Just saying the word “retail” conjures up images of shuttered doors and boarded up windows or barcode-reading smartphones price-checking on Amazon while strolling down the empty aisles of Best Buy. If you are traditional media you might focus on the pain this industry is feeling, the disruption that is happening and the new normal state of flux that mobile has ushered in.
You could simply look at this situation in a different way. You could course correct, attack it from a different angle and rethink the problem. As Gary Schwartz, author of the new book Fast Shopper, Slow Store, says in this episode, if you are the Titanic your option needs to be to change into a submarine not turn left or right.
So why aren’t more retailers doing this? Surely they get it, their business is in peril, their livelihoods at stake yet they cling to their old business model and feign effort in mobile. The definition of retail has changed but this isn’t anything new – it changed 12 years ago when the Internet ushered in the web storefront, it will change again once the mobile revolution subsides but each of these changes brings with it tremendous carnage, of which we are just underway now.
So what are the challenges and key areas retailers should be focusing on to make the transition? Where are the opportunities for upstarts to disrupt incumbents? What is so exciting about the space between bricks and mortar and the cloud? How do Apple, Amazon, the mall and pop-up stores play well in this disintermediated mobile world where the consumer has all the power? How does the retailer gain the trust, love and loyalty of fickle, promiscuous customers?
Welcome to the world of retail. A rich land of incredible opportunity for the retailers that start getting it right and Gary lays out what they should be doing right now to do just that.
Here is a quick reference of what we covered in the show. Click on the link and the video will take you to that clip
1. Who is Gary Schwartz and what he’s up to 2:30
2. Gary’s observations from the past year – are companies getting it? 3:42
3. Why is mobile dead? 4:25
4. Why is this about connected screens 5:40
5. The mobile consumer is promiscuous and how do you engage with them now 7:00
6. Has the mobile agenda advanced within companies 8:25
7. ZMOT: Zero moment of truth 9:40
8. The biggest challenge for incumbents because of mobile 11:00
9. Why Gary is so excited about the space between bricks and mortar and the cloud 11:45
10. How do companies decide between their legacy business and the place they should be 13:35
11. Who will become the next showrooming company? 14:45
12. What will Amazon do? 16:20
13. Does the mall disappear? 18:30
14. Does the pop-up store have a place in retail? 21:00
15. The interactive position and why that needs to happen for retail 21:35
16. What about big retailers expanding? 24:35
17. Case study: SONY 26:40
18. What is the key to new companies coming in to the market 27:45
19. Where is the opportunity: Gathering the data or using the data? 29:45
20. Why is using Google and/or Apple or any intermediary as your loyalty company a bad idea 31:00
21. Why target loyalists and not the coupon clippers 35:10
22. Why advertising is not good enough today 38:00
23. What is the evolution of retail 40:00
24. Why loyalist engagement is the most important thing retailers can do now 41:30
25. What advice do you have for the retail industry 43:45
My key takeaways
Malls are not dead
The writing on the wall has been there many times for the malls of the world and they have stood up to the challenge. Mobile is no different. We tend to default (and I tend to generalize) that the mall is dead and no one is interested in shopping in these old-school bastions of the dead retail model. Not so. As Gary states many times throughout this episode, malls won’t die because shopping is inherently a social exercise. Stores and chains will come and go but, more than this, the structure and makeup of the mall store will change as well. Smaller? Maybe. More showrooming and less physical product? Perhaps. More choice? Yes. Smaller stores? Perhaps.
Whatever the mall looks like there are opportunities everywhere to shape the way this looks. Ask yourself, what are the types of services that these new malls will need. What kind of stores can use the space more effectively. Don’t forget the impact on the mall owner – rent decreases and subdividing may just be the name of the game and soon.
Do not underestimate the power of dwell
Dwell, as Gary puts it, is an essential ingredient to retail and is a huge reason why he believes the pop-up stores we are seeing right now and the idea that commerce from a poster will become the new retail is not likely any time soon. Those are born from convenience and not a true retail experience. Where there is dwell, there is retail.
It’s the relationship stupid
What is the key to success in retail? Relationships. Not just transient ones, relationships with your most loyal customers. Don’t have any? Start cultivating right now. Identify your ideal customers, start the conversation, show them the love, earn their trust (which takes TIME – hence the “start now” advice) and repeat. Customers are fickle and promiscuous and you need to be active in building and maintaining relationships with them or you will lose them to your competitors or – worse – a lower price. While they are transient, customers that become loyalists will tolerate more, endure longer and actually may pay more for products just because of the relationship they have with you.
Start today. Find your most loyal customers and treat them the way you would want to be treated if you were them. Think about finding your first 100 loyalists and then the next 100.
Do it all for the data
As you identify your most loyal customers you are now in position to use their data – the data they have volunteered to you through their comments, transactions and patterns – to drive up basket size. It’s simple: Retailers either start using data to help their customers or they will be closing their doors.
Picture yourself as a loyal customer to your favourite retailer – one that you’ve spent your hard earned money with more than once. Now picture that company offering a better deal to someone that hasn’t been there before. Someone who hasn’t bought a single thing but is rewarded just for “checking in” or rewarded just for standing in line. How would you feel? Right. We all hate the carriers for offering better deals to newcomers and forcing us to go to them to ask for the same deal. I’ve been with Rogers 20 years – 20 years – and how many times have they come to me to say “we really appreciate your business and we want to make sure you stay with us so here’s the best deal we can give you just to say thanks.” Never. How many times have you done that to your customers? Thought so.
I cannot stress enough the idea that rewarding before purchase sets a precedent that you cannot continue (unless you want to go bankrupt) and one that the consumer will come to expect. Plus, offering a deal to get someone in the door without a followup strategy to get them in the door again is not a healthy relationship. Don’t do it. Period.
Learn this equation: Retail + advertising = Adveretail.
We have entered the era of active retail. The idea of advertising a product and NOT offering an immediate path to purchase is insane. Why go through all the trouble of coming up with a creative campaign, paying for its distribution and not asking for a close? Your goal should be to make it easy for your customer to buy. Plain and simple. At least give them an option.
Advertising as we know it is dying. Companies building their business helping customers reach an audience need to start thinking about how they can enable sales. Look at how you are advertising right now, do you have a path to purchase or are you just sending customers to your Facebook page?
What do you think? Also, what do you think of the new format for the episodes? Do you like the chapters for quick reference? The takeaways? What else would you like to see. Leave a comment or two below or email me.
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About Gary Schwartz
Over the past nine years, Gary has played a leadership role in the mobile industry, founded Impact Mobile in 2002 running the first cross-carrier short code campaign in North America. In 2006, Gary founded the mobile committee for the Interactive Advertising Bureau (IAB) (www.iab.net) (for which he received an IAB award for industry excellence in 2009).
In 2010, Gary was elected as the Chair of MEF North America (www.m-e-f.org) with a remit to develop mobile commerce best practices and advance commerce security and privacy (for which he received a MEF award for industry excellence). In 2011, in partnership with MEF and a number of industry groups including the X9.org security standards body, Gary is working to develop m-commerce security and privacy guidelines.
Gary it the recipient of the Asia and Japan Foundation Fellowship as well as the Macromedia People Choice Award and Dodge Foundation award for innovation. Gary is the author of the book The Impulse Economy.