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AUSTIN, Texas — Physical retail is not dead, but boring physical retail is a sure route to the graveyard.
That was the message conveyed by Steve Dennis, founder of SageBerry Consulting and the keynote speaker at the recent Progressive Business Media NEXT Conference in Austin, Texas.
After a quick rundown of the woes faced by the furniture industry and retailing in general — including the unprecedented number of store closings in 2018; the struggles of iconic retailers like Neiman Marcus, J.C. Penney, Macy’s and Sears; the record number of retail bankruptcies (“We will see a couple more this year,” Dennis predicted); and the stepped-up pace of consolidation — Dennis assured the crowd that although physical retail is in transition and definitely in need of attention, all is not lost.
“Just because you’re in physical retail doesn’t mean you’re in trouble,” he said. But boring physical retail is dead, he added.
Most retailers face two options: Compete on price, which requires one to “out-Amazon Amazon” and is a fast race to the bottom, according to Dennis, or provide experiential retail. “For most, the choice is to find ways to be fundamentally remarkable.”
Dennis, who prior to founding SageBerry was the chief strategy officer and head of multichannel marketing for the Neiman Marcus Group, offered a path forward with what he called “the eight essentials of remarkable retail.”
The first tenant is to be digitally informed but not obsessed. Up to 60% of physical store sales are influenced by a digital interaction, Dennis said, yet having a digital-first mindset can be a trap. Digital is not always better, nor does it always come first in the customer buying process.
Retail interaction should also be human-centered, which may seem obvious, but Dennis suggested that in some cases the customer-centric model has degenerated into mere customer service contact numbers and satisfaction surveys. Seventy-five percent of consumers want more human interaction, not less, Dennis said, citing a recent TWC study. He recommended rooting out customer pain points and coming up with solutions for them.
Essential retail also must be harmonized, which is a replacement for the word omnichannel. All aspects of the customer experience must “sing” together, he said, and retailers should be less concerned about separating their online and offline channels. “It’s all just commerce,” he said. He noted that “Nordstrom is way ahead of us” because it started breaking down the silos between channels years ago, while Williams-Sonoma never set up silos to start with. “Embrace the blur,” he urged the audience.
Although the channels may have blurred, mobile is becoming retail’s new front door, Dennis said, because the first bits of information a consumer gleans about a brand typically come via a smartphone. He also noted Google’s recent effort to map out consumer “moments” online: the I-want-to-know-moment (research), the I-want-to-go-moment (where is the store? What are its hours?), the I-want-to-do moment (DIY projects, a recipe search, the need for assembly directions) and the I-want-to-buy moment, which represents the actual purchase. “You must show up in all the moments that matter,” said Dennis.
Retail must also be personal. No customer wants to be average, and no customer has to be, Dennis said. Some marketers are very slow to move from mass marketing to personalized marketing, at a time when consumers are saying, “show me that you know me.”
In addition, retail must be connected and collaborative, Dennis said, and memorable. Retailers must be unique and relevant, and amplify the “wow” factor, he said. By example, he mentioned Boxpark in England, which is a mix of popup store, food and classes, and B8ta, which offers a platform for brands to simply show off their wares, demonstrating that some stores act as media: They don’t actually sell anything, but rather show off the latest, coolest products.
Finally, retailers must be radical. They must test and learn, Dennis said. “You need to have a culture of experimentation.”
