There is a select group of retailers that meet their customers’ expectations. They are retailers that carry the products customers expect, at the prices they expect, and have staff in the store who service them like they expect.
Then there are the few remarkable retailers who do something quite different. They over deliver customers’ needs in unexpected ways, exceeding all expectations. At every turn, they do the unexpected, offer products customers didn’t know they needed, and provide customer service that surprises and delights. When retailers are remarkable, price doesn’t enter the picture because that elusive quality called value is more important.
The gulf between the two – unremarkable and remarkable retailers – is vast and the world is filled with way too many of the former and too few of the latter. What’s more, the price retailers pay by being unremarkable in the post-Covid marketplace is high; the growing numbers of once remarkable and now clearly unremarkable retailers are filling bankruptcy courts proves the point.
You Know It When You See It
When distinguishing between unremarkable and remarkable retail, it usually comes down to “I know it when I see it,” famously said by Supreme Court Justice Potter Stewart when he tried to articulate the difference between constitutionally protected pornography and obscenity.
That same intuitive filter is how the shopper, not to mention retail professionals, recognize remarkable retail. The many intersecting components that transform mundane retail into a truly remarkable experience can be quantified. The key is to look at remarkable retail as a series of data points that become an evidence-based playbook for change.
The companies that did not deal with all the disruptive trends of the past 10-to-20 years are even more vulnerable to be wiped out or severely impacted in this time. Retailers need to be fundamentally more agile and build that culture of experimentation. The fear coming out of this pandemic is it may make companies more risk-averse.
Steve Dennis, author of Remarkable Retail: How to Win and Keep Customers in the Age of Digital Disruption (LifeTree Media, 2020) is a remarkable man in his own right, uniquely qualified to deconstruct the essential elements of what makes retail work.
A Harvard MBA, Dennis held senior executive positions at Neiman Marcus and Sears, when they were still major players, not the shells they are today. He then went on to found Sageberry Consulting,
Dennis’ rallying cry is: “Physical retail isn’t dead. Boring retail is.” He explains, “Despite clickbait headlines warning of a ‘retail apocalypse,’ many brick-and-mortar stores are posting strong growth and profits, while digitally-native brands are now rapidly opening brick-and-mortar locations in droves. But an epic revolution is occurring and what worked before no longer does.”
His call to action to stop being boring and start being remarkable is imperative today. So far, over 30 retailers have filed for bankruptcy this year, resulting in massive store closings. And it’s not only bankrupt retailers closing stores, Coresight Research expects between 20,000 to 25,000 major retailers to close stores this year, more than doubling the record 9.821 closures last year.
Looking further out, UBS reports more than triple the number of retailers will close their doors over the next five years than shut during the last recession. That’s upwards of 100,000 retail stores shuttered, and the number of U.S. retail stores will decline from 883,000 last year to 782,000 by 2025.
“Going back over the last 20 years, the worst year for closures was 2009 when 2 percent of all retail stores closed,” UBS analyst Jay Sole told the Wall Street Journal. “Our forecast calls for 2 percent of stores to close every year into 2025.”
Eight Easy Pieces
Boring , irrelevant retailers have no time to lose. In fact, it may be beyond the point of no return for many. To slow down time and dodge a fatal bullet, here are eight essential qualities that will move a retailer from boring to remarkable:
- Digitally enabled: This goes without saying, especially during the Covid shutdowns. Dennis argues that digital isn’t always first and not always better, but it augments and assists customers to interact with retailers in ways that are essential in the future. “Technology is an enabler, a tool, a means to an end. But no customer buys technology. They buy solutions, and they buy into a story,” Dennis explains.
- Human-centered: Human-centered retail puts the soul back into the relationship between the retailer and customer. It’s an evolved description of “consumer-centric,” which has become just a catch phrase for too many retailers, not a model to live by. Human-centered retail will take on even more meaning post-Covid as the coronavirus experience has forced us to reflect on our humanity.
- Harmonized: Dennis also pushes back against “consumer-centric” and rejects the “omnichannel” mantra with its emphasis on “omni” as being everywhere for everyone. He argues, “What matters is showing up for the right customers, at the right time, where it really matters, in remarkable ways.”
- Mobile: Increasingly, one place everyone expects retailers to be is on mobile where people are living more and more of their lives. Dennis challenges the idea of offering mobile as simply another channel. “The nearly pervasive use of smart devices gives whole new meaning to location, from the customer and the retailers perspectives,” he shares.
- Personal: Remarkable retailers overcome the dichotomy of consumers being driven by two seemingly conflicting desires: wanting to be distinctive and the desire to belong. “No customer wants to be average,” Dennis contends, but boring, unremarkable retailers tend to see them that way. One-on-one, personalized customer experiences, enabled through technology, gives retailers the ability to personalize marketing, products, and experiences. “Marketing technology’s ability to deliver on the ‘one-on-one’ future has progressed to the point where not only is it possible, it is rapidly becoming imperative,” he writes.
- Connected: Connectedness hinges on the recognition that we are all interconnected. Barriers to connecting have been reduced, even eliminated in a fluid digital culture. Dennis proposes a concept of a “fourth place,” that riffs on the idea of the “third place” that Starbucks coined. He explains the first place (home), second place (work) and third place (community-gathering place store) are all seamlessly connected into a digitally connected network (fourth place), which is where more relationships are made and fostered between people and brands
- Memorable: Being memorable can be a double-edged sword. A retailer can be memorable in a bad way, as we have all experienced. When the retailer is memorable in a good way, that’s a remarkable achievement. At its most basic, consumers buy the story before they buy they product, and the story is what creates the memory.
- Radical: Remarkable retail is achieved by radical retail leaders who are not afraid to take risks, try new things, and develop a corporate culture of experimentation. This is why The Robin Report established an annual Retail Radical Award. Dennis observes, “Being unwilling or unable to change your risk tolerance turns out to be the riskiest strategy,” he maintains. “If you look at the state of play in retail today, the spoils are going to the true innovators, the disruptors, the radicals.”
Changing Retail Radically Requires a Radically New Approach
I asked Dennis how he views retail currently during the pandemic. He says, “The fact is the companies that did not deal with all the disruptive trends of the past 10-to-20 years are even more vulnerable to be wiped out or severely impacted in this time. Retailers need to be fundamentally more agile and to build that culture of experimentation. What I fear coming out of this pandemic is it may make companies more risk adverse,” he says. “So my hope is that, number one, people realize it’s more important than ever to have a remarkable value proposition and number two, that the riskiest thing you can do it not to take any risks.”