Three Opportunities Every Retailer Needs to Consider

These are topsy-turvy days in the world of retailing. Longtime brands like the Gap, and the malls they call home, are facing punishing times. Notable ecommerce brands, like Bonobos, are now planting flags offline. These are interesting times indeed, and they’re packed full of opportunities. Here are three things that we believe every retailer needs to seriously consider.

Pure Plays Have Seen Their Heydays

A pure online or offline play is a mistake for virtually all retailers. The reason is rather simple: Consumers live in both worlds and they’re coming to expect that the brands they care most about do too⎯and in meaningful ways.

Fans of Birchbox wanted to be able to touch the brand and interact with it in a way just not possible online. It’s why the brand now has a store in Soho⎯with, it’s interesting to note, salon services; it doesn’t get more tactile than that. Warby Parker, the aforementioned Bonobos and other online brands have also embraced, to varying degrees, brick-and-mortar.

On the brick-and-mortar side, Macy’s “click-and-collect” program, where consumers purchase online and then pick the items up at their nearest location, has gained serious momentum. Kroger recently announced that they’re testing click-and-collect in Cincinnati. And other retailers are following right behind. According to industry guru Scott Galloway, use of click-and-collect is up significantly from 12% in 2013 to 19% in 2014.

As competition heats up both online and off, every retailer needs to fight a two-front war. Both your online and offline presences can be strengthened by the data gleaned from each other. For instance, online sales can help determine what to showcase in a pop-up store. In addition, comments and testimonials solicited from shoppers in-store can be published online.

We worked with a retailer whose product was bought online but delivered in person to the home. We advised this retailer to feed online information to the delivery drivers so that they could make in-field recommendations to customers. We called this “real-world re-targeting.” The point is: the whole can be bigger than its two parts.

Store Mix & Loyalty Programs Must Delight

Despite all the talk over the past decade about one-to-one marketing and hyper-personalization, a lot of retail brands remain cookie cutter. You see this in the products offered, in store layouts and even in loyalty programs. It is, of course, a reflection of retails long love affair with consistency. But that’s not working any more. At least not for consumers.

Shoppers expect to find something different in each of your markets, if note ach of your stores. Perhaps it’s something locally made or maybe a unique pattern available only in a select location or two. These “extras” enhance the shopping experience and provide that little surprise that puts smiles on faces and dollars in registers.

Once again, data can help guide the way. Market-by-market (or even store-by-store) sales data can shed light on what might work well for a particular market or store even if it’s not right for most of your locations. Of course, if you’re going to customize store offerings, you want to merchandise them in a way that consumers notice.

As for loyalty programs, all indications are that consumers are growing weary of the points-for-purchase model. The novelty has worn off and it can be tiresome tracking them. Besides, the desire for a more “me” experience has consumers looking for reward programs that are more tailored to them, that go beyond just purchases and are more relevant to the brand.

For instance, Sephora offers beauty tips and purchase history info so you can recall what shade of lipstick you bought last. Starbucks offers members free food and drink, which is what they said they wanted. Yes, customized loyalty programs often require more effort and more dollars. But our experience shows the potential increase in sales and the excellent source of data from your best customers—who will be willing to share more for better rewards—makes the investment a wise one.

Fast is No Longer Fast Enough

As The New York Times pointed out, one reason for the Gap’s stumbles of late is that newer brands such as H&M and Zara are responding to runway trends in mere weeks, while it’s taking Gap months. And months. Arguably, ours has never been a patient culture, but whatever strands of patience may have existed are all but gone.

It is, of course, no longer just advertising bringing product news to our attention and fueling demand. It’s the near constant flow of posts, tweets and pics across our screens, many from friends sharing their latest product acquisitions and reviews. A lot of what we see, we want. Now. It’s why “fast fashion” has emerged as a trend. And why we’re on the verge of “fast everything.” (Cue the Amazon drones.) Look again to your data to help determine what products your customers want the “mostest and fastest” and let that be your guide.

This is a time of considerable tumult in retail. But in this change can be found competitive advantage and bottom line growth. We’d be glad to help you find both in these most interesting⎯and opportunity filled⎯of times.