Last week I was thrilled to attend and present at the annual Shop.org event in the great city of Chicago. I attended many great presentations, talked at length with the vendor community, and broke bread with some of my old eComm friends. One observation that was more apparent to me this year is the massive transformation happening in retail. It feels more dynamic than it did at the peak of the dot com boom of the late 90’s. For me there were clear trends emerging:
- There is a palpable divide between forward looking retailers and those stuck in second gear. Going after incremental improvements such as checkout funnel analysis and improving page load speeds are still important functions, but these are now table stakes that most digital businesses employ. Forward looking retailers go beyond site optimization and look at advanced analytics, leverage social graph data to better understand their customers, and employ mobile strategies that add contextual relevance rather than simply emulate the website.
- Omnichannel is the hottest topic, but it means different things to different people. The reality is most retailers fail to understand the complexity around creating a seamless experience for customers, and often fall back on defining their omnichannel initiatives as simply creating a singular presentation across all touch points. For organizations to truly support the needs of the customer, they need to focus on aligning supply chain, fulfillment, customer service, and operations around the specific needs of the customer. For instance, enabling the store associate to engage digitally-savvy customers requires new training, new technologies that facilitate assisted selling, and new compensation paradigms that reward the associate for driving sales in any touch point.
- Vendors are rapidly innovating, and many retailers aren’t ready for these new capabilities. Large retailers with hardened enterprise systems are slow to adopt new technology due to the complexity of modifying their systems. In addition, these retailers have entrenched organizational structures and cultures that are inward focused and aligned on channels rather than the customer. I’ve heard from many of my colleagues from the vendor community that they have to dumb down their presentations to better match the mindsets of retailers. For retailers to effectively leverage technology to meet the needs of their customers, they will need to become more agile while at the same time mitigating risk. Vendors are more often than not providing solutions in the cloud to help retailers move quickly without investing big dollars in CapEx.
What It Means:
- Having a defined vision is more important than ever. Retailers must adjust to ensure that their vision is evolving with the needs of the customers, and this vision must be clearly communicated by the CEO. Without this clarity, teams tend to focus on incremental tasks such as site optimization rather than transformative initiatives that leverage the changing expectations of customers.
- Taking a wait and see approach won’t work in today’s rapidly evolving retail environment. Retailers who do not take action today to innovate will be watching from the sidelines as their competitors out-maneuver them. Retailers who wish to remain relevant must be more agile, leverage new capabilities from the vendor community, and not be afraid to fail…fast.
- Your physical stores are staring disruption in the face. Customers dislike sales associates, and end up turning to their smartphones for expert advice. The role of the sales associate must pivot from simply providing information to facilitating engagement.
I’ll be presenting at Forrester’s eBusiness & Channel Strategy Forum in Chicago on Tuesday November 5th, and will be discussing some of these topics in my breakout session. I hope to see you there. In the meantime, if you have any feedback from the Shop.org event that you’d like to share, please comment below.