A key factor in continued success in the retail environment is the retailer’s relationship with the consumer. Retailers have begun to understand that the relationship with the consumer must include more than simply offering the lowest prices for the products. This lowest price strategy and everyday sales has created an unsustainable market for most major retailers and they are also finding that this focus only encourages the consumer to shop when there are sales and dramatic discounts. The key to customer retention and the regular return of consumers to the retailer is the relationship with the retailer and this relationship must be built on more than low price in order to be sustainable for the retailer.
The retailer must develop a relationship with the consumer that is beneficial to both the retailer and the consumer. This relationship between the retailer and the consumer must not be focused on any one channel. It is critical that the omni channel retail marketplace must develop the customer relationship across both the virtual and physical channels in order to be successful and maintain a long lasting relationship with the consumer that benefits both the retailer and the consumer. The means to identify the consumer across channels has already been put into place by the retailers, the loyalty program. This program was initially instituted to track consumer purchasing and focus sales offerings to the consumer based on past purchases, now this loyalty program must be extended to focus on the mutually beneficial relationship between the retailer and the consumer.
This loyalty program must be expanded to build an omni channel relationship program. I know that retailers already use the loyalty program ID across all channels, this is important because it allows the retailer to track consumer sales and provide the purchase benefits to the consumer. This program though needs to be expanded into a true relationship program and expand the program to include a type of advisory capability along with a social networking aspect. The loyalty program provides an incentive to the customer to purchase from the retailer while the addition of the relationship development aspect of the program would provide the customer an incentive to linger at the site socializing and also encourage friends to join and participate.
This participation aspect of the program is a key factor in the future success and growth of the large retailer. Think about your local independent coffee shop or independent book seller. You return to these places over and over because you have developed a relationship with them and the employees there. They get to know you and understand your likes and dislikes based on conversations over time and they are able to make suggestions based on your tastes and also value your opinions on products or offerings. Its not to say that you won’t purchase from Amazon or Dunkin Donuts but on the other hand you always return to your local shops. The goal of the large retailer must be to develop that personal relationship to ensure the return and participation of the customers.
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?