Retail Tech Innovation or Consumer Change: Which Came First?

retail tech innovation or shopper behavior

THE EXPANSION of omnichannel retailing presents our industry with a chicken-and-egg problem: Does consumer behavior drive changes in retail tech innovation or does retail tech drive changes in consumer behavior?

This is much more than a philosophical musing. It’s a question that matters greatly to retailers. Retailing becomes more intricate over time at a pace that exceeds growth in consumption.

This means the next incremental dollar you add to your top line will be a little bit harder to obtain than the last one. Omnichannel requires retailers to maintain, optimize and adjust to keep pace with shopper expectations and behaviors. Those expectations change fast. They are elevated by shopper experiences and shaped by forces outside the retailer’s control.

I call this the Law of Equivalent Experience: The best service standard experienced anywhere is instantly expected everywhere.

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Flying or Dying: Whose View of Stores Rings True for The Future?

Shoptalk: Flyin or Dyin

FOR THE 3,100 retail, tech and finance movers and shakers who gathered here in Las Vegas at the inaugural Shoptalk conference this week, an existential question still remains unresolved: Are stores poised to soar in the digital stratosphere or are they circling the digital drain?

“Stores are incredibly challenged,” said Ron Johnson, CEO of Enjoy, the online services startup he founded this year following his stunning success with the Apple Stores and his shocking disappointment at JCPenney.

“Over the past 20 years stores have been in a relative decline” he added, referencing the faster growth posted by Amazon.com and other pure-plays and the recent reports of soft quarterly earnings and closings from brick & mortar giants like Kohl’s and Macy’s.

But Jerry Storch, CEO of Canada’s Hudson’s Bay Company, which operates Saks 5th Avenue, Lord & Taylor, the Gilt online boutique site, and Germany’s Galeria Kaufof as well as its eponymous stores north of the border, would beg to differ.

“That narrative is all wrong,” he told a packed Shoptalk audience. “90.2% of sales are still in stores. Amazon still only controls 1.5% of U.S. retail sales.”

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A Framework for “Best Practice”

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NOT LONG AGO I WAS ASKED to prepare a “Best Practices” document for a retail solutions company. The task stimulated a round of research, investigation and deep thinking.

Best Practice is a term we invoke fairly often in the retail consumer products industry. Industry associations devote considerable resources to identifying them. Consulting firms convene their best subject matter experts to define and explain them. (Sometimes they invent them outright.) Sales organizations, especially, like to invoke them as evidence of the superiority of their solutions.

But is there consensus on the real meaning of best practice? Well I read up on what some of the experts had to say and added some original thinking of my own. Here’s what I came up with:

Best Practices are the reusable practices of the organization that have been shown to be successful in their respective functions. To make them repeatable and consistent, they are defined by the organization and institutionalized in various ways, often enabled by technology systems. Best Practices may deliver great value in driving customer experience, workflow efficiencies, speed, accuracy, reduced re-work, cost control, operational insights, business improvement and other benefits.

While specific Best Practices may vary across different organizations and industries, some tend to rise consistently to the top. Those worthy of the adjective “best” tend to reflect five key traits: They are Designed, Conscious, Measurable, Realistic, and Customer-Focused.

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Independent Grocers – 3 Ways to Gain a Trade Promotions Edge

NGA, LAS VEGAS – When it comes to capturing their fair share of impact from trade deals, independent grocers have long struggled to match their crosstown, big-chain rivals. Scale is a key challenge. The effort and resources required to identify, negotiate, accept, implement and publish a single promotion are the same, whether the execution is for 12 stores or 1,200.

Big chains may spread these tasks across more hands, but they also suffer from promotion practice logjams and disconnects that may tend to neutralize their advantage, due to versioning complexity, duplication of effort, review and rework.

Make the Effort-to-Benefit Ratio Work for You

The opportunity is open for smaller retailers – who are inherently more consolidated, nimble and fleet of foot – to gain an edge in the promotions game. It comes down to defining and enabling promotion practices that permit streamlining and collaboration across the enterprise. Independents should explore three areas of present opportunity:

  • Streamline and connect your processes. Neutralize the scale advantage by making promotion decisions faster and adopting disciplined executional processes that offset the differential effort. Use automation to reduce and simplify steps and ensure that correct information is in play across functional areas of your business. Harmony is enabled when you successfully align the creative process with the business decisions.
  • Collaborate within your enterprise. Structure your ad process for collaboration and design connectivity throughout the lifecycle of each promotion, from planning, to execution, to measurement. Establish a consistent workflow with roles defined, assigned and tracked.
  • Collaborate with your vendors. Establish a portal-based system that transfers responsibility to vendors to enter complete information about each offered deal and makes it better for them to do so. Online accuracy will make faxes, emails and paper forms a thing of the past. Negotiations and decisions will commence faster while minimizing the need for reviews, changes and reconciliations.

These trade promotion management capabilities are enabled by software solutions but rooted in best practice. They are quite readily available now, and adopting them can be far less disruptive than you might think, especially where web-based technology is available.

The right promotional tools and processes can enable independents to exploit their natural advantages to win with shoppers and capture a fair share of deal profits.

© Copyright 2014 James Tenser
(This article was originally commissioned by Aptaris LLC. Permalink. Republished here by permission. All other rights reserved.)