Fresh back from another visit to the National Retail Federation’s “Big Show” in New York, I duked it out with 36,000 visitors to see the industry’s showcase capabilities and vendors arrayed in the expo halls. It’s interesting to see how retail as an industry is changing the value chain. Back in the last decade we had ecommerce as a ‘bolt-on’ or side project and the casual visitor would see the store as preeminent, with some digital bolt-ons. Track forward to 2018 and, in addition to multichannel and digital enablement of stores being the new orthodoxy, we also see a trend of getting closer to the customer.
We’ve moved from marketing ‘at’ people and then optimising ‘conversion’ to a straight-faced discussion about the customer’s experience. Last year this experience was still focused on the attract/engage/convert/retain cycle, whereas this year we see a focus on data collection (in-store and online) and using this to drive differential service and experience in-store and via digital interfaces. Mobile, web tracking, ERP, Big Data, Clouds and AI are all bending towards a new co-operation that underpins the modern retailing experience.
With so many consumers now fully accustomed to multichannel and digital experiences we need to move beyond a simple convert-and-remarket approach. We need the experience post-purchase to be in line with the promises made up to the point of sale. I suspect that this post-sale ‘living with the customer’ will be the focus for retailers in the coming years.
This ongoing connection will be powered by a combination of data and analysis – following the ‘character test’, namely do we behave differently to customers following the insight? The ongoing data relationship was evident when I had a hands-on demonstration of Google’s collaboration with Levi’s, creating a denim jacket for cycling that has sport-specific adaptations as well as conductive threads woven into the fabric. These threads connect with and control the ‘Jacquard’ platform (see more at atap.google.com/jacquard/), which connects your phone controls with touch input on the jacket. Initially I was very sceptical about this – the core functionality is little more than can be achieved with a remote headset – however the ‘system’ (if that’s what we must call our clothing now) is polished.
Of greatest interest, however, was the data visualisation platform. Subject to the necessary user permissions, Levi’s can now have a relationship with you based on how and where you use the jacket. The company will have access to your commute, the music you listen to, your frequently used commands and apps. This offers Levi’s a much more relevant conversation opportunity than the usual “you bought this a year ago so please buy it again”. It’s conceivable too that the jacket’s data could link with Google Home data, your search history, your washing machine, your electricity tariff, and even know when you put on weight. Retailers need to be planning for these rich, connected data streams and build into product development, service and experience planning.
With this rich data we’ll need more responses to the customer than simply ‘more email’ or ‘targeted offers’. Brands such as Rapha connect with their customers’ cycling passion through the Rapha Club (where customers can connect and ride with the Rapha team, staff and friends across the globe) or by offering to replace any clothing items damaged in a racing fall! We still of course get emails about new products and seasonal sales, but these are in the context of a 7-day-a-week cycling passion – something that they share with customers.
White goods manufacturers can engage in saving energy and water, reducing detergent use, and supporting domestic activity. They will have a valid position based on their global data view and expertise. This is a step ahead of ‘loyalty’ or activation programs that trade an extended warranty for permission to spam the customer, and opens new avenues for ‘commercial conversation’ based on relevance and real value. The approaches for this next phase of retail will build on the good marketing and product principles already embraced by our best retailers and brands. We will see new collaborations, innovative lines of business and sustained service offerings that give us a place in our customers’ lives – not just a moment with their wallets.