RETAIL FUTURES: Other Peoples Money (Part 2)
The Digital Revolution: Creative Destruction or Retail Reinvention?
Following my first RETAIL FUTURES: Other People’s Money (Part 1), let’s continue with another two strategies that will help retailers ensure their businesses not only survive, but thrive, in the digital retail era:
- Leverage digital channels to enable your customers to get what they want – with Pizza Hut introducing online ordering in 1994, and Amazon.com launching in 1995, electronic retailing is nothing new. Since then however the pace of innovation has accelerated exponentially with Web 2.0, mobile devices, social shopping, geo-location and other technologies spawning a multitude of business models for multi-channel retailing. There is even a concept called social vending that PepsiCo is piloting. Increasingly, it appears that the mobile device is the weapon of choice for retail innovation as in the case of the Starbucks app which replaces both the loyalty card and way to pay with a single swipe. One vision of how these technologies will converge was shown by digital marketing agency Resource Interactive at the recent Shop.org annual summit in the video the future of shopping.
- Listen to the voice of the customer – a unique aspect of the new digital channels is that they enable two-way communication in ways unimagined before. Even if a retailer did not initially start, or is not part of, a direct communication with their customers they are now able to join an ongoing conversation. By tapping into the vast stream of digital consciousness as it is being generated at a mind boggling rate by people, devices and sensors retailers are able to discern what is being said about their products and their brands. This unique feedback loop is enabled by text analysis technology which is able to scan huge amounts of unstructured data and pick out key words, as instructed by a user, on such things as brands, products, locations and sentiments. The insights gained can help retailers understand not only sentiment about their products, prices and services, but also the whole customer experience and in turn illuminate what potential there for improvement, differentiation and further innovation.
So in a nutshell, digitalize your products and services, and deliver and gain feedback on them and the whole experience through digital channels. Today’s shoppers are technically savvier than ever and equally savvy retailers are being rewarded with their business. By adopting digital and mobile strategies, retailers can ensure that they too will earn a share of consumers’ wallets.
We’ll leave the last word to Larry “the Liquidator” Garfield:
“You know, at one time there must’ve been dozens of companies makin’ buggy whips. And I’ll bet the last company around was the one that made the best goddamn buggy whip you ever saw. Now how would you have liked to have been a stockholder in that company?…
…Take the money. Invest it somewhere else. Maybe, maybe you’ll get lucky and it’ll be used productively. And if it is, you’ll create new jobs and provide a service for the economy and, God forbid, even make a few bucks for yourselves.”