Results Count ... everything else is conversation.: Future of retail

Beyond multi-channel, future success requires "on-demand interaction"

Image: Naypong; Freedigitalphotos.net

Historically, stores were the primary, and often only places to make a purchase. With the advent of ecommerce, consumers had a choice of purchasing online or in store. Today's mobility consumers are no longer tied to a computer. Smartphones have "unleashed the beast" – consumers now expect to engage anytime, anywhere. More importantly, consumers now expect to engage before, during and after transactions. The future of retail success will not be measured by the site of the sales transaction, but by the level and quality of consumer engagement … one tap at a time on their smart screens.

Mobility changes everything about consumers and their behavior

The history of retail continues to be written. The newest chapter of retail is all about the game changing device called the "smartphone". Mobile access, via smartphones or tablets, enables consumers to interact anytime and everywhere. Consumers not only comparison shop products and prices, they engage in a variety of interactions with retailers, as well as discussions about their experiences via their social networks. The critical dynamic of mobility is that consumers expect to engage with retailers on their schedule, not the retailer's.

Consumers have become addicted to their smartphones. As you can see from the chart, consumers literally use them everywhere, including some very unusual places! The stats above do not necessarily mean that US consumers are shopping in the bedroom and while they are driving. What the chart does indicate is that smartphone users are "always on". Smartphone behavior is NOT about just mobile access to acquire information, or make the final purchase. Smartphones create a mobile, digital lifestyle, which is focused on proactively engaging, not passively consuming.

The changing face of retail – From demand generation to "on demand"

The classic approach of bricks and mortar retailers was consumer "demand generation". Retailers ran mass advertising to generate traffic. The better ones grew more sophisticated and "targeted" key consumer segments with promotional offers. In a sense, there is not that much difference today between online e-tailers and off line stores. Both online and off are both focused on direct marketing, programs and offers to increase conversion rates and close the sales transaction today. While Amazon may have some sophisticated demand generation and closing techniques, they are just as focused on closing transactions as Walmart. Amazon just happens to be "open" more hours than most retailers.

What mobile devices have done is to put the consumer in charge. They no longer have to wait for ads, email or offers. The key today is that the sales transaction is not an event but a continuous consumer journey. Today's consumer expects access to information they want, in formats they want, when they want it. In short, they want access "on demand" 24/7-365. And, their expectations for engagement transcend the sale … they expect "on demand" access to information and service post sale. They don't expect to wait to call a service center during "normal business hours". Today's mobile consumers expect access "real time" via Twitter, Facebook or specific retailer apps designed to provide "on demand" interaction.

"Digital breadcrumbs" – Consumers leave a trail one tap at a time

A case in point for "on demand", mobile interaction is airline travel. In the "old days" you had to wait for a mailer, or go log in on your computer to check ads and promotions. You had to call a number or check-in at the airport to see flight status and confirm seating. I will testify that I'm a very loyal United airlines consumer because of their great smartphone app that instantly provides you all of your flight and account information, plus the ability to complete any new flight booking transaction … all "on demand" on my schedule.

Without realizing it, consumers leave a trail of "digital breadcrumbs" one tap at a time on their smart screens. While shopping, they can check in to see if there is a deal at their favorite mall or store by tapping on their favorite app like Foursquare. At the store entrance, they can tap to check the store app, or use interactive NFC (near field communication) on their phone to link to the store. The consumer can also check social media like Facebook or Pinterest to see what their friends prefer, or if there are any offers they have missed. Every single tap on the screen creates a digital footprint of the consumer's digital path and interactive presence. The question is … are retailers paying attention and responding to on demand interaction?

4 Ways Retailers need to engage consumers beyond the transaction

Yes, retail is still about sales. But, the sales transaction is fleeting and temporary today. And, it's not where the profit lies. To compete on just sales transactions, the retailer will have to sacrifice their soul and bottom line to win on price. Here are the amazing results that count:

[Omni-Channel 2013: The Long Road to Adoption, RSR Research, June 2013]

Said another way, it's not about "reaching" consumers online or off. Retailers must create ways to interact with consumers where they are, on demand, crossing channel boundaries to create a personalized experience that consumers value.

There is a great "trendagram" on Omni-channel shoppers and how retailers must adapt to their new mobile world. The absolute key is understanding that consumers are looking for personalized experience on their terms. According to a RSR Research survey top opportunities for retailers include:

The last two are particularly significant. In order to "sell things", retailers have traditionally focused on training Sales Associates on product knowledge and "closing techniques". Today's mobile engaged consumer is looking for "how to" interface to find what they want. Instead of training employees in product knowledge, retailers need to be focused on empowering both employees and consumers with technology, tools and apps to find what they want … on demand … on their terms … when they want it … how they want it.

3 Second challenge to engage … or lose Omni-channel consumers

The old rule of thumb was that retailers had 10 to 30 seconds to capture attention and engage consumers in store or online. In a recent post, Kulkarni makes the case that today's challenge is engage in 3 seconds or less. Retailers can't afford to be reactionary and guess on demand generation. They must "follow the digital footprints" of consumers, and engage them before they ever get to the cart, and then re-engage post sale.

Today's mobile consumers are ready for the future of retail engagement, on demand, on their terms. They aren't waiting. They are creating it on their smartphones. The question for retailers is not if, but how quickly they will adapt to create personalized engagement that transcends channels … and the sales transaction.

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Sources:

2013 Mobile Consumer Habits Study; Conducted by Harris Interactive, Jumbio 2013
Retail Minded; Engaging Customers Beyond the Transaction, Nicole Reyhle; October 15, 2012
RIS: Retail Info Systems News; The 3-Second Challenge to Omnichannel Engagement, Punit Kulkarni; August, 26, 2013
RIS: Retail Info Systems News; Omnichannel Shoppers: Synchronizing Channels to Transcend Boundaries Between Online and Off; August 15, 2013
Mobile Shopping Image: Naypong; Freedigitalphotos.net