Retail Executive

NOV/DEC 2017

Retail Executive is the trusted advisor to top retail executives from the industry’s most profitable retailers. We help retail executives succeed in their job role and grow their business via exclusive, actionable, peer-driven content.

Issue link:

Contents of this Issue


Page 28 of 47

I developed a similar acronym for what I believe best- in-class retail now entails. Successful retail, in particular, is always customer-led. The BOSS model of New Retail (no clue as to who the Boss should be!) encapsulates the four key principles. "B" refers to "bonding" or connection and is distin- guished from the old model of purely "branding." A bond, by definition, is "a close relationship that occurs when experiences are shared." In the past, retailers and brands were linked by transactions. Today and in the future, successful retailers will bond with customers in meaningful relationships. The bond becomes stronger when the retailer is authentic and transparent. The bond grows when the retailer uses shareable content to scale the customer community. For example, think about how customers respond to Dollar Shave Club (acquired last year by Unilever for $1B), versus how they might feel about a typical incumbent brand such as Gillette. "O" refers to orators. All brands need customers, but in the digital age, they need orators as well. The orator is a "public speaker" who is "very eloquent." The orator is an influencer or key opinion leader (KOL) who tells the story of the brand to their own fans. It is very import- ant that all brands and retailers generate "shareable stories" so that they can help the KOLs spread positive word-of-mouth. In the digital economy, it is the respon- sibility of brands and retailers to develop narratives that are ongoing and inherently shareable. The first "S" stands for "showrooms" rather than stores. A "showroom" is a physical space that emphasizes the customer experience. Customers learn about the prod- ucts and the story of the brand; retailers and employees learn about the customers. A showroom is "experience-fo- cused" rather than "fulfillment-focused." It is a venue for building a relationship between brands and their custom- ers. As noted earlier, in my own research, I have shown that customers who experience brands offline in show- rooms also spend more online on those brands. The second "S" stands for "science" rather than service. "Science" implies that customers' needs are anticipated rather than requested. A customer's digital footprint is a source of information that can be used to drive her to stores and to improve her in-store experiences. As a customer walks through a city and her offline environment, relevant information can be "surfaced" to her on her mobile device. For example, as she walks down Fifth Avenue in New York or Hauihai Lu in Shanghai, she receives a message: "the Prada handbag you searched for online last Thursday is 120 meters away and available at a 20% discount." In the New Retail, the store is not dispensable or op- tional; it's central and irreplaceable. R es, and anticipates customers' needs. The DNVBs are leading the way, and the lesson is broadly applicable to all classes of retail, including established legacy re- tail. To see this, consider the difference between a Tesla showroom and the dealer lots of old with hundreds of cars (and arguably mediocre selling experiences and issues with fulfillment). ONLINE-OFFLINE RECIPROCITY Online and offline integration are occurring in two im- portant ways. First, as I noted previously, DNVBs are extremely innovative in offline, successfully adding showrooms, movable pop-ups, and fully operational retail stores to their existing e-commerce operations. If you want a great retail experience, visit the Away show- room in London, the Bonobos Guide Shop in Chicago, or the Warby Parker flagship store in Soho in New York. Second, the U.S. retail giants, Amazon and Walmart, are getting serious about offline and online. The point of origin is immaterial; the destination is online + of- fline. Amazon is opening stores and just acquired Whole Foods for $13.4B. Walmart, the world's lead- ing retailer with gross sales of $483B, is grabbing on- line-first brands and trying to acquire "digital DNA." On the day the Amazon acquisition of Whole Foods was announced ( June 16th this year), Walmart acquired Bonobos for $310m. This online + offline trend is by no means confined to the U.S., either. According to McKinsey, more than two-thirds of Chinese consumers are likely to use "buy online pick up in store" and one-third of consumers already have. More than half of all Chinese consumers intend to experience technology and virtual reality in store. In a move that parallels Amazon's, Alibaba, the world's leading e-commerce platform, has acquired several offline stores and is expanding its own Hema supermarkets to operate in 15 locations. Hema stores focus on customer learning and great experiences. BOSS — BRINGING IT ALL TOGETHER As a result of my experience as a retail researcher in a university setting, as an investor in the numerous U.S.-based DNVBs, and through recent visits to China, In the digital economy, it is the re- sponsibility of brands and retailers to develop narratives that are ongoing and inherently shareable. RETAILEXECUTIVE.COM NOVEMBER/DECEMBER 2017 27

Articles in this issue

Links on this page

Archives of this issue

view archives of Retail Executive - NOV/DEC 2017