Success in the retail industry has always been tough, but the current environment presents us with some new and unique challenges. At a recent YPO event, I gave a presentation on the direction I see the industry taking in the coming years, making the case that the future of retail will be a kind of Main Street redux and digital hybrid—a space where customer relationships are actually nourished and supported by digital tools.
In doing that, I was able to distill the five most critical challenges facing contemporary American retailers. Retail may have a lot of issues—ranging from inventory to location to customer service—but my focus was on those unnecessary marketing failures that I see as fully self-inflicted. Each one of the challenges below are problems that arise from a failure to construct a clear and aligned story, strategy, and systems and an inability to embrace the idea of the customer as the hero.
So if you’re in retail, watch out for these five challenges—but know that answers exist in the realm of transformational marketing. Figuring out your why, what, and how, and making the customer the hero, are at the core of how to rise above these challenges.
- Remaining over levered with underutilized assets
When bigger retailers take on too much debt and real estate, they spread themselves thin in more ways than one. Though such assets can be a big plus for a brand that’s growing, leadership will never see the real downside of all this growth until it’s too late. When retailers have assets they’re not using, they should consider offloading them unless they can be effectively utilized to market the brand. But if you just have a lot you need to hold onto, then use those assets to improve customer experience and expand the reach of your brand story.
- Losing the human touch
With the advent of the internet and the hi-tech industry in the 1990s and 2000s, much of the warmth or familiarity was lost in the retail space. What had once been a place where vendor-customer relationships were reaffirmed with every purchase was now entirely or mostly online. Although we have more retailers returning to brick and mortar now, that coldness and distance remains. Offloading staff and customer service training in favor of efficiency and convenience has led to a fairly vapid retail experience which, in my view, will only be revitalized by the creative and effective use of the right digital platforms.
- Marketing inauthentically and interrupting consumers
In the pre-internet past, advertising on billboards and magazines was often uniform, persuasive, and transactional. Although some of it was effective, all of it was more or less interruptive and inauthentic. Today, those same bad marketing ideas have been, unfortunately, wholesale transferred online where they were turned into pop up ads. Though digital tech offers a lot possibilities in terms of how to craft and promote great story, good branding is all too often set aside in favor of taking the easy way: just put up a bunch of ads and call it a day. But whatever turns you off personally—and when’s the last time you really enjoyed one of your own pop up ads?—will turn off customers, too.
- Getting tuned out by turned off customers
As a result of interruptive marketing like pop ups, customers often tune out. It gets harder for even a well-made branding story to rise above the clutter and noise. The general attitude out there about marketing is that it’s an aggravating imposition on people’s time—but who can blame them when they’re inundated with ads all day? If you annoy and interrupt your customers, you will end up blocked and then that’s it for you—you’ve lost that audience completely. You only have yourself to blame. Be smarter, do better—make the customer the hero of your brand.
- Stoking fears about data privacy and security
Companies looking to exploit user data can go too far, as we’ve seen with the recent Facebook scandals. Broadly speaking, however, it’s annoying and interruptive (not to mention pointless) when an algorithm decides to start sending you email ads for mattresses the day after you purchased a mattress. When consumer advocacy groups voice concerns about privacy and security, they’re not making up stories. Watching helplessly as companies you’ve never heard of reach into your personal data and get a read on your wants and desires—it’s creepy. So, don’t be creepy! Be more sensible with that data and avoid stoking the genuine and entirely fair fears of ordinary consumers. Using consumer data in smart, subtle, and effective ways is possible—I show clients how to do it every day.
I’ll be presenting on digital transformation at the 2019 Global Digital Summit, to be held in Seattle Washington on May 8-11th . Consider attending if you’d like to learn more about story, strategy, and systems. Do subscribe to our blog for future insights on transformational marketing, or order my new book, Marketing, Interrupted.