Despite the flashy “Retail Apocalypse” headlines, the truth is retail is alive and growing. Yes, some legacy retailers are struggling to adapt to the tidal wave of new technology and consumer demands that define today’s retail market, but innovative retailers are embracing technology to create exciting experiences, which are attracting new customers and allowing them to thrive. While physical stores and shopping in person will always be critical to retail, leading merchants are also keenly focused on expanding their “digital real estate” to ensure they're meeting their customers where and when they want.
Here are a few key insights that are helping top retailers drive change and excite consumers.
For the majority of retail history, retailers controlled the seller/buyer relationship. Retailers decided what was being sold and when, and if a consumer wanted something, they were forced to go to a retailer-defined space to get it. In the last five years, however, that relationship between buyer and seller has completely changed. In today’s smartphone, social media, multichannel retail landscape, consumers hold all the power. Consumers now have access to products all over the world right from the palm of their hands, and they can demand delivery of those products wherever and whenever they want. In this new environment, smart retailers are embracing the idea that they're no longer in the driver’s seat and are rapidly adapting their offline and online experiences to meet the needs of increasingly demanding consumers.
Be Where Your Customer Is
As the shift to a consumer-led retail model has accelerated, retailers have had to take their products to the customer instead of hoping the customer would come to them. This is true online as well, where a number of customer engagement channels have appeared:
- Social Media: Facebook, Snapchat and Instagram have become the dominant platforms where consumers are spending time. Smart retailers are finding ways to not only promote products on these platforms, but enable shoppers to make purchases natively.
- Mobile: Our phones have become the primary search and purchase tool for shopping. Simply having your online store appear on a mobile phone is no longer enough. Leading retailers are using this specific digital real estate to create mobile-first shopping experiences designed for the form factor of a mobile device.
- Marketplaces: Amazon.com, eBay and Alibaba have become go-to sites for finding new products. In today’s multichannel world, avoiding marketplaces isn't a viable strategy. Top retailers are leveraging marketplaces to drive customer acquisition and product discovery.
- Online Stores: The online store remains the primary digital asset of top retailers, providing a dedicated experience that they can completely control. However, smart retailers are learning that constant iteration and experimentation are required to keep your online store relevant to today's shopper.
Consumers don’t care about online or offline, they just want to have great shopping experiences, when and where they want them. Retailers today must understand the various online assets and ensure they're creating compelling experiences in the places their customers are spending their time.
Leverage, Don’t Own, Technology
With retail technology, consumer options and digital real estate exploding over the past few years, smart retailers are rethinking their IT strategies. For most, the days of owning and staffing large technology organizations are over. The cost and lack of speed and agility of these internal organizations no longer matches the pace of consumer innovation. Top retailers are rapidly shifting their models to partner with retail and commerce technology companies that can give them the tools and scale required to compete, while focusing their own precious resources on product and customer experience. This leverage vs. own strategy to IT is allowing retailers to more rapidly experiment, constantly iterate and significantly reduce costs associated with engaging their customers.
Retail is being reborn into a world where customer experience is king, and online and offline are becoming intermingled. Optimizing digital real estate to maximize customer experience, while leveraging technology for growth, has become a critical topic at the executive suite of major retailers. Understanding what channels your customer is in and how best to engage with them can be the difference between success and obsolescence in today's rapidly changing retail landscape.
Loren Padelford is the vice president and general manager of Shopify Plus, an enterprise e-commerce platform for large and growing online stores and brands.
Related story: Harry & David's Brand Redesign Points to Digital Future
Loren Padelford, VP & GM of Shopify Plus
Loren Padelford wears many hats within Shopify. In his role as VP & GM of Shopify Plus, he oversees Shopify's commerce solution for high-growth, high-volume merchants like Kylie Jenner, Rebecca Minkoff, GE, FashionNova, RedBull and Nestle. Loren is also responsible for leading the Shopify’s Retail go to market-team focused on the development and distribution of technology that continues to redefine the in-store experience for both retailers and consumers. Finally Loren leads the Shopify Influencer program helping Shopify's extensive group of celebrities, athletes and social media personalities translate fame into commerce and retail success. Prior to joining Shopify, Loren held senior leadership roles at technology companies in Canada, the US and Europe. Loren holds an M.B.A. from The University of Liverpool, and a Bachelor's degree in Psychology from the University of Guelph.