ILLUSTRATION BY RUTH MACAPAGAL
Last week, I wrote about some of the secrets and insights that I shared with the audience that attended my opening keynote at the largest retail conference in the region. I took great pleasure in addressing an audience of the country‘s largest retailers and some of the most famous Filipino entrepreneurs, including Mr. William Belo and Mrs. Tessie Sy-Coson.
In this column, I will share some of the trends that are affecting not only the retail industry but that are also highly relevant to many other industries. Some of them will have a fundamental effect on the growth and profitability of your business. Ignore them at your peril!
The new trends
In the new postpandemic economic order, consumers have adopted a new perspective on work-life balance. People work more from home, stay home more and got used to this during the pandemic. On the other side, a lot of costs have gone up because of the Russia-Ukrainian conflict, which also causes people to stay home more and spend less.
On top of it, the pandemic has accelerated digital markets by one to two decades, according to recent estimates, because people had no other choice but to go online. This means that whatever business you’re in, you must not only understand but master the online world.
If the top people who are responsible for your online presence have never heard of things such as the Stanford Web Credibility Project, you better get some real experts on board to support you. Otherwise, you will be in for a wild ride and a lot of surprises!
Everybody talks about ‘online’ but few know how to master it
Even some of the biggest and best in the world can get wiped out overnight if they do not master the online world and stay on top of the newest changes. The owner of a large Asian retail conglomerate approached us during the COVID-19 pandemic because their online sales were a lot slower compared with their competitors. When my team and I did a detailed analysis of their online customer journey, we were shocked to find out how flawed their online presence was.
The whole journey was riddled with bugs that made it impossible to even complete some of the purchases. In addition, images of products were lacking on some of their websites, and the list went on and on. Of course, nothing about the customer journey was seamless or intuitive. And this retail company was a major player in the offline retail world with enough financial resources at its disposal.
Click & mortar— the ‘phygital’ world
It became clear to us that none of this company’s executives had ever put themselves in the shoes of their customers to experience their pain. Another challenge was that their teams were simply not up to date. The digital space evolves so rapidly and changes are so dramatic and so fast that you need to get the best experts in the world or make sure that your people are trained by the best to be able to beat your competition.
Retail as well as many other industries now have huge opportunities to create unique experiences for the customers that resemble a perfect mix between online and physical. The new world is “click and mortar.” It’s the ‘phygital,’ the perfect marriage between physical and digital.
For most companies, these remain fancy catchwords, but they have no clue how to implement them practically.
Not only retail but also many other industries face the challenge of how to differentiate themselves from their competitors. If there is no differentiation, you’re out! The loyalty of consumers and customers is at an all-time low, and it is not going to increase anytime soon. That means: they are going to leave you—without remorse or a second of hesitation—unless you make it sticky; unless you offer them something beyond the product or the services that you are selling.
The secret: create unique experiences
It’s no longer about products or services; it’s about the experiences you provide to your clients. Did you know that the minority of customers list price as one of their top three considerations when buying a product or service? Yet most businesses treat price as if it was the other way around.
To effectively differentiate yourself from your competition, and to be in a world of your own, you have to create unique experiences for your clients and customers. Most businesses should no longer be selling products or services but holistic lifestyle experiences. These need to be emotional, connected, seamless and intuitive for your customers.
Think Steve Jobs, the Apple stores and the overall Apple and iPhone experience. It’s a great example of what intuitive and connected, seamless and emotional customer experiences look like. It’s a perfect example of what it means to obsess about your customers and to provide the kind of experience that increases their loyalty and makes them come back, again and again, hungry for more.
The power of a rockstar brand
That is why I call Apple a “rockstar brand.” People buy Apple products beyond reason or price considerations. Most Apple customers have an emotional attachment to Apple products that makes price considerations secondary.
That is the reason why people will camp overnight in front of the Apple store in New York City before a new iPhone comes out. In the hours before the store opens and releases the new product, a long line of eager customers will form. In one instance, a woman even wanted to trade her place at the end of the line with someone in front —for $950! If you think that is completely illogical and unreasonable, you are right: it is! But it just goes to show the power of a rockstar brand that builds a loyal following of customers who base their buying decisions on emotional factors beyond reason or price. Why? Customers have formed an emotional attachment to the brand because of the experiences Apple provides to them. It is that simple—but hard to do in practice if you do not know how.
When you walk into an Apple store, this experience naturally continues and a seamless, intuitive and connected experience awaits you. It is the perfect marriage between online and physical, click and mortar.
Getaway
Abercombie & Fitch is now trying to do the same with their getaway-themed store concept they just launched in Los Angeles and Milan. The verdict is still out on that one but it shows that they understood the trend and are adapting to it. If you are from another industry that is not into retail, do not make the mistake of thinking that this does not apply to you. It does. The industries that are exempt from “experience trumps product” are few and far between.
3 Next steps
Analyze the impact of the new work-life balance that consumers have adopted, their tendency to stay home more, rising prices etc. on your business and your industry.
Put yourself in the shoes of your customers to experience their pain. As a business leader, CEO or owner, get out of your ivory tower and experience each step of your customers’ journey. Take detailed notes on what to improve.
Get the best experts you can to support you and your teams in mastering the phygital world. INQ
Tom Oliver, a “global management guru” (Bloomberg), is the chair of The Tom Oliver Group, the trusted advisor and counselor to many of the world’s most influential family businesses, medium-sized enterprises, market leaders and global conglomerates. For more information and inquiries: www.TomOliverGroup.com or email
Tom.Oliver@inquirer.com.ph.