Yes, retail can be saved
Retail, You Have a Problem. I’m worried about you, retail.
One of the first jobs I ever had was at Best Buy. I was just 16 years old and a much quieter individual at the time. Having to educate customers about new technologies really taught me how to have meaningful and empathetic conversations with people. It’s a valuable lesson I’ve never forgotten as my career has shifted toward tech startups and that human connection is one of the reasons why I love retail so much.
You used to be the ones in charge, but now a $350 billion bully is taking your lunch money.
Traditional big box retailers have watched their revenues decline slowly over the past 10 years—holidays are bringing less and less foot traffic, cost per good sold is increasing, and margins are wasting away.
Now, you’re facing a do-or-die moment. It’s sad to say, but you have to change. Don’t worry, though. Change can be difficult, but it also brings an opportunity—the chance to monumentally alter the way people purchase goods (for the better).
Every retailer has two options. Are you going to be the company with the Circuit City five-year plan? Or are you going to be the retailer that embraces digital and thrives in a 20+ year future?
Amazon—The Ever-Growing Giant
Let’s talk about the 800-pound gorilla that is Amazon. Ever since the introduction of Amazon Prime in 2005, the looming giant has been chipping away at retail market share and converting it to e-Commerce. It’s been more than a decade of dominance that can’t be denied.
Hindsight is 20/20, but what if retail started taking action against Amazon early on? You certainly would have if you had lost 50% of your market share in just one year (instead of 10). But for more than 10 years, Amazon has slowly beaten retail at its own game.
Amazon offers the same products at the same (or better) prices as big box retailers—all with better accessibility and free two-day shipping. Consumers are like lightning. They’ll always find the path of least resistance and Amazon has provided just that.
You could try to go head-to-head against Amazon with the same game you’ve always played—the one Amazon has stolen from your hands. To some extent, this is what Best Buy is doing with its “New Blue” strategy for digital transformation. However, incremental differences are exactly what will keep Amazon in control.
Instead, you have to focus on creating monumental differentiation. This means playing a new game that capitalizes on Amazon’s weakness.
The Problem with Reviews and the Chink in Amazon’s Armor
We all know that when the options are fast, good, and cheap, you can only choose two. And while Amazon may seem like the exception to so many rules, this one reveals a weakness that you can exploit to change the retail game.
One thing missing from Amazon’s business is a support staff that can advise customers on informed purchase decisions. No one is going to spend $2,000 on a new television without doing some research. However, Amazon can’t possibly staff product experts for every item it sells. Instead, Amazon has relied solely on customer reviews.
If you’ve ever sifted through thousands of Amazon reviews for a product you’re interested in, you’ve probably noticed that the system is far from perfect. First of all, it’s becoming increasingly difficult to ignore the growing volume of fake (or paid) product reviews.
More importantly, there’s a fundamental flaw in consumer product reviews—they’re based on someone else’s specific needs, not yours. One person’s five-star review might be a one-star review for you. Everyone thinks they want a 75-inch television and the one you choose on Amazon might have five stars—but who’s going to tell you that a television that big will be a waste of money if you’re putting it in an eight-foot by eight-foot room?
In the wake of less-than-trustworthy Amazon reviews, we’ve seen the rise of the professional reviewer. Someone like Marques Brownlee can give you high-quality, professional reviews of popular products. The production quality is great and the information is valuable when you’re researching certain products.
However, there’s still something missing with professional reviewers—a focus on the specific products you’re considering. This leaves us with a service gap between professional reviewers who have limited portfolios and the millions of consumer reviewers who don’t have your needs in mind.
Here’s your opportunity to change the retail game. For years, retail hasn’t valued human connection as much as it should. Your employees can fill the reviewer gap and act as product experts for customers.
Digital Transformation Should Start with the Employee Experience
In most industries, digital transformation starts with a focus on the customer experience. But when Amazon is your competition, you can’t just maintain the status quo. Instead of starting with the customer experience, enabling your employees to have valuable conversations with consumers is the key to executing digital transformation in retail.
Even after I stopped working at Best Buy, I used to go to the brick-and-mortar locations for my tech needs. I realized one day that every time I go into the store, I end up spending a lot of time talking to an employee about anything from home theater systems to computers and beyond.
The people working at Best Buy aren’t just knowledgeable about products (when the company brings manufacturers in to train and educate the staff, this isn’t surprising), they’re enthusiastic about them. At a time when availability of goods is commoditized by Amazon, your core product isn’t what’s on the shelves—it’s the employees you’ve trained to make empathetic connections with customers.
Right now, the conversation in retail is all about how you can increase foot traffic at brick-and-mortar stores as Amazon continues to grow. Instead, you should be asking yourself how you empower employees with the tools and processes necessary to connect with customers—both in-store and online.
Returning Retail to Its Former Glory
When I reflect on my retail roots, I realize that the human connection has always been the foundation of my passion for the industry. How can big box retailers like Best Buy, Babies”R”Us, and others take advantage of technology to get back to that former glory?
Saving retail is all about making mobile and customer connectivity part of employee DNA. You already have the infrastructure in place to match Amazon’s distribution (you have more storefronts and product experts out there than Amazon could ever match in the next five years). Now, you need to start facilitating meaningful conversations between your product experts and the consumers who are always researching potential purchases.
I believe messaging technology is the best way to maximize the potential of human connections in retail. Mobile chat has become the universal experience, giving retail employees a chance to have simple, rich, and dynamic conversations with customers.
The combination of chatbots for simple question/answer situations and human interaction for more complicated inquiries can help you design a high-quality customer experience. When product experts can guide consumers through the buying process and make sure their specific needs are met, you’ll start to build trust with customers—the one thing that will help you thrive in a retail world overtaken by Amazon.
So here we are at a fork in the road, retail. You can remain romantic about your past successes and go the way of Circuit City, Kmart, and others. Or you can play a new retail game and return to glory.
We’re trending back toward commerce done at the distance of a handshake and it’s time to get on board.