What a long, strange trip it’s been for retail over the past couple of years.
But only three months into 2018, we’re already seeing an upturn in conversations about the state of the industry. The stories about the death of retail are becoming few and far between, and they’re getting replaced by stories on newfound success and tips on how to make the most of a changing landscape.
All of this really came into focus at eTail West. And while the positive sentiment is certainly a start, we’re still left with lingering questions about what retail really looks like in 2018.
Sure, we’ve (mostly) made it out of the “retail apocalypse” and come through stronger on the other side. But what does that other side look like? If the conversations at eTail West were any indication, retail in 2018 looks something like this:
It’s About Compelling Experiences
The opening remarks at eTail West set the tone by asking us to think about how we can create compelling experiences — both on digital channels and in real life.
So how exactly do you do that? It requires you to start with the experience first and then build off of that. Ultimately, your goal should be to make the customer journey less transactional. It takes a leap, but if you focus on engagement and value first and purchases second, you’ll end up creating a more loyal base of customers and the purchases will follow.
Some of the brands that exemplify this thinking best include REI and Charlotte Russe, and they both take very different approaches. For REI, the experience is all about adding value through expert advice. In doing so, REI has created something shoppers can’t get anywhere else and fostered a deep brand connection as a result. For Charlotte Russe, it’s all about creating a sensory digital experience that’s reminiscent of shopping in a store thanks to the music it plays through its app. The music has nothing to do with the clothing Charlotte Russe sells, but it’s music the retailer’s target demographic likes and it brings emotion to the digital world.
It’s About Blending Channels
Imagine working at Gap and seeing the headline “eCommerce is booming. Someone tell Gap.” It happened, and it’s how Noam Paransky, Senior Vice President of Digital at Gap, opened his presentation at eTail West. Since that headline made the news in 2016, Gap has taken its eCommerce revenue growth from the single digits into the high teens — an impressive turnaround to say the least.
For heavy hitters like Gap and Target, one of the biggest keys to success is blending online and offline channels. At Target that blending means that digital is no longer a part of the organization that sits off to the side. Rather, it’s infused in everything the retailer does and everyone is aligned on creating the best experience possible for customers, regardless of where that experience takes place.
And although both Gap and Target believe that people still love to shop in stores and that won’t change any time soon, Paransky did underscore that connecting digital and physical experiences can unlock huge advantages for retailers. Most often, making that connection requires balancing needs across the organization, introducing shared goals, thinking about an overarching “mission control” and establishing a well-developed game plan that covers products, customers, experiences and data.
It’s About Data
No surprise here: Data makes everything smarter. But while everyone now recognizes the importance of data, how to put it to work effectively isn’t as universally recognized. The good news is, you likely already have all or most of the data you need, which means you just have to identify the who and the how.
In terms of the who, we’re seeing a lot of talk about Chief Data Officers (CDOs), who typically sit somewhere between the CMO and the CIO and are tasked with creating a continuum that connects customer experiences and technology. CDOs should also work to bridge the silos that have crept up between technology and marketing in order to help create the ultimate blended channel experience.
In terms of the how, it’s a matter of working cross-functionally to capture data and put it to work. But that’s a loaded statement. What you really need is a solution that surfaces data and makes it simple to take action on that data. And that requires getting data out of spreadsheets and analysts and into the hands of marketers.
It’s About Humans
In all the talk about the role of data in retail, it’s easy to forget the very thing that makes retail tick in the first place: Humans.
As Petco put it, how do you use the data you have across channels without losing the human connection? It isn’t easy.
But the second you lose sight of your customers, all else falls out the window. You need to understand who your customers are and what they like, and you also need to understand how they interact with your brand. That understanding of customer and behavior data is essential to creating compelling retail experiences that give customers what they want. But it’s only part of the equation.
Most Importantly, It’s About Products
Obviously humans are important to retail and you need to know your customers. But if you only know your customers, you can’t fully tailor the experience to deliver what they want. To close the loop, you also need to know your products. Because once you know your products, you can figure out which people would be most interested in them based on what you know about your customers.
So what does it mean to really know your products? It means being able to parse out your products based on hundreds of different attributes so that you can find deep connections between them instead of basic connections like “these are all shirts.” And once you have that product knowledge (paired with your customer knowledge, of course), you’ll be amazed to see what’s possible.
Retail in 2018: It’s Not What You Expected
And look at that, we made it through 1,000 words on the state of retail in 2018 and didn’t mention that ever-popular “P” word once. Yet somehow, everything we described above helps create a unique experience for each shopper. How about that?
Here’s another thing you might not have expected: Amazon won’t be the only winner. Check out our take on the new path for retail: Co-existing with the force of Amazon.