The Disruptors of Retail Industry

Any conversation on the retail industry quickly turns to the topic of disruption. In fact, the very nature of retail is characterized by a constant state of disruption. Seasonal fashion demands the disruption of last season’s trends. Advances in technology disrupt the status quo and create the next must-have consumer technology product.
The Disruptors of Retail Industry

Companies emerge from garages to disrupt how goods and services are purchased and received.  The word ‘disruption’ typically has a negative connotation, suggesting something to avoid or to fear, but in actuality it is the motion that keeps retail moving forward.

From the oft-stated demise of large shopping malls at the hands of urban lifestyle shopping centres in the US; to the struggles of High Street retailers in the UK who must compete with online sellers; to the worldwide ubiquity of mobile devices which facilitate immediate price comparisons; to the emergence of hybrid retail and restaurant locales in South Africa; retail always has, and always will be driven by disruption. It is disruption that creates interest in all but the most commoditized area.

There is a distinction between something that disrupts and something that distracts. At the birth of some concepts, it is downright impossible to determine whether a new product, service, or technology will disrupt or simply distract.

Remember Facebook Stores? When initially launched, every client and prospect I was working with at the time salivated at the idea of a store inside Facebook where they could easily engage with hundreds of millions of consumers. While retailer adoption was high, the general reaction from consumers was not positive. The learning was that consumers found the stores concept intrusive and unwelcome in the context of Facebook.

Some concepts disrupt our thinking about something as fundamental as brand and brand identity. Prior to the rise of social media, a retailer owned and controlled their brands.  Enter the disruptive power of Twitter and other social media channels. Now, retailers are merely brand participants rather than brand owners.  Communication must be authentic and two-way, instead of controlled and broadcasted one-way.  ‘Word of Mouth’ has evolved to ‘Word of Big Mouth’, through which the impact of a few disruptive advocates or skeptics can change a retail brand’s public perception.

Other potentially disruptive concepts are heralded with tremendous hype and overinflated expectations long before actually proving their value. One does not have to look too far to find pundits shouting their predictions about in-store beacons, wearable computing, big data, the cloud, or 3D printing as the next wave of technologies sure to disrupt the retail landscape. I’ll stop short of making my predictions for the next wave of disruptive technologies and instead shift to one factor that always has, and always will create disruption in retail – relevance.

Relevance is an evolving and nebulous concept that leads consumers to consider a particular retailer for a particular type of purchase.  The characteristics that a retail brand embodies aligned with the way that those characteristics resonate with the consumer determine relevance. Both of these factors are a constant source of disruption.

What makes a retailer relevant to their customers? Is it a unique product set that no one else sells? Is it sales associates so knowledgeable that they provide a distinct, compelling level of attention and service? Is it convenient store locations or online delivery capabilities? Is it pricing power that makes you the cheapest among your peers? Across different retail segments and product categories, it may be a few of these things simultaneously.  The key, of course, is to intentionally and unambiguously declare your ‘Drivers of Relevance’ and staunchly use those to chart your strategic direction.  Complicating this notion of relevance is the sad fact that your customer may not perceive you as you perceive yourself.  We use – actually we overuse – terms like Social Media Strategy, Content Strategy, Mobile Commerce, Content Marketing, Customer Engagement, Customer Experience and a variety of other tired phrases; when we are actually attempting to achieve and maintain fundamental, simple relevance.

The inability, or worse, the unwillingness, to critically examine what makes you relevant is THE most DISRUPTIVE force to any retailer’s future.

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