Previous Baynote blogs have noted the need for retailers to initiate their personalization strategy by first understanding who their customer really is. Looking into the future, this will become even more important to the core of each retailers business. Why? Because there is a fundamental sea of change in retail happening right now, and the last 24 months have seen a massive acceleration of this change.
What is changing is that the old school of retail – the curate, procure, present and transact cycle – is dying. This type of inside out – vendor to buyer – thinking is rapidly being replaced by a culture of outside in thinking. Savvy retail organizations are starting first with the customer and then working backwards. For example, let’s say you sell auto repair parts. A few short years ago, your buyer would identify a need, come into your store, and one of your customer service people would look up the part that they needed in a big reference manual. Then they would disappear into the bowels of your warehouse to find the part and bring it forward to the waiting customer. If you didn’t have the part, the customer would head to the next auto parts store. Think about that same customer today – looking up the parts manual online, checking into the exact SKU, and then searching for availability (either in-store or online) from their mobile phone while they watch Monday Night Football. If your store isn’t prepared to respond to this customer’s need at that moment – you’ve lost their business.
The Customer Experience Changes With or Without You
It’s a brutal transition that has already stressed the operations, IT and merchandising parts of the retail organization. To date, most retailers have only been able to respond partially. Yes they have invested in ecommerce infrastructure; they may have combined inventory systems, produced a mobile app or a mobile enabled site and added more technical ecommerce talent to their IT teams. But there is much more work to be done. These are the last days of “inside out” thinking, and the retail future promises to be challenging.