Digital transformation in retail should be at the core of every strategy, regardless of whether a retailers’ primary storefronts are online or physical buildings.
Andy Burton, CEO, Tryzens explains that too often the question retailers are asking is if the future is in-store or online. The reality is, the future is digitally enabled, both in-store and online. Unless a retailer’s business model is only to serve an immediate, local community of people, then digital engagement is critical for retailers to survive and thrive both online and offline. Adopting a multi-channel methodology is less about a choice and more about prioritisation of how to get there.
The age-old recipe for success in retail has not really changed in that what is sold has to be relevant, it must be seen to be fair value, convenient to purchase to ensure the customer comes back. What has changed are the ways you can achieve this, the scale of the potential market’s you can reach and the impact of consumerisation of technology on customer preferences of how to shop. It is an exciting time in retail, an industry at the forefront of innovation.
However, when it comes to deciphering which innovations to implement, there is no hard and fast rule – it all depends on what the retailer is selling, their brand reputation and how they operate today. H&M has the benefit of a vast store network to start with, and engaging these stores as fulfilment, as well as customer experience centres, is wholly logical and appropriate to join up its online and instore presence.
Equally, an absence of stores does not mean another retailer should rush to open stores. Many operate direct-to-consumer online with great delivery and returns capabilities, as well as a few flagship stores in key markets to showcase their brand experience and range. Whereas other retailers may have wholesale arrangements with department stores that enable their products to be experienced locally.
The key is in making sure that the channels retailers engage with their customers through enable a consistent and positive experience. This experience also needs to reinforce and showcase the products in a way that meets consumer expectations. If that supports opening stores, then great, but it has to make economic sense too and there are other ways to create local presence without signing up to a lease.
Retailers that are in a luxury position where they already have scale should utilise the digital revolution and should follow in H&M’s footsteps to join the online and instore experience. Organisations that already have a large store footprint need to evaluate how they are going to utilise that footprint. Today, digital engagement is the key to building lasting customer relationships. Knowing your customer well is the best way to understand how best to engage with them so that retailers are able to design and evolve the most enjoyable user experience for them over time.
Retail today is a battle for hearts and minds of the target consumer, building great experiences that engender loyalty. Whether that involves visiting the store or not depends entirely on the brand, the proposition and the seamlessness of the digital and in-store experience.