How Retail Must Evolve as an Industry to be Relevant to Customers

Retail Store of Tomorrow . . . Today! | Networlding.

I reviewed a blog post today from Melissa Giovagnoli, the Founder & President of Networlding.  I think she has really hit on something with her concept of a Networlding Genius Bar.  With social media becoming much more pervasive and widely used around the globe, it is certainly a concept that is coming of age.

We have seen an explosion of User Generated Content, on-site product reviews and online survey tools over the past few years.  The world is evolving to a new level of two way communication.  It is no longer just about push and/or pull marketing, but a real and deeper relationship with your customers.  In order to have that relationship, you must invite them to the conversation and allow them to say what they want, when they want, where they want.  You cannot filter out the good from the bad, nor can you simply ignore the bad.  Many consumers look for reviews on products, services and companies today before making their purchasing decision.  Their decisions are rarely based on price alone anymore. It is more about the customer experience as they are seeking the whole package, including companies that understand them, treat them well, and obviously have what they are looking for. Please take note of the fact that I said customers above. There are many buyers who still purchase on price along, but they are mostly bottom feeders who you will not have a long term and profitable relationship with. The key is to get it right with the 20 percent of the customers who make up 80 percent of your revenue. If you get it right with them, through the use of word of mouth, they will invite others to the dance.

Now that you have read my pre-able, and hopefully read Melissa’s post from the attached link above, I am going to take a slightly different spin and focus on what senior retail executives should be locking themselves up in a conference room to begin white boarding to develop strategies for including social commerce and a 360 connected engagement with their customers into their marketing and brand strategies beginning immediately.  It time more retailers of all sizes, shapes and types begin to not only embrace it, but use social media and commerce as a competitive advantage. We have never had access to so many robust tools that enable us to have a two way dialogue with our customers that can foster truly deep and meaningful relationships.

Apple has done a brilliant job engaging with their customers in a friendly and informative way through their overall retail experience and in particular the Genius Bar.  They have created a cult following.  The Apple store experience is superb and something others should take notice off.  They continue to innovate from a product, store experience and distribution perspective.  They have really mastered the art of bringing the brand alive in everything they do, through a consistent and high touch customer experience.  Whether you are a buyer of an iPod, a MacBook Pro or an iPhone, you get a high touch experience within the Apple store and if you need help, the Genius Bar is on site to address most of your issues.

I submit to you, the new retail imperative is the need to introduce social networking and commerce into the shopping experience across all channels. You need to bring some of the new online social networking and engagement models into the store experience.  This can pay dividends in that it deepens the relationship and engagement with customers, while also creating a community which enables the community members to connect with one another and generate their own content.  This would be analogous to the developer communities that are so busy building app’s for the iPhone and other companies/devices. Connecting with your customers 24/7 in a 360 degree fashion will make you more relevant with your customers, by being there when they want you in a seamless and channel agnostic manner. This will lead to and re-enforce the deeply connected relationship you want with your customers.

Additionally, stores should leverage the data they have on their customers to help aid in the browsing and shopping experience even more.  They can use predictive modeling to assist in suggestive selling based on profile data, purchase history and store visits.  Shoppers should be able to use a devise, such as an iPhone, to log into their profile while in a store to “like’ items, as well as tracking items for future sale events, etc.  This would give the retailer a better glimpse of the customers intent to buy.  This data can then be used by the retailer to generate one-to-one communications and promotions for customers.

With GPS tracking being so pervasive today, why not use it to your advantage, as a retailer, to monitor shoppers and their browsing habits.  Here is a wild idea, that I think could be a real differentiator:

As part of a loyalty program, create a community that allows customers to connect to one another, as well as to the retailer.  Let them all have a conversation where they can ask each other for input on questions they have pertaining to a future purchase decision.  They can get some of this today through online product reviews.  Take it a step further and let them access this from within the store.  Take that a step further and allow customers to be tracked when in your retail store with a home grown or licensed app like Loopt or Brightkite.  You can have someone in command central within your store that is monitoring customers who are in the store and also tracking associates to see if they are helping the customers, because they will be tracked also.  Each co-worker can have a handheld devise that enables them to see when customers from their loyalty program are in the store, click on their profile and review product recommendations within the section of the store they are shopping, based on category modeling that has already been done in the background and just waiting to be used when the customer enters the store.  Just think how much brighter your sales associates would seem.  You can also improve your modeling down the line by comparing the recommendations made to what the customer actually purchased.

