Retail can’t seem to catch a break. With the “retail apocalypse” and now COVID-19, retail innovation isn’t what it used to be. But, “thinking like a retailer” isn’t going to automagically reveal the anecdote to disruption. To truly innovate takes bold leadership and vision, a belief in the art of the possible, an agile and resilient infrastructure, and an empowered culture to experiment and break new ground.
Thinking like a retailer isn’t going to automagically reveal the anecdote to disruption. To truly innovate takes bold leadership and vision and a belief in the art of the possible.Brian Solis, Global Innovation Evangelist, Salesforce
In a recent article in CIO, Salesforce colleague Kamal Tahir and I challenge retail and CPG executives to reimagine brand, customer experiences and retail operations for a new world order. Where should they start? While most executives are directly responding to COVID-19 disruption, innovators are going all in on evolving consumer needs, preferences, and behaviors to create value and deliver modern, next-level experiences.
If you look back at any retailer that struggled with digital transformation and innovation roadmaps over the years, chances are, their struggles are far more pronounced because of COVID. They might have been late to e-commerce years ago and are still trying to figure out how to compete against Amazon. Their mobile experience might not be native, serving as an extension of the desktop, which limits user functionality and seamless cross-channel journeys. Data is often siloed preventing a 360 view of the customer and also 360 personalization across their journey.
To that end, Salesforce recently announced Digital 360—a solution built on the Customer 360 platform to help digital leaders create personalized connected experiences across marketing and commerce that customers expect.
Loyalty is once again, up for grabs
Recent data from McKinsey found that shelter-in-place orders accelerated ten years e-commerce adoption in just three months. But here’s the part that should terrify retail and CPG brands. From the onset of COVID-19 shutdowns, consumers demonstrated that brand loyalty, at least how it worked before, is over. 75% of consumers revealed that they have tried different stores, websites, or brands during the COVID-19 crisis. And, 60% of these consumers expect to integrate these new brands and stores in their post-pandemic lives.
For most companies who are still treating loyalty as a quid-pro-quo spend for points approach, this will be a bigger hurdle to cross. Loyalty has to be seen as an outcome of personalized engagement. That is where the loyalty battle will be won, not in a race to the bottom rewarding existing behavior.
Innovation now is not just a nice to have, it’s a matter of surviving and thriving.
If you look at retail brands that invested in digital transformation and innovation long before COVID, their bets were placed wisely. Like many innovators, their investments were questioned and doubted at the beginning. But as an example of investing in longer-term ROI, Target just reported its best quarter ever. Their digital transformation was pandemic-ready, driving a 195% increase in digital sales and a 700% increase in BOPIS purchases. The company said it had 10 million new digital guests in the first half of 2020 alone.
Innovate or Die: Give retail innovation after COVID
COVID accelerated adoption and changes in behaviors and new experiential standards. Some might say that the likes of Target were “lucky.” But, digital was inevitable. There was always going to be a disruption event on the horizon. Some were prepared. Others are adapting. But, that’s just it. There’s always going to be a disruptive event on the horizon. Business models now have to account for disruption-proofing AND future-proofing.
Think like the evolving customer. When you compete for the consumer and how they’re evolving, you then humanize and give purpose to digital transformation. You become native, sought after, preferred. Tying this back to McKinsey’s research, you become part of the 75% of new brands that consumers experiment with and a member of the 60% loyalty club where customers keep coming back.
It took a pandemic to finally accelerate retail innovation.
There are many examples of how and where companies are experimenting and succeeding in these times. But if you look closely, what they all share is 1) an immediate and ongoing dedication to understanding customers and delivering value to them as they evolve and 2) a long-term view and commitment to evolving experiences that customers value.
While there isn’t a pandemic playbook or future of retail crystal ball to guarantee success, there are cues from innovators in every industry we can learn from today to inspire our way forward.
The pandemic is both an accelerant of and catalyst for new change. Most, if not all major shifts and advances in market and societal behaviors take place when there is a disruptive event. This is an open door for retailers and brands, even if they weren’t in a winning position before, to challenge the status quo, innovate, and get ahead.
It’s time to experiment with new in-store and digitally native experiences, beyond BOPIS, curbside, and delivery, that blur the line between online and offline. Kamal and I believe that retailers must prioritize the following 5 key areas of innovation to reinvigorate core retail business models:
- Invest in a dedicated track that pursues digital business model innovation (new value and revenue creation).
- Support a parallel track that fosters operational innovation (supply chain, services, staff training and roles).
- Strive for experience innovation (physical and digital).
- Prioritize next-generation #phydi customer engagement and relationship management in existing touchpoints and develop new touchpoints that modernize the customer journey.
- Create a culture of cross-functional, real-time data and insights. Plug-into evolving customer behaviors, preferences, and expectations. Accelerate decision-making and rapid testing and learning.
For the full story, please visit CIO, “The future of retail isn’t what it used to be..”