The Customer is our North Star

It’s the consumer, stupid!

You’d be forgiven for believing that retail in 2017 is all about technology. There is a lot of talk of the ever growing importance of eCommerce, big data, location based marketing etcetera, etcetera. There’s no doubt that eCommerce is now incredibly important and is continuing to grow at a very impressive rate across the globe, especially when viewed against the backdrop of stagnating or falling traditional high street retailing. In 2016 eCommerce accounted for 10% of global retailing. However it did grow at an impressive 20% plus in 2016 and this is against stagnating or declining traditional high street retailing. Global retail is a $21 trillion business so at 10% eCommerce is hardly small beer. Moreover the forecast is to have eCommerce take an impressive $4 trillion slice of global retail by 2020.

But all of the tech talk and impressive online sales growth is to miss the really really important point surrounding retail.  The technology is only an enabler and can never be the end in itself. For example let’s put technology in perspective. 100 years ago cutting edge tech was the Model T, RCA and wireless trading rooms connecting Wall Street to the great Atlantic liners of the time. So tech moves on. And so it is for all the breath taking innovations surrounding the transaction and discovery stage of a customers journey. However the fundamentals of retail remain as they’ve always been and that’s to satisfy the consumer. The technology is incredibly important but only when it benefits the customer.

Whereas 2000 years ago, when hungry we’d head out and do a bit of gathering or if you were up to it maybe a bit of hunting. 100 years ago, we’d head out to the local grocer, butcher or baker. 50 years ago we’d head to the local super market. Now we would in all probability pick up a device.
More often than not that device is most likely to be in our pockets. But here’s the rub, the start and end of the journey is pretty much unchanged from 50 or 100 years ago. Not sure? Well then check out this interesting bit of research presented in a handy quick view info-graphic from the nice people at Business 2 Consumer (B2C) http://tinyurl.com/mxfrjmm
 
Like my last post it again underlines the fact that the physical is still very very important. So although the customer journey is now likely to take a circuitous route and involves a much more educated and informed individual the journey still starts with a need and finishes with a physical product. Just as surprisingly the consumer’s preference is to find the solution as close to home as possible, again just like 100 years ago. Back then it was because of transport considerations, in other words it was convenient. Well in 2017 it is still much more convenient to have the service or product fulfilled locally. It’s only when your customer cannot find the solution with you, or worse when it comes to those pesky screens cannot find you at all, that they move quickly on.
So how do you position yourself for retail success in 2017 with so much change and innovation? Our suggestion is you go back to basics and concentrate on the consumer and their journey. At COVA we have a very simple philosophy and that is the “Consumer is our North Star”. When we develop an approach or feature we simply ask does this benefit the customer? If the answer is yes then we go all in. If it’s no it gets binned. After all in our business if it doesn’t benefit the customer then it’s just a vanity, a piece of fluff and not worthy of our time and effort.
We think this is a simple criteria and one worth embedding in our culture. Because once we bought into this approach the road map became very clear. What does the customer want and how do we get it to them? When we answer those two simple questions with the customer at the centre, decisions become easier and more obvious.
The consumer habits have changed but the underlying motivation remains largely unchanged over the decades. As I outlined in my previous post the physical retailer still has many advantages over the pure play eCommerce retailers. But that shouldn’t mean you ignore the benefits having a digital presence can bring. The consumer now expects it from you. If you don’t offer it they’re off to a competitor who does. Let’s put it this way, you opened your shop due to the belief you’d get footfall in the chosen location. Well now you need to understand your customer is mobile in every way. It’s no longer just footfall it’s now about where your customers eye balls fall. The irony is that having that eCommerce presence is actually a driver of footfall. Grab the consumers screen time and reap the rewards not just online but in store too.
So if you keep your customer at the heart of what you do you’ll move to providing the solutions they demand in 2017. The consumer journey starts and finishes as it always did but the bit in between takes a little thought. It’s not difficult and the effort could see you grab your fair share of the projected $27 trillion retail sector in 2020. Hopefully there’s a little food for thought here. If there is and you’d like to discuss further give me a shout at mark@covaworld.com
(Interesting that the hunter gatherer parlance still manages to influence our modern language as the homo sapiens skills have gone from hunting for food to hunting for bargains).
At https://covaworld.com we do an out of the box solution for retail aimed at the Suppliers and Retailers allowing for close co-operation benefiting all involved. You can be up and running in 5 minutes and punching way above your weight in the most cost effective way.
              http://www.business2community.com/infographics/local-seo-statistics-must-know-infographics-01557523
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Retail is now technology.