Additionally, you can allow the customers to create something similar to a wedding register in which they can click on an item bar code to put it in their wish list for future purchases or to share with others as potential gift items.  Associates would be able to see this the next time the customer comes to the store and do suggestive selling against it. You could ping customers with special one-to-one offers when they are near your store, or in your store, based on what they have “liked” or purchases in the past. Make it real, make it relevant and make it right now, with a strong call to action and limited time offer just for you! Use your customer data and your technology to create a one-to-one conversation that is highly relevant, rather than just being a recipient of a one-to-many saturation mailing to drive store traffic. The more you can make it about me, the more likely I am to feel connected.

GPS tracking within the store would also allow the store to see how much time customers spend in the store, where they go in the store, if and what they buy.  This is essentially a brick and mortar retail version of Tea Leaf.

Lastly, with Facebook now having in excess of 200 million users, why not have your own Facebook page to create the community experience. Have a similar section on your website. Have store associates ask customers if they would like to friend your brand. Additionally, get them engaged with Twitter and have a team within your organization manage an effective and meaningful communications strategy across these and other social platforms. It is not just about being there, it is about being relevant, always on and engaging in the right way, based on the spirit and meaning of your brand.

Give this some thought and have some fun with it. I guarantee you that you will have to be here eventually. The social conversation is not a passing fad, it is a new way of being. Therefore, be bold, be early and be relevant.

My 30,000 Foot View of Web x.0

I have been having many conversations of late with clients and friends about the evolution of web commerce.  I have been on the multi-channel marketing scene for over 20 years now and have watched the evolution.  When I was a teen or in my early twenties, I often heard from my parents about all the things I have which I take for granted that were not even on anybodies radar screen when they were younger.  The young rock stars of Web 2.o are doing some cool stuff which was not even imaginable 20 years ago or longer.  The reality is Moore’s Law is being challenged and new technologies are advancing more quickly.  Innovation is the key driver, along with an insatiable desire more content and control.

It is no longer about either push or pull marketing, but rather about collaboration, transparency and user generated content.  If you are not giving your customer what they want, someone else is waiting in the wings to steal them away.  Customer Loyalty is defined by stickiness.  Stickiness is defined by a transparent customer experience which makes customers want to engage with your product or service and telling their friends.  With great companies like BazaarVoice, customer reviews are becoming an ante for being seated at the big kids table.  Today we see a proliferation of social searches on Twitter and Facebook where people are asking close personal friends, Facebook friends and Twitter followers for advice and information.  Just yesterday, Robert Scoble said he was in the market for a new mini van for his wife and asked people on Twitter to tweet their opinions on a few different mini vans.  This is the future of social search.  Consumers will give you and others their opinions about your brand, good or bad, whether you want it or not.  The key is what you do with it.  Ignoring customers is a sure bet to share erosion in the future.  It is essential you embrace the two way connectedness being created on the web.  Whether you think you are a participant or not, you are, both personally and professionally.  I love the way Best Buys CMO uses both his blog and Twitter to engage with customers.  He has people tweeting him about stuff they like, as well as things they are not happy about.  He is transparent in his replies and ignores no one.  This is also done very effectively by the CEO of Zappos.  In web 3.0, this will be the rule rather than the exception so you better get some people assigned to following these guys and figuring out your own strategy.

