Find Your Inner Retail Futurist: 3 Takeaways from CRMC 2017
Takeaways from the annual retail CRM and Loyalty event
Takeaways from the annual retail CRM and Loyalty event
This year’s theme for CRMC was “Staying Ahead of the Curve,” which aptly describes (possibly even diagnoses) the current zeitgeist of retail, its symptoms and the elusive prescriptions retailers and marketers are chasing after. But what is said “curve” of retail anyway, and how do marketers stay ahead of it? Like the word implies, it’s a spectrum. In other words, there is no single point to plot on the gamut of retail that will alleviate the industry-wide affliction that is taking place. This reflects the varied range of retailers at this year’s conference and their respective point on that curve. Be they a tried and true department store like Boscov’s, a QSR with East Coast pride like Dunkin’ Brands, or a makeover favorite like Abercrombie & Fitch—each has its challenges, successes and opportunities. Below are three curve-surpassing takeaways from CRMC 2017.
1. Amazon: ‘Take Me to Your Leader.’
Jeff Bezos may not be seeking world domination, but he’s definitely looking to dominate your share of wallet. Oh, and all of your data. In fact, according to Doug Stephens, Founder of Retail Prophet, Amazon takes $.60 of each dollar of incremental sales in retail, and 55% of all product searches are happening on Amazon.com, not Google (that’s over half, in case you didn’t notice). My point here is not that Amazon is quietly becoming a modern Holy Roman Empire of commerce, or that they are so powerful that they invested in their own fleet of 767 jets, purchased the Frankfurt Hahn Airport for its own delivery point in Europe (yes, Amazon literally bought an airport), or that Amazon Echo is silently vying to eliminate retail, CRM and Google for search by installing a 24/7 loyalty device in your home who goes by the name Alexa. The point is that while some retailers are still trying to figure out “omnichannel,” companies like eBay, Amazon and Alibaba are shrinking the competitive set by gobbling up other companies by the handful while simultaneously hitting the retail “reset button,” transforming the supply chain to accommodate the direct-to-consumer business for better CX and global efficiency. And they’re not slowing down (as I write, Amazon just announced its acquisition of Whole Foods). According to eMarketer, those three brands will account for 40% of all ecommerce transactions by 2020. While some brands are hopelessly attempting to combat this reality, smart brands are beginning to find ways to get access to Prime members or cater to these ecommerce behemoths’ customers in ways that make them sticky. Takeaway: There’s been a shift in retail. Success means finding ways to embrace it.
2. Do You Like to Shop? Then You Probably Like Drugs, Too.
Hello, dopamine rush. You know what I’m talking about, that sensation you get when your brain releases that feel good chemical that floods your neural receptors when you take home that new pair of shoes? Those expensive but oh-so-perfect-fitting pair of jeans? Those new golf clubs? Turns out cocaine has the same effect, physiologically speaking. This isn’t a suggestion; rather, an illustration. Shopping in store is inherently a very social experience. Think about it: walking into a physical location, perusing items, trying things on, touching and testing out products, and the guiltily sweet transaction that follows is a reward-motivated behavior at its core (Can’t you just feel those neurons firing off? I can.) And if you don’t believe me, just walk into any Brookstone store the next time you’re at the airport or mall and try to not walk out of there with some worthless gadget. I rest my case. The point? The shutting of physical stores doesn’t mean it’s the end of them. As humans, we crave novelty. In fact, TJ Maxx’s brand positioning centers on this. Doug Stephens is right when he said that “serendipitous discovery is powerful.” In a world now ruled by algorithms—LinkedIn, Netflix, Facebook, Amazon, Spotify—unscripted moments and interactions are worth their weight in gold. That’s why online-only retailers like Bonobos are opening “try-on stores”, or creating physical locations like Warby Parker and Amazon are doing. The purpose of the store may be changing, but its nascent power and allure as an experience is not. Takeaway: If you build the physical, human connection, you can foster the ‘dopamine experience.’
3. Mind the Experience Chasm.
Remember when we treated experiences like an old picture in a photo album? People used to ask questions like, “What was one of your favorite experiences growing up?” or “Remember that time we went parasailing in Key West? That was such a great experience.” Now experiences are something we seek to measure, define, bottle, sell. This isn’t my inner Walter Matthau coming out—I understand that, as we all do, along with the exponential rise of technology in our everyday lives comes the equal scaling and expansion of this phenomenon’s byproducts. And that includes just about everything we do. This perhaps precisely illustrates the very disconnect that retailers, brands and marketers are trying to solve. For the last 180 years or so, stores haven’t changed, nor has the model: They serve as inventory repositories whose sole purpose of existence is to attract visitors, buttressed by a brand story that generates product interest enough to make you want to be that visitor. We need to turn this concept on its head. We need to rethink product distribution and focus on “experience distribution.” Doug Stephens argues that in order to achieve ROX (return on experience), retailers, brands and marketers need to ditch the antiquated idea of $/Square Foot and embrace the concept of Experience/Square Foot and leverage a fresh new set of retail metrics—things like product interaction, staff engagement value, dwell time, aggregate navigation, and unique versus repeat visits. Takeaway: Experiences lead now. They are the new the product.
So, what to make of all this? There’s a call to action in here somewhere, I think. As literally everything about the way we shop is changing, for retailers, brands and marketers, the emphasis is now on creating unique experiences. And the only way to do that is to flip our proverbial “scripts” and turn our stories upside down. Inspiration? Tesla changed car buying. Starbucks changed the language of coffee. Uber changed hailing a cab. But in order to change, to innovate, to disrupt (and possibly fail), we must all leave something behind. Something that makes us, well, very uncomfortable. What are you prepared to leave behind?