Retail is all about change. Formats get reimagined, in-store merchandising changes daily, departments get increased or decreased in accordance with demand or seasonality. Our marketing campaigns move and adapt with the times. If you’re in retail in you’re in the business of change. It’s dynamic, always has been.

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Retail has been to the forefront of technological change too. The very first commercial installation of an elevator by Otis was in a five storey New York department store. Escalators followed soon after and became common place in the US in the early part of the 20th century. The first cash register was patented in 1883. Its development influenced the recording and management of data that had wider implications beyond retail. Retail gave us the price gun, the bar code, modern consumer marketing and even the widespread use of the computer. British tea chain J. Lyons & Co saw the potential for computers in retail as far back as 1947. So technology and change are part and parcel of retail, so what’s the difference with the new world of retail?

Well the difference this time around is the fact that the retailers are no longer driving the change and as a result no longer in control. The change is now being driven by the consumer. And yes that can be a little bit scary.

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Now the big guys are working hard to catch up. Getting their messaging and branding right, across all the channels. Ensuring their on line identity mirrors their in store experiencing as closely as possible. The pure on line guys with their dynamic exponential growth don’t have these issues, or not yet at least. The poor relation it seems in the modern retail age is the independent retail sector. After all as a sector it has yet to really get to grips with the new multichannel environment. The larger chains have departments to look after ecommerce. They have the resources to manage digital marketing, social media, click and collect etc. etc. The Amazons, ASOS’ etc. only live on line and don’t need to worry about the high street physical space. The independent could easily be forgiven for raising the white flag.

 

But before that happens we’d like to put forward an alternative view. Our view is the physical space has a very big future. The small independent retailer has a very big future. You might not think so if you’re to believe the press and current group think on eCommerce. Almost to underline what we’ve been saying for some time now I’ve attached a link  ( http://internetretailing.net/2014/04/most-uk-shoppers-still-prefer-stores-to-ecommerce-study/ ) to the latest research from YouGov concerning UK consumer insights. In brief it suggests that consumers still enjoy the act of shopping in a store. It also underlines another of our beliefs that given the opportunity a shopper likes to touch and see product. It’s no longer an either or question when it comes to Brick & Mortar or online retail. As far as the consumer is concerned it’s all just retail now. The consumer is now on Facebook, Pinterest, Tumble, Twitter etc. and they’re using it for browsing and shopping. Your customer is much more likely to believe a person they’ve never met over you when it comes to reading product reviews.

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Your consumer is now browsing, researching and shopping on their phones and tablets. Are you digitally invisible or will they find you where they are looking? As a retailer you need a digital strategy. Your customers are living in a digital world so it makes sense for you to inhabit that same world. Sound scary? Well it really isn’t. When you strip out the big words and tech speak it really comes back to basic retail. The rules don’t change that much, it still comes down to service, convenience and product. This brings me back to our main point which is the physical retailer will trump the online only retailer every time. If you back up the shop with the eCommerce site your consumer can choose to do business with you in many more convenient and varied ways than they can with Amazon or ASOS. We are shameless in our support for independent retail and their suppliers. We favour the diversity, personality and passion of the independent over the larger chains or online only guys. The future is unwritten, it will involve change, but rest assured if you embrace it the future is brighter than you might currently think. Embrace the technology and use it to win, after all isn’t that what retail has done in the past ?

It’s not where you start it’s where you finish.

I thought I’d start this weeks blog with a few stats from the UK, Australia and Ireland. The reason being there’s a similar trend across the three countries and given their maturity when compared to emerging markets the mind boggles at the opportunities still out there. So here goes.

