October 21, 2014

Sitting At Home: The Problem With Retail

The story of the Fall is the inability of businesses to acquire new customers, and the inability to reactivate lapsed buyers.

It's a catastrophe in retail.

We have spent a full decade teaching the customer that they do not have to get in a car and drive to a store. From 2000 - 2009, it was all about "being multi-channel", which was code for "make sure the website integrates with the retail store experience." Retailers dove in, head-first. Today, it's crazy to think about a retail website that provides a fundamentally different creative and merchandising experience from the store.

This level of integration, of course, came with a caveat.
  • "If the website offers the same merchandise and the same prices as the store, why should the customer get in a car and drive to a store?"
Nobody bothered to provide an answer to that question. I've been in the meetings. You should see the blank stares one gets when one asks that question.

We're now seeing the consequences of not being able to answer that question.

Retail is a habit.

In other words, it takes hard, hard work to encourage a customer to visit a store all the time. You're asking the customer to give up an hour or two of time, battling traffic. In e-commerce, you're asking the customer to give up 10 minutes while sitting in a recliner. 

Which is the path to least resistance?

By encouraging the customer to sit in a recliner and shop online, we broke the customer habit of visiting a store. It took years to break this habit ... and as it became obvious we were breaking the habit, we tried to patch the pothole with discounts and promotions.

So now we've got a problem of our own creation. We told the customer to sit at home. Now we want the customer to sit at home researching our merchandise, and then we want the customer to get in the car and drive to the store. We want the customer to spend more time with us, but we give the customer no reason to spend more time with us.

It will take a decade for us to re-train the customer. By then, stores will be closed, brands shuttered.

Omnichannel!

It is time for imagination. Imagination, and only imagination, can be used to retrain the customer to visit our physical stores.

In other words, we're not going to fix lapsed customer and new customer problems with tactics. We're going to have to imagine our way out of the problem we created.