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The new retail covenant: the ‘right product’ in the age of ‘every product’

Modern retail is based on principles honed over a century of competition. Assaulted and squeezed by suppliers, competitors, alternatives and customers, Ian Jindal asserts that retailers need to forge a new covenant with customers in order to thrive in a ‘post-retail age’.

RETAIL IS a gamble with capital. Stock, stores, staff. From the days of the very first general stores (I’m thinking of a dusty crossroads in the American Wild West), a retailer had the gumption to risk their own capital to purchase stock that – in their estimation – their catchment customers could be persuaded or need to buy. We now risk our capital to fund marketing acquisition or ecommerce platform development too, yet we are still essentially operating as optimisers of capital, with the ring of the till never far from our focus.

The customer, however, is spending proportionally less time with us. Attention – a precious commodity against which we should optimise – is being held in new places.

Brands have their own narrative (Sunspel blends James Bond, the Riviera in the 1950s and hipster chic; while Nike uses technology to unlock the athlete within us all). Influencers range from knowledgeable bloggers (DCRainmaker who’s left his job to manage his triathlon site); to new titles that herald consumption as part of an aesthetic (Monocle); to eclectic gatherings where customers determine what to buy and sell with style (Depop).

The challenge for retailers is to frame a narrative with customers that’s not solely promotion-led, discount-driven and convenience-focused (after all, when Amazon has ‘everything’, available within hours at a cheap price, “convenience” takes on a different meaning than opening hours, location and an occasional smile…).

The qualitative difference between brands and retailers is that brands tell you how to enjoy their products (an ‘advance sell’ of expected experience) and then remain with you as you enjoy them. Retailers tend to own the spam-to-kerching moments. New retailing requires a shift from the till. Whether we call it content marketing, curation, editorial, style, personalisation, the name is irrelevant: we need to inspire and converse with the customer about more than handing over cash.

Retailers should have an advantage here. Rather than a small ‘brand team’ they have thousands of trained, on-brand frontline staff. Whether in stores, contact centres or managing the Twitter account retailers need to engage and empower their staff to curate an experience for the customer.

Curation – from the Latin root to show care – requires a focus on the customer. To understand what’s important to them, and to take steps to offer that up. Caring. For curation to succeed in an organisation there needs to be a caring culture. Not sloppy or lacking in rigour, but suffused with care: supportive of tests, understanding of ‘good failures’, offering rather than taking and rooted in the customer. A curating retailer is transparent, open, giving, consistent and characterful.

Herein lies the real challenge. Retailers have evolved to exploit capital, infrastructure and operational clout – but with a sprinkling of marketing magic on top. Lipstick on a pig.

The new covenant with a customer requires that we can initiate and sustain a relevant conversation with them, curating a combination of narrative, experience and suggestion that is relevant to, and inspiring in, their lives.

This change in perspective is at the heart of the “Transformation” work many retailers are facing. Technology and operational questions are largely solved problems, and good practice can be replicated. Building a culture of curation, however, is unique to each retailer and requires clarity, authenticity, courage and consistency to implement and sustain.

This may seem like a lot of work for an intangible goal: a goal that’s uncomfortable and challenging. It is a real test for retail leaders. However, nothing else you can do as a retailer will fit you to forge a new, sustainable covenant with your customer – a covenant that will see you thrive in a post-retail age.

The alternative? Place your finger in a bowl of water. Remove it. It doesn’t leave a hole.

The research behind retailers’ performance in Europe and the rise of brand selling direct will be published next month in the inaugural IREU Top500 ranking, and discussed at our first European Summit in Berlin at the end of June –

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