s down 30% while Amazon is up 30%.
Can you think of a better time to rock the boat of retail?
With this “sea change” in how, where and why people buy, established retailers find themselves in their most anxious position. By our measure, the next 18 months will decide who can take the waves of change head on and who is going to take on water. It’s time to get to work.
Accept that this time “it” really is different. And thankfully, the “situation” has been defined, assessed and prognosticated.
All of retail is challenged to become a force in the future or continue to stay afloat through price, promotion and cost cutting. If you’re part of retail, you know this more intimately than any research analyst hoping for a sound bite on CNBC.
But here’s the tricky part – Each retailer will need to respond in a way that is uniquely their own. The “cut & paste” function won’t work. It’s about delivering a distinctive value through a branded manner and style that you’ve scripted, standardized and delivered at every channel – a very tall order.
So, now that all the pundits and consultants have defined your reality and written traditional retail’s epitaph, we’d like to share our view for actually getting the work done.
Here’s a quick take on what it takes to move forward.
1. Assess Your Crew
If your managers have 10 years of store experience or less, they’ve grown up in an era in which traditional brick-and-mortar stores have been perceived as something of an albatross. They’ve been tasked to source cheaper fixtures, minimize store hours, close unproductive locations. It needs to be asked, “Do they even know how to ‘invest to win’?” And if they have those skills, have you empowered them?
2. Be Brutal with Your Inspection
The truth can hurt, but it’s time to rip off the Band-Aid. In the past five years, has your focus been more on your customer or more on your bottom line? In the balance, have you given customers more or less?
Store condition and presentation of your retail audit will be easier to assess than the “engagement”, but you will need to get granular with this most critical aspect of the store experience. Accept the fact that “sales associate” job competencies, descriptions and yes, salaries are on the table.
Put yourself in your customers’ shoes and be brutally honest. If the love’s gone out of your relationship, see how you can you win it back.
3. Focus on the “Shopper” in Each of Us
Sure, you’ve got mountains of data on your customers. Put it aside for the moment. Our recent study on “Shopper Motivations” reveals that people shop by social/psychological forces that are consistent regardless of brand preference, category knowledge or what they intend to buy. Some may be negotiators, others driven by impulse. How you design your store experience will be guided by these motivations more than cleverly crafted “poster boy and girl” personas.
4. Walk Back From the Future
Factor in trends and predictions then take your team on a shopping trip five years in the future. Imagine a new store visit and a desired customer relationship. So what’s currently in the way of that future? What policies, procedures, hierarchies, budgets and cultural issues will make that future dream go up in smoke? Develop a plan to remove them.
5. Get a Grip. Then, Get Productive
It’s estimated that e-commerce accounted for 11.7% of total retail sales in 2016. Sure, the traditional store is taking on water, but it’s no time to panic. It’s time to get to work. Remember that a meaningful conversation about someone’s next purchase becomes increasingly valuable as it is becoming increasingly rare. Then, have that conversation defined, expressed and delivered incrementally in each of your channels.
Finally, if you need a crow’s nest vantage point to get things moving internally, PWC says it best in their Total Retail 2017 Report. “While the store is not going away anytime soon, its purpose is evolving. There is compelling evidence that people want the physical experience of trying things, but aren’t that happy with aspects of the in-store customer experience.”
So, get started before they give up the ship.
Eric Erickson and Mark Murray will be part of Reveille Retail, scheduled to launch next month. Reveille is a retail collaborative created to guide traditional retailers through their transformation initiatives.
Photo Credit: iStock.com
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