By Brandon Berry, Director of Retail & Corporate Training
By now you’ve gotten the memo – retail stores are closing, and at an alarming rate. As of mid-June, 2017, more than 5,300 store closings had been announced, making 2017 the second-worst year on record, and it’s poised to oust 2008 from its “worst year ever” title by the close of H2.
The rise in online shopping is certainly contributing to these brick-and-mortar closings. It’s not just that customers prefer to shop digitally, it is that they now expect more from any shopping experience, online or off.
When it comes to customer expectations, Amazon has raised the bar – a phenomena dubbed “The Amazon Effect.” Customers demand immediate answers to their questions and seamless, personalized shopping experiences—to say nothing of fast and affordable shipping, simple returns, and exceptional customer service every step of the way.
Realistically, few brands have a chance of challenging Amazon’s dominance, but that doesn’t mean there aren’t retail dollars on the table for other organizations. To have a fighting chance, retailers need to invest in these three things:
Retail is a competitive space, so teaming up with another player may seem counterintuitive. However, smart partnerships can help brands stay relevant, drive sales, and meet customer demand. Amazon is acquiring its strategic partners – Wholefoods, Zappos, Audible, and so on. Walmart invested in Jet.com. Target bought Grand Junction, a transportation technology company, to expand its delivery capabilities. But not all growth comes from takeovers. Brands can expand by working together.
For example, Google and Walmart recently announced a deal in which Google will offer Walmart products to Google Express shoppers. From a product and branding perspective, remember back in the day when JCrew first rolled out its collaboration with New Balance? That was genius! Now retailers like Target and H&M regularly partner with designers to create limited edition lines that drum up publicity, urgency, and sales. Teaming up with another brand can create a buzz and bring in a new audience for both parties. We’ll certainly continue to see acquisitions, but brands should welcome smart partnerships, too.
Brands that create personalized shopping experiences by using data and digital technologies increase their revenues by as much as six to 10 percent, according to research from Boston Consulting Group.
The value of personalization holds true in e-commerce and in-store. Online, it means that companies need a strategy for collecting and using data on people’s shopping behaviors and preferences so they can deliver more relevant content and easier shopping experiences. Consumers are becoming increasingly comfortable sharing personal information if it is in exchange for thing like deals and better service.
Customers will pay more for quality service and a unique, memorable, or just plain pleasant shopping experience. Think of how Abercrombie & Fitch became the must-wear brand for teenagers. It made its stores the place to shop, to be seen, and even to work. Retailers need to create incredible experiences that draw people through the door—and away from their computers. They also need to understand the way people use their mobile devices for shopping and research, even while they are in-store, and devise strategies for using mobile marketing to drive foot traffic and in-store purchases.
Success in retail is about more than technology—it is about people. That is why giants like Amazon invest so much in creating and executing talent management and acquisition strategies.
For luxury and fashion firms in particular, securing the right talent—particularly individuals with digital skillsets–is paramount, and cumbersome. Brands struggle to find qualified people for key roles and to train and groom successors for key leadership positions.
Whether you are trying to make the move from brick-and-mortar to e-commerce, improve your e-commerce platform, or create an unforgettable store experience, you need talent. Clearly define what your retail business needs – not just in terms of skillsets, but also in terms of the personality that works best for your company culture.
Retailers should also do more to develop and train their existing employees. The companies that are thriving in today’s market – the Apples, Trader Joes, and Container Stores of the world — prioritize employee development programs. They invest in their people, because when your employees are happy, your customers feel it.
Amazon is not going anywhere. Savvy retailers are learning all they can from the e-commerce leader’s success and investing in the people and the processes they need to compete effectively.