Instantaneous, fun, customised: tomorrow’s retailing

barbaWhat will tomorrow’s retailing look like? The response of Catherine Barba, an expert in e-commerce and digital transformation, based in New York, at the cutting edge of the trends.

Everywhere, all the time

Tomorrow’s retail must be with me everywhere, all the time, and without interruption,” says Catherine initially. Our expert believes that, from now on, the key requirements are simplicity and immediacy. And on this topic the young woman has just one name on her lips: Amazon. As an example she cites the retailer’s latest function: the “Dash” button. This connected device can be attached anywhere in the house by an adhesive band and lets you order the products used on a daily basis. With one click, you can now replace your ink cartridge or your coffee. Launched in April 2015, the US giant has already sold over 20 million of them. “It’s a real revolution, simplifying the consumer’s life whilst bringing recurring sales for the retailer,” she says enthusiastically.

Have fun whilst shopping

But speed is not enough. Tomorrow’s retail must also be entertaining. According to Catherine, consumers now expect to be rewarded with a highly emotional experience. She uses the MikMak application launched in summer 2015 as an example. This already has over 1,000 products of 250 brands presented by professional comedians in videos of less than thirty seconds. “These minimercials are very successful in the US with a conversion rate of 8.5%. It’s a bit like the 21st century version of teleshopping.” But for e-commerce, it is once more Amazon which makes a clean sweep by making it fun. “With an Amazon Prime subscription for $99 per year, not only do I not pay any delivery charges, but I also have free annual hosting for all my photos and access to a catalogue of tens of thousands of films and music tracks on demand. A sort of combined Netflix and iTunes.”

Stores have to match this performance. Here again, her stay as an ex-pat in the country of Uncle Sam has been a source of inspiration. In particular, she mentions The Story, a new concept store, which changes its product range and design every two months, creating surprise and rarity value for its customers. She also mentions littleBits, the specialist in electronic building blocks. Its stores become a place where customers go to take part in workshops, to watch tutorials, to put together parts, to question experts, etc. “Come and buy, come back and learn: this could be their motto.” Finally, Catherine mentions new brand trends in ready-to-wear, which make their clothes available in hotel rooms, transforming them into showrooms. “Many sales outlets could disappear in the next five years, across all sectors. We no longer have the right to be boring retailers. With digitization all companies must re-invent themselves. And this transformation only really starts once the CEO, the manager, makes digitalisation their number one priority.”

Customised service

“More than ever before, the customer stands at the centre of the system: everything must revolve around customers and their wishes,” continues Catherine, who recognises the virtue of personalisation. As an example she cites those new players bringing an innovative response to fragmentation (high expectations of personalisation) and speed (the age of urgency) when buying: these are the assistants via text messaging called Magic Operator in the US, GoButler in Germany and Jam in France. Their positioning: to be your one-stop-shop for all your requirements. Their promise: to get you everything you want immediately upon request: tickets for a museum, ordering a pizza, finding a GoPro quickly at the best price. In short, emergency butler services for which you don’t require a Visa Infinite card. These are not virtual services like Siri because there are humans behind the text messages. “The user sends a request by text and gets an immediate response. Magic is so successful that I am number 50,000 on the waiting list!” Catherine explains that this personalisation must still be present in the after-sales service of these companies. She almost apologises for again mentioning Amazon. “A few days ago I wanted to buy something on their site, but it would not accept my French card. I immediately got a call from their support with assistance and a reduction of €15 as compensation. Customer empathy is no longer optional when building consumer loyalty and Amazon has fully understood this.”

The last word?

“What became clear to me in 2015 when I came to live in the US, is that business transformation will not work if you are happy to proceed at your own speed. Whether you are a retailing giant or a city-centre store, faced with the tidal wave that is Amazon, radical decisions must be taken quickly, you need to invest heavily and sustainably in digitization and thus accept to earn much less for (at least) the next ten years. Companies need in-depth restructuring and must recruit employees with very different profiles, who are hungry for the future and have a completely different take on the industry. I’m afraid that managers who are not prepared to take these radical decisions will be their company’s gravediggers. Because it isn’t just a question of responding to your client’s primary expectation of a straightforward seamless experience, by speeding up procedures, optimising flows and setting up more direct relationships between your sales channels. You need to shift to a completely different model where your expertise, the sale of goods or services, historically in physical stores and increasingly via digital channels, will soon no longer be the only dimension to your business.”

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Apax Talks is a digital magazine aimed at company managers. It presents growth levers for SMEs, with a focus on TMT, consumer, healthcare and services sectors.