Did you know that there are 5 million private sector businesses in the UK. Of these 5 million 99.9% are classed as SME’s. Of these, Small businesses (0 to 49 employees) account for 47% of employment and 34% of private sector turnover. Now the important stats, over 33.3% of these businesses have no web site, only 41% have a social media account and possibly most importantly only 33% have a website with the functionality for customers to purchase products or services online.

The Australian experience is similar. Australian Bureau of Statistics show that only 43% of businesses have a website but more importantly when looking at small businesses it seems the figure is also around 33%. 

Guess what in Ireland it’s not that different with 32% of SME’s not having a website. Less than 23% sell electronically and only half of them purchasing online.

Three similar stories across three different markets of differing sizes and degrees of maturity. But all three territories continue to experience eCommerce growth. This is happening while high street revenues continue to struggle. So the question then must be if the small business sector, and the area we are interested in the Independent Retail Sector, has failed to take advantage of the new technology and resulting revenue streams then who’s getting the benefits? The answer is the likes of ASOS and Amazon and the multi-channel retailers such as Next and Debenhams etc. It is no coincidence that the growth of the large multi-channel retailers such as Argos and the giant online operators such as Amazon etc has happened at the expense high street.

But surely the glass is half full as opposed to half empty. With the low level of adoption of eCommerce by the small business sector then surely there is as yet untapped growth potential. The forecast for eCommerce is continued growth so if you have not yet gotten to grips with eCommerce the good news is it’s not to late. Bite the bullet and dive in as you know we believe there’s strength in numbers. And 99.9% is a pretty big number (I think). At the risk of sounding like a broken record, (for those of a younger persuasion try broken cassette or broken CD or damaged iPod or interrupted download. Should cover everyone), it’s time for independent retailers to shout about how great they are. But in 2013 that means shouting via your shop floor, shop window, local press, social media and as more of your customers are shopping from their sofas at 7pm on a Sunday evening most importantly your eCommerce enabled website. 

Remember it’s not where you start but where you finish so get online and get in the race.

Next week I’ll be looking at the changing consumer habits and the opportunities that exist for the high street. 

Until next week, thanks for reading.

Did you know that there are 5 million private sector businesses in the UK. Of these 5 million 99.9% are classed as SME’s. Of these, Small businesses (0 to 49 employees) account for 47% of employment and 34% of private sector turnover. Now the important stats, over 33.3% of these businesses have no web site, only 41% have a social media account and possibly most importantly only 33% have a website with the functionality for customers to purchase products or services online.

The Australian experience is similar. Australian Bureau of Statistics show that only 43% of businesses have a website but more importantly when looking at small businesses it seems the figure is also around 33%. 

Guess what in Ireland it’s not that different with 32% of SME’s not having a website. Less than 23% sell electronically and only half of them purchasing online.

Three similar stories across three different markets of differing sizes and degrees of maturity. But all three territories continue to experience eCommerce growth. This is happening while high street revenues continue to struggle. So the question then must be if the small business sector, and the area we are interested in the Independent Retail Sector, has failed to take advantage of the new technology and resulting revenue streams then who’s getting the benefits? The answer is the likes of ASOS and Amazon and the multi-channel retailers such as Next and Debenhams etc. It is no coincidence that the growth of the large multi-channel retailers such as Argos and the giant online operators such as Amazon etc has happened at the expense high street.

But surely the glass is half full as opposed to half empty. With the low level of adoption of eCommerce by the small business sector then surely there is as yet untapped growth potential. The forecast for eCommerce is continued growth so if you have not yet gotten to grips with eCommerce the good news is it’s not to late. Bite the bullet and dive in as you know we believe there’s strength in numbers. And 99.9% is a pretty big number (I think). At the risk of sounding like a broken record, (for those of a younger persuasion try broken cassette or broken CD or damaged iPod or interrupted download. Should cover everyone), it’s time for independent retailers to shout about how great they are. But in 2013 that means shouting via your shop floor, shop window, local press, social media and as more of your customers are shopping from their sofas at 7pm on a Sunday evening most importantly your eCommerce enabled website. 

Remember it’s not where you start but where you finish so get online and get in the race.

Next week I’ll be looking at the changing consumer habits and the opportunities that exist for the high street. 

Until next week, thanks for reading.

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