It's All About Relationships
Gary Hawkins, CEO, Center for Advancing Retail and Technology
My family’s store started as a summer farmstand by my great-grandmother in 1934. I can remember as a kid getting up early on Saturday mornings to go to the regional market with my father, looking to buy fresh fruits and vegetables for sale that day, supplementing what we grew on our farm. My favorite part was swinging by a local bakery to pick up donuts and baked goods to sell. Nothing like a donut still warm from the fryer, just dripping with glaze.
What I also remember is how my grandfather seemed to know everyone. He knew Alice, and that she shopped on Wednesdays and loved fresh, local strawberries still warm from the field. He knew Ben, and that he liked his strip steaks cut extra thick. And even Mrs. Johnson and her dog Buck, a massive great dane, who loved getting a bone as a special treat from our meat department. I remember we shopped for Mrs. Gardner, delivering her groceries on our way home. And this was years before home delivery was a thing!
That was personalized retail. The customer was the most important part of the business.
And that was the constant refrain over the ensuing years. ‘The customer is the most important part of our business’ is the pablum I, and many others in the industry, was raised on.
Except something happened between then and now. Stores became bigger and busier. Product assortment exploded. Competition developed from every quarter. And food became available anywhere and everywhere.
As the industry grew larger we began to lose focus on the customer. How we made money - or at least how we thought we made money - began to shift. Merchandising — deciding what products to put on the shelves and which products to promote —became an exalted position in our organizations.
The increasing focus on products grew hand in hand with a growing focus on obtaining marketing funds from brand manufacturers. One could easily make the case that it was because of marketing funds that products grew to take center stage. Today, many major retailers would not be profitable were it not for those subsidies that support sale prices to the shopper, help offset advertising costs, bolster category margins, and enrich the bottom line.
In a very real sense, brand marketing funds have insidiously shifted retailer focus away from the customer to a dependency on products. Retail became product-driven.
But let’s step back for a moment from retail to examine what’s happening in the world around us.
As we saw earlier, 3D printing and augmented and virtual reality are transforming the world of mass produced goods. This signals a move from the industrial revolution to a world of customized products and services. The birth of the internet and the world wide web set the stage for the digitization of commerce, removing the personalization penalty for marketers who had to pay a high price for marketing differentiation in the physical world. In short, technology has fundamentally changed the world of one (product or service) to many (consumers) to a world of many (customized, personalized products or services) to one (shopper).
Beyond the world wide web, perhaps no technology has fostered consumer expectation of relevancy more than the smartphone. Mobile has brought with it a fast-growing expectation of contextual relevancy, the shopper knowing that merchants have access to technologies providing realtime location in a store or mall. Between the mobile browser and the countless apps available today, each of us has access to the world from the device in our hand, and increasingly that world is tailored to each of us individually.
And that brings us back to retail.
In the midst of this Age of ‘i’, the retail industry remains largely on the sidelines. Weekly ads, printed and distributed with the newspaper, filled with mass promotions, are simply out of sync with what our customers want today. Sure, some industry marketing vehicles have gone digital, but a digital version of the mass ad is spam and syndicated coupons are only relevant if I go searching for them.
But it doesn’t have to be that way.
We as retailers can reclaim our customer heritage. We can use new technologies and capabilities to recreate those personal relationships of yesterday and become truly relevant to each of our individual customers today.
And that’s what Retail in the Age of ‘i’ is all about. It is about fulfilling the destiny of retail by regaining a focus on the customer. It is about building relationships with each and every one of our individual customers. And it is about returning products to their rightful role in service to each of our customers.
About the Author
Gary Hawkins is the founder and CEO of the Center for Advancing Retail & Technology (CART). He can be reached at email@example.com.
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