Retail Ch-Ch-Changes

Outside In with C-Space CEO, Charles Trevail, is Customer Centricity Podcast that takes a look at the strategies and philosophies of the world’s most customer-centered brands. Leaders from business, media, and academia discuss the importance of being a customer-inspired organization, and share best practices on how to get there.

 

In this episode of Outside In,  Richard Kestenbaum Is interviewed by Charles Trevail of C Space about the dizzying changes we see in the retail landscape and the disruptive yet promising changes we're seeing in Gen Z's consumer mentality.

It wouldn't be surprising, Kestenbaum states, if you currently feel a pervasive trend in the form of "closing up shop". In his Forbes article he offers a partial list of some familiar retailers that are closing multiple stores and how many stores are going away in 2017 or have closed recently.

Retail stores used to be magical destinations where consumers would be encouraged by merchants to pour over an array of commodities they were told they needed and could only access at said retail destination. Consumers were reliant on retailers for access, entertainment, and affirmation. So what happens when that power is decentralized, shaken from the hands of the retailers and thrust into the palms (quite literally with the rise of smart phones) of the consumers?  The original idea is obsolete. "As smartphone penetration and internet use has increased," Kestenbaum argues "the importance of retail stores has declined. That's not all. The biggest reason why stores are closing now is that what consumers want has changed."

Kestenbaum identifiesa handy of desires list that draws a stark contrast between the consumer mentality of yester-years and the consumer mentality of now.   

 

Previously retailers thrived off:

  • Mass
  • Commercial
  • Global
  • Generic
  • Prestigious
  • Status

That won't work anymore. The contemporary consumer want products that are:

  • Locally-sourced
  • Ethically made
  • Environmentally friendly
  • Artisanal
  • Authentic
  • Experiential
 
 

The metrics for a successful retail experience and a compelling product assortment, as judged by Boomer consumers and Gen Z consumers are vastly different.  In fact, one could even say that the Gen Z shopper, raised in the age of social media, considers him or herself first and foremost a cultural curator, entitled by the speed, flexibility, customization and individuality cultivated in a post-internet age. The barometer is not, how well can I fit in? But instead, how good are you at being yourself? How authentic? How unique? The paradigm shift necessitated by a Gen Z consumer, Kestenbaum argues, is fundamentally one of going from thinking like a retailer, to thinking like a tech start-up. The problem?

 Kestenbaum draws our attention to a realization made by  Pano Anthos, who runs XRC Labs, a retail and consumer goods accelerator, who notes that technology and retail are structurally at odds due to the following core attributes:  

 
 

Technology companies:

  • Fail fast and often
  • Build to learn
  • You know better
  • Do it first, ask for forgiveness later
  • Open the network, move forward

Retailers :

  • Never fail
  • It has to be perfect the first time
  • We know better
  • Get permission before acting
  • Close the network with exclusive arrangements only
 
 

Synthesizing these two approaches is hard and for many old-world retailers it's culturally challenging. Consumer product companies that are digitally native now have a big advantage over legacy retailers with legacy approaches. Still, there is a high premium on listening to the customer and a high premium on the kind of community one only feels in a brick-and-mortar space. It's a new kind of survival of the fittest for retail. Retailers need to get in, and stay in, the ready position for change. Success will be measured by who evolves to listen closely, remain agile, rooted in a greater mission and yet responsive. and still yet timeless, reliable and consistent. 

 IDEO GRAPHIC CONVEYING HUMAN-CENTERED DESIGN

IDEO GRAPHIC CONVEYING HUMAN-CENTERED DESIGN

So go, listen to each Outside in Podcast and you'll come out feeling like an customer-centric strategist savant. The Outside in episodes are a bottomless well of customer-centric inspiration and we highly recommend starting from the beginning with their inaugural podcast, with The New York Times’ Ejieme Eromosele, Managing Director of Customer Experience, to explore the evolution of customer experience at the The New York Times here

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