Two years ago, after a lifetime of research and consulting in the retail industry, I decided to focus exclusively on writing, reading, researching, and speaking about how consumer technology use is changing the way people shop and how this, in turn, is changing retailing. I was present when the barcode was introduced, the last technology that transformed the business, and remain fascinated by the transformative potential of the digital age.
It’s been a messy, fascinating time. Shoppers are clearly in the driver’s seat, eagerly mixing new media with the old. Promoters are often overly enthusiastic about the newest thing. Retailers are trying to make sense of it all so they can give shoppers what they want. Here’s some of what I’ve learned.
It’s still about what shoppers want. For all the breathless hype, I’ve been struck by the fact that new tools don’t change the fundamental truth of retailing: To learn what shoppers want, you still need to look at things from their point-of-view and listen closely.
I spoke to a longtime JCPenney’s customer recently, and her story drove the point home again. She’s ordered online from JCP for years, but one of the features of the shopping experience she’s always enjoyed has been browsing their seasonal and special catalogs “to see what they have and to get ideas for decorating.” Then JCP stopped sending catalogs. The monthly mailings, as attractive as they are, didn’t deliver the same experience, and there was nothing distinctive about browsing online.
To top it all off, the company hasn’t made it clear how the new pricing program works with the website, so she can’t tell if she’s getting the best price there. The upshot? She now visits several other sites, such as Overstock.com, and splits the business she used to do with Penney’s.
This story is not about technology. It could have had a different ending if the retailer had focused on the experience this shopper was seeking — and if they clearly explained the benefit that their new system would have for her.
Getting on the same page. Here’s another theme that’s risen to the top in this turbulent time: Now that there are so many communications channels, aligning information across them has become increasingly important. Bad things happen when what’s on the website isn’t in the store, or when the same item is priced or configured differently. Not knowing whether she was getting the same price as the store shopper is one of the things that drove the online JCP shopper to other retailers. As a colleague of mine heard a Target shopper say to a sales associate recently, “You mean you don’t even carry the same cookware set at the store? So much for using the website.”
In the early ecommerce days, many retailers made the mistake of setting up online stores as separate entities that were unrelated to physical stores. Now those who are farthest along on the journey, among them Nordstrom’s and Macy’s, are investing a great deal of money, time, and effort to integrate online and in-store inventories. These days, if an online item is out of stock at the distribution center but in stock at a Macy’s store location, the store location will ship it to you.
While the technical challenges of aligning information across channels are specific to each platform, it was probably a mistake for us to get caught up in the alphabet soup of ecommerce, s-commerce, m-commerce, etc. From the consumers’ point-of-view, it’s all just shopping, no matter which technology they’re using.
A wide range of shoppers to accommodate. Retailers must accommodate a wide range of shoppers these days. Some shop all digital all the time, a few shop totally traditionally, and most mix the old and new in varying proportions. Shoppers can be quite specific about what they find useful, and quite inventive when it comes to satisfying their needs.
One shopper I interviewed earlier this year turns to the internet whenever she needs to know something. “It’s the first thing I do when I have a question, even ahead of asking a friend,” she says. For her, using the internet to shop is second nature and comes from an ingrained behavior that simply extends to shopping.
When I talked with her, she was looking for furniture for her family’s new house. The internet was faster than store shopping, she said, and made it easy to share ideas with her husband. But she also said, “The way sites are set up makes a big difference. Some are much better and allow me to deal with all the things that influence a decision to buy a particular set of furniture, such as room size, maximum orminimum possible length, color, etc.” Others were frustratingly incomplete. Couldn’t the retailer see what kind of information a person who was furniture shopping needed?
Shoppers are also inventing work-arounds to get what they want when the digital tools available don’t quite fit their needs. A working mom who recently had her first child told me that she started ordering groceries online when she first came home from the hospital. This became too costly eventually, but her time was even more precious now, and the consequences of forgetting something were more severe — so she started using the tool to plan her trips to the store. She’d select everything she wanted to buy using the online ordering program, but instead of placing the order, she’d print it out for a detailed shopping list. She got what she wanted: faster shopping, and less forgetting.
I like these examples because one of the most exciting things I see out there is a growing number of customers with both the motivation and the technical capability to help marketers co-develop products and new ways of delivering value. It’s happening now.
Starbucks’ “My Idea” program is an example of engaging customers in a meaningful dialogue about the store’s offerings. Walmart’s sampling program — sign up online for an assortment of “goodies” that will be delivered to your door — is a way of creating discovery and engaging customers in co-developing the store’s assortment. Retailers who are willing to participate authentically in this kind of dialogue with their customers stand to gain much.
Separating Facts From Hype
These are challenging times for retailers, and they are in a legitimately tough spot in trying to make sense of it all. As a 2012 Economist Intelligence Unit report pointed out, many companies’ first response has been to react to the fast-changing phenomena rather than integrate their responses into an overall marketing strategy. Further complicating the picture, many of the “facts” being generated don’t have a reliable base, nor are they presented in ways that allow comparative analysis.
The Economist report, based on a worldwide survey of almost 800 senior executives across a range of industries, found that:
• There’s a mismatch between communications channels that customers are using and those that companies are emphasizing.
• Companies’ strong response to the social media channel has limited development of more balanced approaches.
• Customers now expect interactions to be more
of a dialogue.
People who are already enthusiastic about a particular channel are generating much of the information about today’s new digital media platforms. Take the question: “Do you use mobile apps while shopping?” Answers are available from lots of sources and, for the most part, they show that phone apps are already influencing shopping.
The problem with these isolated “facts” is that they are, well, isolated. Only smartphone owners are surveyed, for instance, and the results don’t mention that feature phones are still far more prevalent in the population. What ages were the respondents? Income levels? Were they representative of the population at large? What type of shopping were the apps used for? What value did it deliver them? There’s a lot to be learned before “going to war” using any new communications platform.
The good news is that more complete answers are beginning to emerge. For example, an RIS/Cognizant survey of about 2,100 US and Canadian shoppers is in its third year of looking at which information channels people are using to make purchase decisions. They’ve found striking differences depending on whether customers are shopping for specialty items or for consumables. It turns out that internet searches and store websites are a significant part of shopping for specialty items, but when it comes to consumables, traditional media are preferred: printed materials, shelf signs, product displays and packaging information.
Brick Meets Click’s survey of 20,000 shoppers who were digitally connected to their food retailer produced similar results on the consumables front. Traditional newspaper circulars were rated helpful by three-quarters of those surveyed, well ahead of online circulars and email promotions — even among younger shoppers.
We also found younger shoppers much more inclined to use digital media, as did the RIS/Cognizant survey, but they still haven’t abandoned traditional media. For the foreseeable future, a mix of old and new will be required to reach a broad market.
Where Do We Go Now?
We’ve been dealing with ecommerce for almost a decade now, and as the near-hysteria around social media and mobile apps begins to subside, some solid principles are beginning to emerge for operating in the new landscape.
• Ensure that content across communications channels is aligned and consistent.
• Change doesn’t just happen. Shoppers need instruction on how the change benefits them and how they can get full value from new digital media.
• Continue to use data and technology to customize and personalize the shopping experience to make it easier and more rewarding.
• Integrate all the digital communications platforms your customers use into an overall communications strategy that reaches a broad enough market with minimum duplication.
While you’re building these principles into your own strategy, never forget that it all starts with listening to the shopper.