The Future Of Retail: Behavioural Change In The Novel Economy
Forget everything you thought you knew about your customer. They’ve changed, the world’s changed – and your business needs to change. Salesforce Live for Retail and Consumer Goods keynote speaker Brian Solis shares his insights into the future of retail and the opportunity to build human-centred organisations.
We have been – and will continue to be – deeply and permanently affected by COVID-19. Not just by the disease, but by everything that’s gone on around it – the impact it’s had on people, on health, on our habits, on employment and on the economy.
A colleague of mine told me a few weeks ago about his mother, who had lived through the Second World War and been left with an inability to throw away anything that might be mended. Each of us will take our own things from this experience and carry them with us – our own somatic markers, the little emotional bookmarks that provoke a bodily response from us.
What we’re witnessing and are part of is wide-scale behavioural change that businesses need to understand and adapt to.
We’re in a new economy: the novel economy. I’m calling it that because, like the virus that caused it, this economic transition is unlike any we’ve seen before, and we have no vaccine or defence mechanism to halt it. Even those digitally mature businesses that were able to stabilise and operationalise quickly need to see their customers differently now. In crisis there is opportunity; retailers and consumer goods companies need to understand those changed customers, and quickly.
The path to behavioural change
Consider the extent and length of time people’s lives have been restricted. Sixty days, ninety days, over one hundred days for some. And, when we do go out of the house it’s cautious. It’s surreal. We venture outside in a very different way to before. We carry hand sanitiser, a mask, maybe gloves. We’re forced to see the world in a whole new way.
Where we used to be able to chart digital adoption on a bell curve starting with the early adopters, that curve is now heavily weighted to the front. The vast majority of us are now digital-first out of both necessity and, now, habit. As well as using our devices for everyday consumer tasks and for work, we’ve been using our devices to shop for essentials, compulsively check data and news, and to escape.
Now consider this: It takes an average of 66 days to make behaviours automatic.
We’ve all been living in this new way for months. Our behaviours have been changed significantly and, in all likelihood, permanently. And, we’re not yet done evolving.
Perhaps most importantly, our values have also changed. We’ll see behavioural changes develop further over the coming years because people are emotionally affected, so are likely to become increasingly conscious of what they buy and which businesses they deal with. This means our relationships with brands, goods, and services are being re-evaluated and also setting the stage for new relationships to be struck.
Particularly, people will be drawn to those businesses that can convey an understanding of how trauma has reshaped all of us.
This is a great reset for businesses – during the transition period we’re currently in, organisations need to reflect on how to put humanity back at the centre of their business.
Capturing the opportunity
During this period of reflection, there has to be a strong focus on what I’m calling ‘Generation Novel’. We used to talk about ‘Generation C’ – for connected – which spanned age ranges and included anyone with a smartphone in their hand. Now though, gen N – so many more people are doing so much more on their smartphones and digital in general.
Generation N is made up of accelerated, much more sophisticated connected digital consumers and, following closely behind, everyone else who’s been forced into digitisation over the past few months, and enjoyed the convenience and mobility it offers.
Generation N is now made up of both hyper-connected consumers and mainstream consumers, and they all share somatic markers. Of course, it’s not everyone, but it’s the greatest driver of change because they’re the most sophisticated and informed set of customers.
The relationship between humanity and digital needs to be stronger in ways most organisations haven’t really thought of before. And it starts by understanding exactly who the customer is.
What’s the physical experience they actually want now, and what’s the digital experience to make it even more special? And how do those two work together? It’s imperative to focus on what matters to them, and not just ‘let’s accelerate digital’ or ‘how do I get this product in their hands, faster, better and cheaper?’.
Maybe your customers want products that you don’t have, carry or make yet. Maybe this is an opportunity to rethink your distribution, your branding, your website, your advertising, marketing and communications. Maybe it’s an opportunity to rethink packaging.
Take time to fully understand the customer journey, as well as the opportunities for innovation and for agile operationalisation. Explore the opportunities to reinvent yourself for a different type of customer.
Real-time data is so vital in this process – the bad news is that all of the data you had on 1 March became irrelevant on 2 March. The good news is that customers are willing to share their data with brands they trust, and this will form the basis of every aspect of your business’s post-COVID playbook.
Brands have gotten into trouble because the executives who are making decisions are not the brand’s customers. They’re trying to make decisions based on years of experience, and years of process and management infrastructure – the customer doesn’t care about that.
It took a pandemic to make businesses more human, and to accelerate the digital change businesses have been meandering around to keep up with their customers. If you’re not paying attention to and understanding all stakeholders – including customers, community, suppliers and more – there’s no way you can be relevant.
Taking advantage of the opportunity
Those retail and consumer goods brands that had an existing high degree of digital maturity are already experimenting. They’re rethinking their physical stores and designing for the consumer needs coming out of this – not the behaviours consumers had going into it.
Of course, it’s not going to be easy. In Salesforce’s State of Marketing research, conducted at the beginning of the COVID-19 outbreak, marketers identified their top challenges as engaging customers in real-time, innovating, creating cohesive customer journeys across channels and devices, unifying customer data sources, and sharing a unified view of customer data across business units.
These are all challenges only heightened in an era of disruption.
There are, however, some great examples already of businesses innovating and adapting to this ever-changing environment.
Super Retail Group, for example, had contactless click and collect up and running for Rebel Sport within 10 days – contributing to online sales being up by 176% for April/May. Rebel was able to quickly respond to customer needs because it was already so focused on the voice of the customer and customers’ needs.
Those needs could not have been met without high prioritisation – including an exec team that saw opportunity in crisis and, alongside ensuring 12,000 employees were cared for, launched previously unheard-of daily check-ins to help sense and respond to change in a fast-paced environment.
That ability to see opportunity requires real-time data insights, an environment in which action is admired, and a business in which activity isn’t only assessed for short-term financial outcome. Super Retail Group looked at spend of course, but ensured it didn’t kill off key investments that would pay off as the business emerged from COVID. What’s next? An omni perspective of customer data and marketing, not just omnichannel sales and delivery. As we look ahead to the coming months, we know the need for agility is going to be a constant. More so, we know the prioritisation of humanity is only going to deepen relationships in a ‘with-’ and ‘post-COVID’ era.
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