This post is an adaptation and translation in English from a previous papier. This work has been done by Romain Hermelin, as part of the project “The retail environment in
the TIR economy “. Thanks Romain!
When someone shows you an object, some of us will look at the hand and some others at the direction it points at. My feeling is that marketers invest lots of time and money to try to use technology in order to extend current models of distribution while they should reinvent them via the software. The digital society that is developing will be built on the software rather than on existing 20th century patterns, text and physic size/distance oriented.
We are shifting from an industrial society to a digital society. It is not just an evolution, it is a revolution for all its participants.
In the present digital era, who, nowadays, believes that trade will be based on the same patterns and practices than the ones from the industrial revolution?
We are changing from a “PUSH” society to a “PULL” society, we have to rethink business models, starting with the digital.
It is necessary to create new models, patterns and practices, those correspond to this new society: the digital society.
The customer path: in the industrial society, it was very important to guess where the traffic was flowing because there was a physical activity. To enter in a shop, you had to go through the door and to pay, one had to go to the POS line…Today, you buy from home with your computer, you pick in store shop or you order with your smartphone in store and you get the goods delivered to your home…
One customer, one experience, one path.
Therefore, to try to guess the consumer traffic is pointless. What we call ‘business capability map strategy’ is the way to go. In the PULL society, basics steps in the buying process have to be interconnected and creative, hence capabilities are more important than the process. In short you have to give your customer all the tools to be able to be creative and “capable” to be involved. As soon as he feels confident to do so, there will be a “snowflake “effect and a word of mouth outcome via social media.
POS digitalization: It is always very fun to implement digital tools on retail sites to inform and entertain the consumer. However, it is a lot more interesting for repeat business and long term profit to work on the shopping experience in a digital era than the management on retail sites digitalization.
Eventually, trade is based on 3 components: transaction + information + emotion. In a digital era, transaction and information have to be available at any moment in a retail environment. If you haven’t facilitated the access of these two for the customer, then the competition will take care of it!
Therefore, in a retail space, these two components have to be available to the consumer but also accessible to the shop staff. The last component left is emotion and fortunately the human factor is the best vector for it.
For any brand and their strategy, the work will focus on the most efficient mix of those three components in the retail space. Once will deduce how to implement fundamentals for services and devices according to the brand strategy for the best optimization for running transaction and information. Then we will imagine the optimal situation for an emotional relationship between the consumer and the staff in the yesterday physical “selling” space which is (in a digital society) renamed “sharing” space. We could determine then the need of digital strategy in each brand as we appreciate the level of emotion between buyer and provider.
Client commitment: Today, when we talk about customer commitment, the usual question is “How to force the customer to commit?’’ Which is completely logical in a “PUSH” society, a society of mass marketing. Fidelity cards, Club members, promotional / Discount OP have become a “must have” for all brands, rather than a sign of distinction, a “plus” of differentiation.
In the PULL society, the initiative has to come from the client for the engagement to be valuable. We must give the opportunity for the client to be tempted to give to the brand, to have the appetite to do so. For this, TRUST is the only key, a trustworthy relationship that is not a strength of the PUSH society, the real work is there: Implementing
CRM, business models and Sales management in order to suit a commitment that is chosen and driven by a versatile consumer who can PULL at any time.
Cross Channel: It isn’t a question in itself anymore, it will even probably slowly disappear. The goal is to master the mapping of capabilities activity and put them in perspective to suit the target users: the customers and the staff, especially in regard to the usage and the benefit of using all those new digital tools which interconnect them. In other terms, we must show to the most profitable customer – at least the one whom we target – the most natural route that suits him/her the best to choose what he/she wants while composing with and using all the basics options.
Basic options are: looking in the catalogue, buying, tracking orders, getting an answer to a question, managing commitment, communicating, sharing, etc…
Depending on different business models of distributors, some activities will be more or less important and will be more or less accessible (smartphone apps, Web design, Ipad instore, etc..)
As a reminder AMAZON is a CRM and a logistic company, Myer is focused on supporting its client web/retail, BigW or Costco is focused on price and NET-A-PORTER is a media but they are all considered E-Traders!
This mapping is fundamental in order to master investments in the light of a chosen strategy and not to blindly follow hype and fashion. I think of companies which invests a lot of money to elaborate an Application that is very often managed by only a third of the people who use it. Furthermore, results are very minor and rarely synchronized with the overall business. However, those companies can proudly affirm that they have a strategy cross channel, where in fact what they have is an application that has been designed for a mobile and not an application optimized for a mobility situation ( not as versatile ).
A brand today has to choose between two strategies : either expand its model with the help of the digital, or rethink its model in order to succeed in a society based on digital : Cross channel, POS digitalization, Customer path, Client commitment, they will all be decisive in order to express the brand’s choice, but SHOULD NOT be its origin.