Last week, during my presentation at the Retail Leaders Forum, I got a really interesting question. Someone asked that Should we stop referring to ourselves as retailers – and instead start thinking about ourselves as entertainers? They referenced the founder of Selfridges who, in 1909, changed shopping forever by bringing theatre into the experience, with live music, dancing and interactive displays.
Today, although live music may be off the agenda for a while, entertainment is a great way to think about the customer interactions we have with retail customers across all channels: both at home and in the physical environment.
Entertainment might sound a bit frivolous right now. However, consumers are ready to be entertained – and retail is the right industry to bring them that experience.
As the world was flipped upside down by COVID-19, retail became centre stage of our national response. As someone who has worked in and consulted to the industry for 21 years, I’m super proud of the way we have stepped up during the crisis.
When the COVID-19 hit, retailers moved at pace, wrapping a blanket of care and safety around frontline teams, shoppers and our most vulnerable in the community. Despite suffering incredible supply chain challenges, the industry has been relentless in the push forward, prioritising the need to ensure Australians have the essentials to be comfortable as they shelter at home.
In the last six months, retail has emerged as a voice of reason and a government influencer, building out trust with consumers. The question now is: What’s next?
I think ‘what’s next’ is building on the relationship value we’ve established; however, moving away from traditional retail business models to marketplace platforms and recurring engagement models. The next era of retail will see us shifting our focus from traffic, conversion and basket to revenue per consumer. Future KPIs will be about customer acquisition and churn, finding and keeping our most loyal and profitable brand advocates.
To do that, it's not enough anymore to look at the ‘old truths’: convenience, relevance and trust. Those ideals used to work, but they were largely based on instinct and gut feel. Today, we have a new set of tools to help us evolve those ideas: data and analytics.
So, how have these evolved?
- Convenience is now experience. When consumers shop online, the experience is what happens when the product arrives. A new take on “surprise and delight”. Beauty company, Birchbox, understands this. Instead of waiting for consumers to shop, it offers a subscription-based service, where for a minimal monthly fee consumers receive a gorgeous personalised monthly package of 5 samples to update their beauty routine. Birchbox uses data to refine the package each month, curating the experience to convert trial into future purchases.
- Relevance is now active listening. Intuition and a good eye are no longer enough. To be relevant retailers must be able to tap into precision occasions: we must own the moments that matter and understand the context of each, how our consumers interact with us so we can respond to sentiment. This is how Drunk Elephant is winning in the marketplace. This ‘clean beauty’ digital native runs the pop-up event ‘House of Drunk’ every year offering instagrammable moments, customised skincare smoothies and new product launches. This isn’t some cool idea generated by a switched-on marketing person! Drunk Elephant is rigorous in its drive to source data from diehard fans, which it uses to inform its future product development. This is entertainment curated from data. Art driven by science!
- Trust commands loyalty. To win in retail we need to place consumers at the heart of every touchpoint. This is how we will engage with, serve and build trust with consumers to gain loyalty and lifetime value. Patagonia does this brilliantly. It’s a brand cloaked in activism. Patagonia’s social campaigns speak to the heart of its brand advocates, who reward the brand with undying loyalty.
To go back to the original question. Are we retailers now entertainers? You bet we are! But this is not entertainment based on gut feel. Consumers are increasingly willing to share their data in return for great experiences. And data is what will permit for us to sense and comprehend customer needs, so we can curate precise yet hugely entertaining experiences for our consumers – wherever they are.
By the way, whoever asked that question, I'd love to talk to you further. Please reach out to me on LinkedIn.
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