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Pioneering a retail reinvention

  • In association with Latitude
  • September 28, 2017
  • Sarah Dunn
Pioneering a retail reinvention

Retailers who care about their customers and have mastered the art of making money while doing so shouldn’t fear the increasing challenges of the industry, says retail strategist Juanita Neville-Te Rito of Retail X. She was the keynote speaker at Latitude Financial Services’ thought leadership series breakfast, ‘Transforming retail pioneers: From selling to seduction”.

The event was intended to help equip retailers with an understanding of the key trends shaping retail, and how they need to reinvent their businesses to survive in an increasingly competitive environment.

The previous decade of retail has been marked by profound transformation, Neville-Te Rito says. The advent of ecommerce has shifted a retailer’s responsibility from being store-based into creating a three-dimensional “ecosystem” of virtual, digital and physical expressions of their offer, and the customer’s shopper journey has never been more complex.

“It can take, as a retailer, nearly magician-like skills to figure out, ‘How do we connect with these consumers?” Neville-Te Rito asks.

The answer lies in prioritising the customer’s experience, she says. Retailers must accept that shoppers are irrational, unpredictable creatures, but they do crave rich, seamless, engaging and frictionless experiences.

“You used to be able to stack it high. You could control how they wanted it, when they wanted it.”

However, that kind of attitude doesn’t fly anymore – with so many options and alternatives on the market, paired with an ever-decreasing attention span, shoppers demand their retail experiences on their terms.

Retailers which persist in presenting a “mediocre, crap” offering will perish, and deservedly so, Neville-Te Rito says. Successful retailers now curate and create experiences; educate and innovate; challenge and entertain; or engage and involve.

“Today’s consumers do not buy just products or services—more and more, their purchase decisions revolve around buying into an idea and an experience,” she says. “Retailers must present value to shoppers beyond product and price.”

A critical point of Neville-Te Rito’s talk is the concept of ‘total retail’ – understanding that every part of a retail business must operate seamlessly, efficiently and effectively. She also recommends retailers start thinking about how storytelling can enhance their strategy.

Among the case studies Neville-Te Rito explored were furniture store Made; menswear company Bonobos; and mega-DIY store Lowe’s. Each of these companies used technology to provide solutions to problems gleaned from customer insights.

“Every business we have talk today have taken a step back to understand their shopper and started to focus on the specific audience opportunities. Not thinking of their shoppers as demographics but tribes with attitudes, behaviours and values that unite them.”

She also touched on shoppers’ growing appetite for social responsibility when mentioning eyewear retailer Warby Parker and the free supermarket opened by food rescue organisation OzHarvest.

High-end sneaker store Sneakerboy illustrates what can be achieved by harnessing shoppers’ thirst for community with its DSX – ‘distressed stock exchange’ – which allows them to display, buy and sell second-hand sneakers from one another within the store.

Neville-Te Rito’s distilled advice is:

  1. Have a clear proposition which answers the customer’s question: “Why should I choose you over every other retailer that operates in your category?”
  2. Be distinctive, offering something no other retailer can. This may not necessarily be exclusivity or price, but it could be depth of range, a better experience, etc.
  3. Connect with customers on their terms and treat them with respect: “Truly understand that a customer likes to feel individual and important.”

Latitude’s director group sales and managing director NZ Greg White closed the event by asking a question about the “hysteria” seen in the Australian retail market in response to Amazon’s impending launch. Neville-Te Rito says due to the differences in infrastructure between the two countries, Amazon may well find New Zealand a less-tempting market to enter.

Case study: Sephora, Powell St, San Francisco

“The interesting thing about Sephora is that, largely, you can buy their product anywhere else,” Neville-Te Rito says.

What attracts flocks of highly-engaged customers to the cosmetics retailer is its focus on customer experience. It offers a multitude of digitally-enabled opportunities for hands-on experimentation, allowing customers to not only touch, feel and smell the products, but to feel like part of a community.

Sephora also offers a smaller-format store in its Sephora Studio, and with the ‘Flash’ concept seen in Paris, Sephora is trialling a store which lets shoppers browse with a credit-card-sized digital shopping basket. They use the NFC-embedded card to shop, pay at the check-out, and then their goods are delivered to their home at a later date.

Experimentation with technology can be magical, says Neville-Te Rito, but she warns that retailers must ensure their technology is useful and relevant. Investments into poor technology are better spent on human resources, she says.

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