In the early days of the web, Web 1.0, there were many retailers who wondered what they should do.  When should I get in, what should I be doing, how much should I spend.  Many companies figured out that Wall Street was rewarding those with a web presence, thus they began to shift spend and attention away from brick and mortar to web commerce.  Companies were splitting off their web divisions as different companies and the dotcom era of Foosball, pool, beer and pizza was created.  It was the cool place to be.  The dotcom crash occurred and things began to come back to normal, but it was a new normal.  Multi-channel retailing was part of the new normal and companies needed to figure out how the various channels, be it dual or tri, could and should best co-exist.   There is not a best practices guide, per se, however what has evolved is the need for companies to be channel agnostic, always on and provide a seamless, consistent experience for your customers.  Not many are getting this right yet, but they are moving in that direction.  The other thing that evolved with web 1.0 is the pure plays like Amazon who have been able to not only break rules, but create new rules where non previously existed.  Amazon is all about putting the customer first and using rich customer data to improve the customer experience.  Another winner in this arena has been Zappos.  These are two companies that have achieved annual sales in excess of $1 billion+ through a retail channel that did not even exist 20 years ago and they got there faster than any other traditional retailer.  What sets them apart, and makes them both a model to follow, is their commitment to customers, innovation, transparency and collaboration.  Their business models are different, to be sure, but the drive, passion and commitment to be category leaders and innovators is unmatched.

Web 2.o was in large part started by the likes of Facebook, Digg and other social media business models which have made participation and user generated content mainstream.  People have been freaking out of late about the newly launched site design of Facebook, but the jury is still out.  For the most part, I am a fan.  It is taking a bit of time to adjust to the increased noise from the various feeds, but that will settle itself in time.  Facebook did the right thing, however, in the next step of innovating and shaping its business model which will become a powerful commerce engine and source of rich social content, reviews, opinions and so much more.  Nobody understood what blogging was all about, outside of Silicon Valley, just a few short years ago.  Now we have powerhouse blogs like TechCrunch and Mashable to name a few, as well as the newest entrant to the party, Twitter in the form of micro-blogging.  Twitter is being embraced by celebrities, news anchors, professional bloggers and now every day people.  It was just announced today that SalesForce.com is partnering with Twitter to incorporate relevant tweet streams into their enterprise client solutions in an effort to monitor customer views, opinions and feedback.  This will be very powerful and a key point of differentiation for companies that rightfully embrace the notion of listening and engaging with their customers.  I read recently, in my tweet feeds, that people are starting to think in terms of 140 character thoughts and phrases.  This is a good thing, as it forces us to get to the point crisply and succinctly.  Isn’t that what it is all about.  We have a few precious seconds to get the attention of our audience.  How do you say something impactful in 140 characters, many have or are figuring it out.  To me, Web 2.0, is about the conversation.  It is about transparency.  It is about giving people control of what and how they receive content.  It is about user generated, user throttled and user filtered content.  We decide WHO we want, WHAT we want, Where we want it, When we want it and How we want it.   This is brilliant.  We see great new web companies by web experts being created to give us just that.  A few examples are Alltop.com by Guy Kawasaki and SocialMedian.com by Jason Goldberg.  Both have been successful with previous web ventures and are sure to be on the forefront of creating even more new brilliant business models and ideas in the future.  In web 1.0, it was about being channel agnostic.  In web 2.o, it is about being device agnostic.  Mobile commerce and communication will be ubiquitous in web 3.0.  You will need to figure out how to be there for your impatient customers when and where they want you or someone else will.

Web 3.0 is going to be about bringing it all back together again; introducing two key elements which are just now being dabbled with in Web 2.0 – measurement and monetization.  The who, what, where, when and how need to be understood and analyzed, ultimately resulting in insights which create a path to monetization, whether it be products, services or ad revenue. But, as in web 2.0, unlike  web 1.0, the customer must be at the center of the decision-making process.  Chat groups, Twitter, Facebook and other have made it unavoidable to be part of the conversation, engaging, transparent and on your game 24/7.

In another 20 years when my kids are my age and potentially pondering these same types of issues with an entirely different innovators dilemma’s, it will be fun to sit back and say to them, well you know when I was …

I hope you enjoyed my post from 30,000 feet, I welcome your comments.