The large retailer’s customer pipeline has been disrupted by the combination of the omni channel retail purchasing framework, social networking tools and the generational change in socializing and shopping practices. Now retailers must adjust their customer acquisition strategy to account for these changes or they risk the continued loss of sales and market share. Retailers can no longer focus on a low cost strategy and hope to maintain and grow their customer base. The low cost model does nothing to promote customer loyalty, new customer acquisition and retention and so retailers must update their customer pipeline strategy to take into account the changes in the marketplace that are being driven by generational changes in shopping and socializing.
The difficulty lies in the retailer’s ability to understand and accept the level and velocity of change that is required to support the demands of the younger generations of consumers. There is a great deal of discussion related to younger generations and their embrace of technology from a young age impacting their social skills and their relationships. The crux of this discussion is the embrace of technology by younger generations to socialize and engage with others. This practice changes their relationships with peers and friends and family and more importantly to the retailer it changes the way that these younger consumers interact with the retailer.
The retailer must take these methods of interaction into account in their relationship development with younger generation consumers. The retailer’s customer pipeline provides the framework to interest and encourage consumers to shop and purchase and in order to be successful this pipeline must communicate consumers in a manner in which consumers can relate. This pipeline is the lifeline of the retailer and provides the continuous flow of consumer interaction with the retailer. Without this pipeline the retailer’s sales would dry up and the retailer would fail. Unfortunately most large retailers have replaced this relationship pipeline with a low cost strategy to attract and retain customers.
Retailers have found that the low cost strategy to attract customers is a losing proposition for them because there is always another retailer willing to to reduce the cost and more importantly because it does nothing to promote customer loyalty or retention. I find it interesting that small and local retailers have not run into this problem with retention and I think it's because they have always focused on the relationship and not the low cost. Large retailers used to understand and encourage the practice of customer relationship development and they have lost this focus as a result of focus on reducing costs. Based on all of the reports in the industry this strategy of cost reduction has finally been proven to be counterproductive for most retailers and now these same retailers must re-learn the ability to develop this relationship.
And now for the audience participation portion of the show…
ECommerce will have wide ranging impacts on both the retail and manufacturing sectors. How can you focus these abilities to improve the consumer's experience? Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes. In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas. How can you support these continuously changing requirements?