In a world that’s moving at the speed of tweets, likes, and disappearing stories, it can be hard to keep up. This is all too apparent in a world of retail where there’s new terminology, updates to the old vernacular, and ideas becoming irrelevant faster than you can say “unfollow.” So we had this little idea that perhaps we should refresh our definitions of some common retail speak for 2018. Definitely informative, possibly funny. We’ll let you be the judge of that.
As you probably remember from your high school Latin class, “Omni” means all - so in a retail sense - all your selling channels are essentially united. Correction - should be united.
This term needs to go away, or rather, needs to be abbreviated to “retail.” While research has shown that most customers’ journeys - at least in apparel - are overwhelming still single-channel, the fact is a shopper doesn’t see it that way.
Let’s role play here.
Me as the customer. “I want to buy this thing today.”
Retailer. “Let me check my online inventory. No dice. Ok, let me check my separate store inventory.”
Me: “I don’t care where it comes from. I just want to buy this thing. Can you help me or not?”
Okay, in all fairness, we know it’s not that simple. But the point is you can’t force the customer to adapt to the way your business operates - it needs to be the other way around. Omnichannel (strike that) retail is knowing what your customer is up to - no matter where that behavior occurs. They’re everywhere, and so you must also be.
That place where customers come in and mess with all your stuff. It’s ground zero and where the dance between staff, customer, and your merch takes place. For the customer, whether driven by wanting to try something out, browse, or be instantly gratified, it’s the physical manifestation of your brand. And as with all things in the real world, it can be messy, imperfect, and deviate a lot from what you might have planned. You’ve just got to go with it and be able to pivot on the fly.
The real world being what it may, we’d still argue that there’s a whole lot happening on the sales floor beyond the ringing up of sales - that isn’t being tracked - but should be. Behavior online - you’ve got that covered. Behavior in store - much of that isn’t truly understood and when it is - it’s not always acted upon and even more often - not married with what a customer does online. You need to understand shopper paths, store hot spots, and how and why the journey might result in no sale and how that tracks with behavior in the digital realm.
Brick-and-mortar or bust.
An oft-used financial measurement that looks at the same physical store’s sales over the same period of time, often in quarters or seasonal periods like holiday, to see whether there have been changes in how much has sold.
The thing is...that is a static measurement that doesn’t take into account the dynamics and velocity of the world around it. Our thought is that while relevant - it’s an antiquated measurement. You’ve got to adjust for factors like changes in foot traffic, shifts from physical to a retailer’s digital channel, weather, the differences in your inventory composition, new market entrants, etc.
As Steven Dennis would argue - it’s a “same trade area” statistic - one that encompasses both physical and digital channels - that “becomes a very interesting metric,” if you want to really understand what’s happening in retail sales.
The sum of all the parts of a customer’s interaction with your brand. The tricky thing with customer experience is that it’s not just what actually happens when that interaction takes place, it’s how the customer feels and remembers the experience. And as retailers, you get excited about this one, right? And as well you should, because one industry survey found that “by the year 2020, customer experience will overtake price and product as the key brand differentiator.”
The tried and true method for understanding customer experience has historically been surveys and other feedback capture methods, but in the new world order, there’s a whole lot more data about customer experience beyond that Net Promoter Score. Moreover, there are different drivers of experience along the customer journey and different systems into which the data about these touchpoints should funnel. For example, an irate customer calling about a missing order and someone clicking into one of your promotional emails are both components of a customer’s brand experience, but ought to be measured very differently. As this McKinsey article points out - there should be clear KPIs in place that tell you whether you are hitting or missing the customer experience mark, and they should be calibrated to each customer interaction.
Oh, and we have some suggestions on the questions you ought to be asking your customers (if you aren’t already).
Analytics + Big Data
You’re probably thinking, okay, I know what big data is. I have warehouses and spreadsheets that could pave the way from here to the moon and back. The question really is, what the heck do I do with it all? We know. Many of you are probably already using large-scale enterprise systems to manage your massive and multiplying sets of data. Even still, utilizing that data in small nuggets can feel like trying to drain a lake one spoonful at a time. It’s ok. It’s a huge pain point that each and every organization, no matter its size, encounters.
At the end of the day, does your big data improve your profits, improve and personalize the customer experience (see above), and help you win customers? If not, then you need to think about whether and how your data systems are working with each other and the ultimate result or KPI to which each should be tied.
Learn more about quick wins and scaling up your analytics game here.
The new kid on the block. The one that’s more attractive, has a better wardrobe, drives the nicer car, and you want to hate them, but you just can’t take your eyes off of them. No, we’re not talking about your school days, but rather the retailers and brands who were born online and speak that language fluently. They excel at curation, social commerce, and story-telling, and customers have been responding by the droves. They’re brands we all know - Everlane, Glossier, Allbirds - to name only a few - and some of them have even had the audacity to try and cross over into physical retail. So even the definition of “digital disruptor” is getting muddled - it seems - and that’s just how it’s going to be going forward.
Our thoughts on digital disruption? There’s war stories to be traded between old and new schools of retail. And to be frank, some digital disruptors have proven that they didn’t have the discipline to stay in the game over the long-haul. We’ve got more thoughts on that right here.
Enjoyed our update on the retail glossary? Talk to us here to let us know your thoughts!