It’s almost like a broken record. Everywhere I turn, from industry gurus and analysts, to on-screen financial personalities, they repeat the mantra “focus on the customer.” But why is it so important that retailers take that advice? Why now, and what does that mean for your organization and strategy? As I reflect on the many advances in the technology that is powering retail, I am more certain than ever that a retailer’s future relevance lies squarely in the hands of consumers.
Gatekeepers to Your Success
No two ways about it, consumers are in charge and armed with more information than ever before. It doesn’t matter which industry we’re discussing, consumers desire exceptional and personalized experiences in the services they receive, which determines how they choose to spend their time and money. More than 40 years ago, Herbert Simon, Nobel Prize winner in economics, said that “a wealth of information creates a poverty of attention.” Along with that, studies have shown that the average attention span for a person continues to decrease, from 12 seconds in 2000 to only eight seconds in 2013. With our multi-screen lifestyles, I think this average will only continue to drop.
The point here is that you only have a few seconds to make an impression, to capitalize on an opportunity, and to engender the trust of the gatekeeper to your success—the consumer. Consumers are demanding what I call high-touch “digital-grade experiences” at every interaction point with your brand. Consumers are completely changing the order of things, what and how things are valued. They want it personalized and want it now. They want access, yet crave uniqueness; they want transparency and privacy. There’s a lot of contradiction here, but these get resolved once you understand and develop the right insights about your customer.
Competition Is Changing at the Speed of the Consumer
Under Armour is not just selling shirts and shoes, it boasts 200+ million people on its connected fitness platform. Adidas, Nike, and Asics are mass-customizing their running shoes with 3D-printed soles. And Google (Alphabet) and Novartis are developing smart lenses that can read glucose levels in tears. Continuous glucose monitoring will totally transform the quality of life for diabetics while creating new business models that blur the lines between Life Sciences and Technology companies.
These are companies innovating by putting the consumer at the heart of their strategy. They are finding novel ways to blend technology, social trends, and consumer behavior to create new revenue streams and improve people’s lives. Companies today are competing not only on products and services, but also on speed, agility, and relevance in unprecedented ways. Technology is a part of every brand experience, even if it’s deep in the back office—you can’t avoid it or deny that it’s critical to success. And even when it’s hidden away, it must be connected to the front office where you interact with your customers. That’s today’s business reality.
Changing the Conversation in the C-Suite
Let me share a story with you. I recently attended a series of customer meetings that drove home the fact that the conversation is changing in the C-suite, which rings especially true for retail companies. In one particular meeting with a CEO, the tone and urgency were clearly different than previous discussions. This company had been very successful in the past and consistently delivered on their numbers, but the last few quarters he discovered that what had worked well in the past was no longer working. Even worse, the siloed systems and processes optimized for a pre-connected world were keeping the company from making the adjustments they needed to make in mindset and action.
The people at the company were working hard, putting in the long hours—so it’s not for a lack of effort. They were hampered by the siloed data and processes that were designed and optimized for an earlier business environment or, if you will, 20th-century consumers. While oversimplifying a bit, there was a realization that the competitive environment was going fully digital but the company’s operational setup and mindset lagged.
The conversation switched to what concrete steps he and the executive team can take now to embark and gain traction on their digital transformation, placing the customer at the center of the strategy. Having a digital core that can sense and respond in a contextually aware way across the immediate enterprise and even value network, intelligently and in real-time, is an absolute necessity to level the competitive field in the 21st century.
It was a very value- and outcome-based conversation with long-term impact on that company’s future prospect, their people, and their customers. It all starts with a commitment from the top to change the mindset of the company and use technology to tear down the silos and connect the dots to the customer.
Placing Consumers at the Heart of the Business
To say that retailers today are going through a major disruption does not stretch the truth, and in a couple of years, saying so will be a real understatement.
We’re still in the early days of the digital transformation era for retail, and companies would benefit from putting consumers at the heart of the business in order to provide them with the largest value.
Those that are ready to shift their mindset and operationalize what it means to put the customer at the center of what they do will reap great rewards by influencing the gatekeepers of their future success. The future is bright; you just need to have the right perspective.