The digital age is here to stay and it’s making our world
more hybrid than ever. The line between
digital and physical are being blurred by technology. After almost a couple of
decades, you’d think that online would have relegated to the store to a
secondary experience. That’s not the
case, not by a long shot.
Online AND Offline
Granted, since its inception, eCommerce sales growth has
been heady and will continue to be. However, the same technology that permits
such success is transforming bricks and mortars inside out. To understand this,
you need look no further than Burberry stores, whose retail model is becoming a
gold standard for fashion retailers. To illustrate: clothing in the store is
embedded with chips which can be read by screens and mirrors using
radio-frequency identification technology. When a customer walks into a
changing room holding a jacket, one of the mirrors might respond by turning
into a screen showing images of how it was worn on the catwalk, or details of
how it was made. This truly brings customer experience to the next level.
Thus, technology is enabling cross-fertilization between
online and offline which is unprecedented. The two ‘worlds’ are in a continuous
mutual exchange.
Admittedly, there are things that cannot be blended or are
more peculiar to one channel rather the other. Take the Nespresso boutique.
They have intelligently re-created the entire experience of sipping coffee, letting
you smell the aroma and listen to the
grinding, while basking on the couch. This is simply not possible online.
Conversely, what was once a prerogative of the physical store may now be
replicated online. For example, one of the hallmarks of the bricks and mortar is
the ‘social proof’. If people flock in your store, if people queue up in long
lines, well expectedly conversion rates go up! This simple concept is naturally
flowing into the online environment. One great example is Bookdepository. These guys have
designed a simple way to show on a world map who is shopping in real-time. Flags keep
popping up on the map to indicate real transactions. The online shopper is
emotionally pulled in a trusted ecosystem.
Omnichannel
This brings us at once to a related concept that has gained relevancy
in the retail space, namely ‘Omnichannel’, arguably the retail-buzzword in 2013. I must confess, I have been tinkering with it
for awhile and also said intelligent things about it J (See here
my response to an interesting blog post). But I have met few interesting people
recently who have helped me to see further. In a private correspondence with
Paul Greenberg, head of the National Online Retailers Association (NORA), for
instance, he pointed out that all the researches indicate that customers don’t
think by channel. In fact, ingrained in any retail business model there must be
a simple idea: the customer will ultimately decide where the transaction will
happen, not the retailer. Omnichannel reveals a mindset that is still focussed
on retailers’ internal structure and the way to sell to consumers. Understandably,
this is important. But what makes really Burberry great is how they engage
customers throughout their shopping journey. This is what creates attachment to
a brand.
Omnichannel? Forget it – It will be gone soon. What really
matters is how to build fantastic shopping experience throughout all the touch
points your business is expanding in. This is a large topic and will require
more space and time to be addressed. For now, remember these four guidelines
that any serious retail business model has to blend in. First, learn what it
means customer centricity from Amazon. Second, break down silos. No longer is
marketing about campaigns and technology about keeping the lights on. They must
converge to spring innovation (see here).
Third, think like a start-up. Agile methodology, cloud, big data, product
information, open APIs…this is your arsenal. Finally, your brand is a service.
You are in business not to sell stuff. You must fill customers’ needs (see
Nike, for example). You are creating an always-on ecosystem not just a series
of campaigns based around a calendar of product launches.
These are just few strokes. As illustrated, the ‘new retail’
implies an afresh view on traditional business models and an accurate
understanding of the potentialities of the digital era.
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