NRF 2014: The 900 pound gorilla
From a sleepy startup losing tens of millions every month, who has emerged as the strongest competition for retailers? Yes, that’s right, Amazon. In the US, last year alone 180 million people bought 3.5 billion items*. That’s the equivalent of every adult in the US buying an item from Amazon every week………every week, for the entire year. Amazon isn’t a company you want to go and hug, it’s a company that does what it says on the tin. And people like that – a lot.
So I was interested to learn at NRF how bricks and mortar retailers (and of course those who have multiple channels) are fighting back to gain their share of the market. Do traditional retailers with a store estate have any advantage over a pure play online retailer such as Amazon? The results are fascinating and there was much discussed and shown at NRF on this very subject. Indeed, store experience was one of the primary session tracks demonstrating the relevance and interest in this. What are shoppers behaviour patterns? Does the baby boomer generation shop – and therefore engage with retailers – in a different way to the new millennials?
Customer centric retailing was a term used at the conference, which seems appropriate, after all, a consumer doesn’t walk into a store thinking “I want a really great omni-channel experience today!” What emerged is that baby boomers do indeed have different expectations to millennials. Whilst baby boomers want to engage in a store, to be able to feel and touch the product, millennials want the convenience and power that comes with shopping online – typically mobile online.
So whilst baby boomers prefer the emotional engagement, millennials simply seek a functional engagement. So where does this leave bricks and mortar retailers? Well, the good news is that the holistic customer experience has never been more important. And in delivering a really great customer in-store experience what is the most critical factor to success? The store assistant. Never before has the store assistant played such a vital role in driving the success of multi-channel retailers. Instant ownership and the touch and feel element of shopping in store remain very strong differentiators over pure play online retailers. The fact that Amazon cannot compete with “I can just get in my car and get it” remains a key factor.
But does this mean that millennials are a lost cause for retailers? No, the instant ownership still appeals to them however the window of opportunity to capture the loyalty of millennials appears to be closing fast. And in order to win that loyalty and avoid it permanently being lost to online, all aspects of the store, from layout to lighting to design to flow to product availability to engagement needs to be compelling. But above all else, the message from the conference was that the store assistant is the key to unlock all of this. The expectations of this vital role have never been higher.
Bottom line: a paradigm shift will see the workforce as a competitive advantage rather than a cost of stacking shelves. This is great news for consumers – always-on brand immersion will drive customer experience to new levels. Roll on NRF 2015!
*Source: WD Research