Protecting Your Mojo in a World of Retail VolatilityOctober 12, 2016
It’s become an all too common story: Hugely successful retailers that have all the right product, capture consumer attention and eclipse the competition, only to lose momentum and relevancy, and fall into a downward spiral from which they never fully recover. But what would real recovery take? The news is filled with story after story offering perspective on why our industry is struggling, with once iconic retailers, serving as proof that correcting course is an enormous challenge.
In retrospect, one can often pinpoint the series of events that contributed to a brand’s loss of significance and led to its decline. But rather than trying to diagnose why retailers lose their appeal, the more important question to ask is How can a retailer protect its “mojo” in order to sustain momentum and relevance in this age of such tumultuous evolution?
Be Customer Centric – For Real
While plenty of retailers talk about putting the consumer first, few are actually making the necessary changes to create a customer-centric business model. Of course, having the rig
ht product matters, but to be truly customer-centric, retailers need to understand what their target audience really wants and needs, and then create sustainable processes and practices to keep up with their ever-changing impulses and demands. This requires a company-wide effort where understanding the customer and operating accordingly becomes part of a retailer’s DNA – how we think, talk, act, and make strategic choices across the company.
Innovate or Fade Away
Make no mistake — innovation is a competitive necessity. Historical performance is no longer an indication, or guarantee, of future success. As we know, consumers today expect quick, easy and convenient shopping experiences, where all commerce channels are aligned. To achieve this, retailers need to invest in the right technologies and processes – whether it’s order fulfillment, mobile capabilities, or advanced analytics. Our changing landscape offers lots of options for investment – choose those that will deliver the best brand experience and earn loyalty from your customer.
Test Before You Invest
Most retailers test new concepts, pricing, products and marketing efforts all the time. However, tests can be costly and investments can easily be wasted if they are not constructed in a way that provides a valid read on results. Effective testing requires full visibility and management of activities across the entire organization. The smartest retailers approach testing as a central function with standardized tools and approaches to design, manage and measure all tests and outcomes. Without a centralized effort, companies cannot achieve clear results or take the necessary actions/next steps towards success.
Avoid Overexposure and Dilution
Retail growth strategies are often based in brand spin-offs and/or product category expansion. But as too many retailers have learned the hard way, it can be a challenge to maintain equal focus on multiple businesses at one time. Multi-brand retailers need to look at their merchandising and promotional strategy holistically to ensure that they are not diluting one brand in favor of the other. The same is true for category expansion and licensing. Retailers will be wise to focus on products/services that make sense to their customer, and avoid investing in a business that will take them away from their core or distract internal resources from what matters most.
Data, Data, and More of the Right Data
Today’s retailers have more consumer facts and figures than our predecessors could even imagine. But to truly understand the customer requires collecting the right data points – those that indicate not only what shoppers think, but also what they are (or are not) purchasing, and why. In the digital world, data collected from Social Media channels is just as vital as information gathered from traditional sources such as focus groups, customer service interactions, or customer surveys. But keep in mind, not all consumer input offers the same importance and value. Having a well-defined target customer allows a retailer to filter its data funnel and access the most necessary feedback from its most relevant audience.
Of course, these actions are not intended to be quick fixes or stand-alone strategies to sustainability. Long-term success comes from embedding strategic concepts into a retailer’s DNA. Leverage the voice of the consumer when faced with product choices, service direction and innovation decisions. And don’t wait to take action. Act now. Act often. And protect your retail mojo.