Retail: the forgotten innovators.

Guest author: Isabel Wu

Few industry sectors have changed as much in the space of five decades as retail. The people who seem to least realise it are retailers.

What hasn’t changed: sellers displaying their wares, using their skills in merchandising, marketing, service and sales to entice shoppers. What has changed: sellers displaying their wares, using their skills in merchandising, marketing, service and sales to entice shoppers.

If you can’t tell the difference between the former and the latter, you may not be suited for retail in the twenty-first century.

Technology has changed customer expectations.

The difference, of course, is technology. Technology has changed customer expectations. They want, and if you don’t have it, you’re made irrelevant by a simple click or swipe. But customers also want to be enticed; they want to feel virtuous, elevated, enlightened, validated, connected, augmented. Once this was the role of the brand. Today it’s the role of the purchase itself, also known as customer experience. Without this, you’re left to compete on convenience and price. And no, customer experience is not another way of saying better customer service.

Just as your smartphone has merged multiple devices – the telephone, alarm clock, watch, camera, diary and television, for example – technology merges our perceptions of value. We don’t accept different standards for different services any more. If we can track our rideshare progress, we expect to track how far behind schedule our tradesperson is running, how many more steps to completing a registration, how many seats are left at that event, where our food comes from, how many people just bought the same thing and what they thought of it. Yes, you can say this is just some people, especially those fickle Millennials. But then you might be forgetting the innovation adopter bell curve. The innovators have been on board for almost a decade, and now that the early adopters have made their influence felt, we are pushing quickly through the early majority stage.

Fuelling these changes are the increased choices available to customers. Peer-to-peer selling, the appeal of second-hand goods, sharing instead of buying, renting instead of buying, going directly to wholesalers, crowdsourced deals – all facilitated by online platforms. Retailing no longer needs a retailer.

And if you are hoping to enter the workforce through retail (as our teachers, parents and career counsellors continue to advise), it’s good to know that the rate of employment in retail is steady – but the jobs are mostly casual, penalty rates have been reduced and the people competing for these jobs are no longer just students and mums looking for part-time work. Job site SEEK’s data shows that the most competed for the job in Australia is picker/packer. At number two is retail assistant.

The competition for the customer is no longer going to be played out in the shopfront. Price promotion, merchandising and product variety are low impact activities for customers who are spoiled for choice, but are high impact in terms of cost and effort for retailers. This means if retailers are to remain competitive, they must re-calibrate how they interact and engage with customers. With their smart devices in hand, customers expect nothing less.

It means moving retail from its reactive, backwards-focused approach that may have once served it well, to a technology-enabled, automated, data-driven future. We need to take people out of the manual processes that are slow, inaccurate and expensive. Progressive players taking advantage of affordable tracking devices, sensors, artificial intelligence, predictive analytics and IoT, are already pushing laggard retailers to the brink. There is still a long way to go to realising the changes these technologies are capable of making.

The future of retail is hi-tech and high engagement. People need to be deployed in activities that leave a positive lasting imprint, if not in tech roles, then with customers, for example teaching, creating, listening, and solving deeper human problems like loneliness, waste, anxiety and insecurity, not fuelling these. People are sick and tired of mindless consumption, impersonal spaces, process-driven interactions and the lack of initiative, understanding and flexibility that continues to characterise the majority of interactions – and that’s the workers, never mind the customers.

This makes digital transformation the single, highest priority for every retailer. A digital transformation is the organisational equivalent of the ctrl+alt+del reboot. It recalibrates the business around updated expectations, resources and practices. Yes, it’s disruptive, but that’s the point. Disruption is always better when you’re in control of it.

Digital transformation has three components.

Digital capability is having the internal ability and capacity to become a digitally-relevant business.
Digital strategy is the plan for enabling the processes needed to operate, market and manage your digital era retail business.
Finally, it is access to additional resources including skills, experience and expertise to drive the process forward. Change is hard. Change without new input is much harder.

Retailers have a long tradition as innovators. Harry Selfridge, Richard Sears, Sidney Myer, Frank Woolworth, Sam Walton, Jeff Bezos and Jack Ma are just a few of the retailers who didn’t just change the way people shop; they changed the way people live. It’s time for retail to stop being the canary in the coalmine of slowing economies and lead the economy into the new decade of our digital century.

About the contributor

Isabel Wu is the author of The Michelangelo Project: Making It in the Digital Century Workforce https://themichelangeloproject.xyz. She provides consulting and coaching services to help organizations transition to the future of work. Connect with her on LinkedIn https://www.linkedin.com/in/isabelwu.