If you earn your
living in the retail industry the possibility that the business that you’re in
will still exist in two, five and 10 years is very slim, says Doug Stephens, US
retail expert in the first line of his new book The Retail Revival.
“Sorry for the
buzzkill,” he adds. “But it’s true.”
Fizzing with
ideas, this book is the start of a journey. Stephens tackles all of the issues
that you’ve heard about, such as big data and showrooming and puts them into
context.
In a chapter
entitled The Destination is You he discusses how mobile phones open up the
possibility that big brands will find shoppers wherever they go. In the future
as a customer is about to enter your shop, big brands could push promotions
towards them and your competitors, like Tesco Express, could try and poach
their business with a home delivery offer.
Sam Walton’s
reputation as a genius of retail comes under close scrutiny from Stephens. He
argues that demographic changes lay behind the success of Walmart. The US baby
boom that kicked in in the 1960s and lasted for 20 years meant there were lots
of children growing up in households with plenty of money.
“Quality would
take a back seat to availability and abundance would triumph over substance,”
Stephen argues.
“When I began my
career as a retail marketer in the early 1990s pricing just about any product
or service was a cinch as long as you followed one simple formula. The ‘good,
better, best’ pricing convention that most retail marketers had used for the
last 60 years was a surefire model.”
Another
advantage was that shoppers in this period wanted to buy what everyone else was
buying. Big brands could cheaply reach 80 per cent of the population with just
three TV ads and average stuff for average people worked.
But the internet
has changed all that, Stephens argues. The model is broken and using the
Walmart toolkit will not work anymore. Today’s retailers have to choose one of
two models:
- High fidelity
- High convenience.
Reading about
his views of these two places on the map, you can start to understand how a
local shop could do well next door to a Tesco Express if it gets high fidelity
correct. What is high fidelity? There is no one answer to that but it is about
how you present your offer to your world.
A good example
is Apple’s approach to retail. They worried about the detail. The customer
experience “was so precisely engineered that there were even certain things
that employees were not permitted to say while helping customers. For example
the word unfortunately, as in ‘unfortunately we don’t have that item in stock.’
Instead staff were instructed to use the words as it turns out, as in ‘as it
turns out we don’t have that item in stock.’ Which Apple viewed as a less
negative way of communicating the same out-of-stock situation. From there staff
were instructed to offer a solution aimed at making the customer happy despite
the situation.”
Stephens book is
aimed at retail executives and big brand marketers. But local shopkeepers will
find it helps explain the world you live in, helps explain why your suppliers
do certain things and most importantly it will set your mind thinking how to do
a better job for your customers.
Bricks and
mortar retailing is not dead. In fact, Stephens may even be optimistic about
your chances if you read the small print. “The future will be better tomorrow,”
he concludes, quoting from Dan Quayle.
For more, go to www.betterretailing.com.
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