A brick-and-mortar retailer’s two least favorite words: COVID and Amazon. While one is a deadly pandemic, the other has a similar effect on physical retail: driving consumers to stay home and buy online. In today's world, where both pose a threat to retailers, how can you continue to grow sales and retain customers?
For brands who are focused on modernizing their retail, there are 3 key areas to invest in order to find sustainable, competitive advantages:
- Omnichannel Mix
- Customer Experience
These are not novel concepts for retail, but when it comes to conquering pandemics and the retail giant that is Amazon, we should think about them in different ways.
The New Omnichannel Strategy
Seeing the word "omnichannel" on any retail strategy list should not surprise you, since the buzzword has dominated retail for the better part of two decades. Originally, omnichannel described how brick-and-mortar retailers were moving online and/or wholesaling to generate more sales. Now, it's about pulling data across all the different sales and marketing channels to deliver more consistent customer experiences and personalized messaging.
The next frontier of omnichannel, though, is about breaking down the internal barriers across those channels and enabling every part of your organization to participate in an orchestrated, intentional relationship with every individual customer.
There are seemingly unlimited ways to measure the impact of online presence to in-store traffic and vice versa, yet each channel stakeholder is generally compensated or measured by the performance within their respective channel. See the problem? This model drives performance to be "silo-selfish." Shouldn’t stores be rewarded for driving an experience so excellent that the customer decides to continue their purchasing online? Does product placement at a wholesale stockist drive customers to check out your Instagram? Or did a mobile ad capture your customer’s attention at just the right time to get them to stop in on their way home from work?
One way to avoid reviewing channels in isolation is to find a weighting system to reward employees more holistically, where their success takes into account their direct channel and their impact on other channels. This approach, however, still requires detailed attribution models that may or may not be available. Even with the right model, it can be hard to attribute those successes to individual or team performances. The more optimal way is to redefine KPIs and technology in order to break down perceived barriers altogether. In doing so, you can amplify your marketing team by the power of your store, e-commerce, and wholesale teams, where each stakeholder feels empowered to deliver your brand’s core messaging and value to each customer - no matter where they're shopping.
Of course, Amazon will continue to try to diversify into omnichannel with acquisitions like WholeFoods and creative concepts like Treasure Truck. However, the breadth and variety of their offerings and the siloed divisions within the company will make it nearly impossible for them to compete with you if you embrace the new frontier of omnichannel. Their size becomes their problem instead of their advantage.
The other benefit of an internal/external omnichannel approach is it de-risks the company from both global and local events. For example, in the aftermath of retail layoffs and furloughs for millions of workers, as stores reopen, retailers are now now struggling to find the right talent to provide the consultative and knowledgeable expertise their customers expect. While having an online presence likely helped mitigate some of the revenue losses for companies, the siloed approach led to a colossal failure in the arena of human capital. In a cooperative, un-siloed omnichannel strategy, top sales associates could have been retained to engage with VIP customers from their stores and continue driving sales.
Customer Experience Is (Still) King
The customer shopping experience has been a focus for retailers for nearly two centuries. Merchandising and store display teams have been around since department stores like Macy’s started selling a way of life back in the 1800’s. But the arrival and growth of e-commerce dramatically expanded the potential ways a customer engages with a brand. While increased touch points means more opportunities for customers to buy, it also adds more work for brands to ensure their customers' experience is always positive and consistent. As customers bob and weave through online and offline channels by taking advantage of services like BOPIS and BORIS, or texting with a sales associate after meeting them in store, you have the opportunity to provide such a high level of service and ease of purchase that customers will never want to shop with anyone else. By focusing on the actual experience of shopping with your brand (instead of just the products, discounts, or marketing), you can put yourself miles ahead of big-box retailers like Amazon and increase customer retention. This way, customers are inclined to stick with you because they know all your channels will serve them well.
Relationships are an area where technology-driven companies like Amazon are completely out of their depth. When people picture relationships in retail, most still think of small-town businesses who know their local customers by name. But thanks to modern retail technology, that same closeness can exist not only in major cities, but in a remote or digital capacity as well. Similar to providing a top-notch customer experience, relationships are key to motivating customers to consistently bring their business back to your brand over more transactional, volume-driven sites like Amazon. The key to good relationship-building is having the right tools to scale while keeping all customer names, preferences, and habits stored in a safe, but readily accessible, way. While Amazon might be great at having "everything," they're not so great at the human aspect of shopping. Offering your customers a dedicated, knowledgable human they can turn to when things get complicated or confusing is yet another way to ensure all shopping activity stays within your brand network.
As the pandemic waxes and wanes and as Amazon continues to grow, now is not the time to throw your hands up in defeat. In fact, it's time to think about how Amazon's growth creates space for you to differentiate. By focusing on your omnichannel mix, the customer experience you deliver, and the relationships your customers have with your brand, you'll be able to stretch every marketing dollar even further by increasing customer loyalty and therefore, customer retention. Being a huge corporation isn't always a positive - sometimes it creates an opportunity for David to defeat Goliath.