This was Sue Dale’s and my first visit to Shoptalk. We have been to many NRFs, but the vibe at Shoptalk was more personal, real and relevant. The outstanding community of retailers, brands and vendors provided for a great exchange of ideas, conversations and calls to action. It was thrilling to see so many amazing startups and to realize that a few of them will be game-changers in retail.
In this part 1 of a two-part blog, we’ll look at three key takeaways from the event:
It’s about the Customer
Across different sessions and meetings, Customers were the talk of the town. It’s understanding who your customers are, what they expect from the retailers, how they want to shop and their journey to integrate the retailer into their daily life. Nordstrom Principal Executive Officer Erik Nordstrom clarified that Nordstrom’s customer expects it to be a Fashion Specialty Store, a collection of luxury brands, not a departmental store. “Fashion is about discovery of products, things that were not on the list.” CEO Neela Montgomery talked about Crate & Barrel starting an in-home design service to better engage with customers and enhance their shopping experience.
Once the retailer understands the customer and their expectations, it is imperative that the retailers provide ways to enrich the customer experience of their brand, whether it is online or in the store. Formulating the strategies and activities to serve these customers and influence customer perception of a retailer’s brand requires new tools and science – and this is where AI and Machine Learning can be very useful, be it pricing, dynamic pricing or personalization at scale. In my experience working as a data scientist and strategy consultant, these ML tools can provide insights into customer behavior, preferences, expectations and perceptions. These findings should then be coupled with additional qualitative data such as customer surveys, customer sentiments and brand perception. These art and science components together should drive strategy definitions.
Retailers need to remember that it is the customer’s journey into the retail brand, and setting constrictive boundaries around retail channels will only lead to diminished customer experience. Vice President of Omni-Channel Letitia Webster talked about how Tractor Supply Company allocates online sales to the stores nearest to the customer to remove friction between internal teams.
Nurture a Culture of Innovation
With the changing retail landscape and pressures of fast-evolving expectations from the customers, retailers need to continuously innovate at a fast pace. The technological advancements have lowered the entry barriers and now new, nimble players are easily challenging the traditional players and pushing the envelope.
There were a lot of discussions about creating the white space to inspire innovation. The data should be “democratized” and should not be hoarded to be used as a weapon. The functional teams should be focused with clear objectives. The teams should prepare for unintended consequences and be wary of using the wrong metric to measure success. Bonobos CEO Micky Onvural talked about “Failing Fast”. It’s important to be decisive and finding which ideas are effective while also learning quickly from the mistakes. Lands’ End CEO and President Jerome Griffith emphasized the need for empowering the team and having clear and frequent communication of objectives and values with the team. The retailers I have advised benefited from choosing the right talents for the initiative and setting up measurement and governance processes.
Prioritize Innovation and Continuously Measure
For a retailer, there are always more things to do than there are resources, which makes doing the right things critically important. Retailers need to decide what are the key actions that will drive better customer experience and engagement. They should plan to be outstanding at a few prioritized things and accept that they may be mediocre at other things. This tradeoff is necessary. For example, Tractor Supply doesn’t have a mobile app, as this doesn’t add to better engagement and experience for their customers. However, the customers definitely need a real time view on inventory before driving 20 minutes to the store. The leading retailers have a defined process for prioritization of innovation projects and objective scoring methods. This helps to avoid the most shiny object syndrome and moving from one thing to another.
Once the project is initiated identifying the right success metrics are very important. The metrics should be objective and simple. There metrics should be measured periodically and determined if the results are actual or directional. Managers should be decisive if the metrics suggests success, adjustments or abandonment of the project.
Keeping focus is important. Customers should be front and center. Prioritizing and measuring activities to help with customer experience and engagement can elevate the retailer.