Digital retail is the new normal

  • News
  • May 27, 2016
  • Sarah Dunn
Digital retail is the new normal

When online shopping first went mainstream, many commentators forecast the death of bricks and mortar stores in favour of ecommerce propositions, but Neville-te Rito says the reality retailers are now experiencing is more nuanced.

“Many of us have evolved beyond the myth that the internet is going to decimate retail.”

Digital now overlaps with physical commerce, to the extent that many customers are now totally distracted by their smartphones and “in a partial state of consciousness” while browsing stores, Neville-te Rito says.

Mobile devices have, via social media, enabled an effective avenue for public complaint and significantly complicated the customer journey by making all information visible at any time. These changes mean retailers are now much more at the mercy of customers than they used to be, Neville-te Rito says: “I actually enjoyed the days when we were in control. Stack it high, watch it fly.”

“In order to survive this complex, content-rich world, we need to transform our shoppers into loyal advocates.”

This greater complexity also offers a multitude of ways for retailers to connect with customers, she says. Neville-te Rito cautioned against the omnipresent focus on ‘omnichannel’ retail, saying the concept meant nothing to customers – they just want seamless, frictionless access to the products they desire.

Many traditional retailers continue to treat their ecommerce operations as separate businesses, but Neville-te Rito says Walmart has revealed that 10 percent of its online sales come from shoppers who are physically present in the store. Customers notice the interaction between online and offline, she says: “I think we all know that a great app will not make up for a crappy instore experience.”

Non-retailers like Uber are also having an effect on consumer expectations: “That philosophy of being able to interact on my terms has fundamentally disrupted retail,” says Neville-te Rito.

Key trends she shared include:

  • Total retail. Neville-te Rito foresees increasing tension between ‘rational’, ‘functional’ and ‘emotional’ arms of any given retailer’s management staff as the business seeks to achieve a seamless, holistic retail ecosystem. She gave Warby Parker as an example, praising its perfect brand execution.
  • Digital convergence. Retailers are discovering new ways to integrate digital elements into physical stores, and finding cost-efficiencies so as to invest more into customer experience elements. Sephora was Neville-te Rito’s example here.
  • Enriched engagement. Authenticity, meaning, personalisation and ethics will become increasingly important. Peloton and Muji were listed as key examples.
  • Social community. Consumers are seeking meaningful, ‘trustful’ experiences, and the chance to feel like part of a tribe. Neville-te Rito feels Lululemon and its competitor Stylerunner do this well.
  • Useable data. Companies are increasingly allowing customers to input data to achieve a more personalised, convenient service. UnderArmour tracks training behaviour to recommend other products, and also uses the information to make better inventory decisions.

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