Staying ahead of change with customer obsession
It’s hard to keep up with consumers in an era where retail tastes are changing as fast as a speeding trolley. At a recent event hosted by Latitude Financial Services, expert Juanita Neville-Te Rito of Retail X and Gus Balbontin pointed the way forward.
Latitude Financial Services financial director Mark Flay says retail, like consumer finance, is a tough industry that demands constant evolution.
“The challenge that we all have is keeping relevant in a world that’s changing on a daily basis,” he says.
Customer obsession is a great way to stay in touch with what consumers actually want as Latitude works to “reimagine ways for people to fund their lives,” says Flay.
What are the changes facing retail?
“The old rules of retail no longer apply,” Neville-Te Rito says.
Customer expectations are shifting due to influences bleeding through from other categories, she explains. While Uber and its peers like Netflix have been revolutionising their respective areas, retail has lagged behind.
Modern shoppers increasingly value access over ownership; balance brand consciousness with concern for the environment; and like to “co-create and learn” while they shop.
They’re interested in expressing themselves, discovering information and influencing their peers through social media.
Retailers are trying to connect with shoppers’ “hearts, minds and wallets” but the flow of the market has become overwhelming for consumers, Neville-Te Rito says.
“Customers have so much coming at them.”
The retail offerings that capture the modern shopper’s attention should be:
She’s shared some examples that illustrate these values below.
Neville-Te Rito says Amazon, the retailer other retailers love to hate, best exemplifies this value. After beginning life as a pureplay, she says in recent years it’s realised that physicality is critical for a relationship with the customer, and has successfully transitioned into bricks and mortar with its Amazon Go concept.
Amazon Go stores use what it calls “just walk out” technology to remove the checkout from the shopping experience, and Amazon’s Prime Wardrobe builds return rates into the business by allowing a seven-day try-on period after items are delivered but before they’re paid for.
US electronics chain B8ta is a great illustration of how new-generation retailers can succeed with a high-touch strategy. At B8ta, tech companies pay a flat fee for their products to be displayed in the stores, which also act as an ordering hub for products to be delivered to customers’ homes. Consumers are encouraged to interact with the products, and B8ta collects data on how they engage with the products to share with the makers of its gadgets.
The rehabilitation of US luxury brand Coach exemplifies how there’s now “nowhere to hide” for retailers, Neville-Te Rito says. Over recent years, Coach’s brand was devalued through a discounting and outlet strategy, so when it embarked on a programme to reclaim its value, it went back to its artisanal roots with Coach Create.
Coach Create allowed shoppers to have Coach personalise a new product or restore an old one, helping raise engagement and highlighting the craft involved in making its product.
Too many retailers appear to understand the importance of community integration, but implement it an inauthentic way, says Neville-Te Rito: “A lot of retailers go, ‘Yeah, I’ll whack in a coffee shop and you can come on in, we’ll be a community.’”
Retailers need to be honest with themselves and create “places where people want to hang out” if they’re to be successful in community building. Neville-Te Rito says Danish apparel retailer Pieces opted to open a studio for creatives to work in with no staff presence at all.
Community can also happen organically to a brand, as with streetwear label Supreme. Its prioritisation of small product runs and exclusive access has prompted hundreds of people to line up outside its stores each week, and a substantial resale market has sprung up.
“Everybody wants to be seen, you know: fun, fame and fortune,” Neville-Te Rito says.
Turkish retailer The Istanbul Butcher is possibly the most extreme international example of a retailer that’s elevated a fairly pedestrian product in a carefully-designed store environment for presentation on social media.
“They created a butcher like a jewellery store: very, very high spec,” Neville-Te Rito says.
She says an Insta-worthy store doesn’t just speak to the shallow trends of social media, but highlights the heart of retail theatre.
“When you curate, you’re not just selling products, you’re selling a dream, a purpose.”
The changes that are moving through the retail sector are a bumpy ride for retailers, but not customers, Neville-Te Rito says. Customers are “quite comfortable” with the minimum viable product, and they’re excited by change.
“Trendhunter is just another word for shopper,” she says.
Gus Balbontin says that in today’s business climate, resourcefulness should be valued over resources.
Balbontin says the most important insight from the transformation that occurred to media as the internet took off is that “the most adaptable to change survives.”
“Adaptability is something that starts with each one of us,” Balbontin says. “For your business to be adaptable, you have to be adaptable.”
He says market competition and ongoing innovation means that products and services which are currently top-of-the-line will inevitably be superseded.
“Whatever product or service you provide to your customers today, it’s not as good as what’s coming.”
Therefore, Balbontin cautions, retailers should be careful not to “fall in love” with their product or service to such an extent that they’re unwilling to change it or replace it as it becomes outmoded. The necessary evolution will be implemented regardless of whether the retailer has elected to carry it out or let a competitor do it, Balbontin says.
“The moment you fall in love with your product and think it’s amazing is the moment you become irrelevant.”
Balbontin says companies should also remember to pay attention to the customer’s ever-changing needs, not their business, and be bold enough to frequently pivot in pursuit of satisfying those needs.
“Customers don’t give a stuff about [companies] at all: all they care about is their problems.”
Shoppers will blaze their own trail if they’re not finding solutions from a company, and businesses should simply work on offering those solutions rather than tweaking their existing product, Balbontin says.