Retail is now a marketing channel – not a sales channel.
Apparently Albert Einstein did not say “The definition of insanity is doing the same thing over and over and expecting different results”; however, whoever did coin the phrase certainly shone a light on one of the pillars of life – ‘security’, which is found in our comfort zone. When we are in our cocoon, safe and protected, we find it hard to embark on change, even when we know the cocoon is no longer the way ahead.
The news about retail and retailers has been grim for a number of years now, and over the last 18-months in particular, the adage attributed to Einstein keeps looming bigger, BIGGER and BIGGER. From the breakfast at a Big Four accounting firm predicting the demise of Toys“R”Us a year ago, to the news of Marks & Spencer closing 100 stores by 2022 and Top Shop becoming loss-making, the majority of retail executives continue to treat retail in the same way today as they did 10 years ago. The decline of profits from retail and the growth of on-line channels was well on its way then and still …today, there is little vision for the future.
Delving deep into the numbers and highlighting lease costs, closing stores and ‘simplifying product lines’; hiring digital marketers to drive social media and expecting clicks and likes to translate into equivalent internet sales is still being in our cocoon.
Brand awareness and brand loyalty are arguably stronger now than ever before. People across all walks of life are able to access information faster and more efficiently, and it is THE information that they want to consume, WHEN they want to consume it.
Whilst consumers today have vast choices, we still do what we have been doing for hundreds of years: get dressed in the morning, eat our breakfast and clean our teeth (most of us, that is), and understanding how and why we make those choices and build those habits is the key to solving retail.
Two key words – emotion and attachment – are the answer.
How do we create an emotional attachment to a brand, a product, a channel, a store…anything? And how do we turn that attachment into a habit, and bring it into our cocoon?
These are the fundamental questions for retail.
What are retailers doing to create emotional engagement to either drive the impulse, must-have purchase, or drive the habit – and what are they doing that is different?
Doing the same thing again and again in the eyes of consumers is not going to work. Selling the same products that can be found online in the same way as they have been sold for the last 10 or more years is not going to solve the retail problem. It is not about store layout or even the product itself.
With the ongoing demise of retail is strong talent that lost their creativity and became bogged down in the minutiae of boards looking for shelf space ROI, spend per footfall or improved lease costs. HR is being driven down the route of hiring finance-driven capabilities, P&L management, better product designers…and all are losing sight of WHY it is that people make choices.
Retailers need to see their space as a marketing avenue, a way to engage with consumers as they might through television advertising, Facebook or editorial. Retail space is a communications window and potentially, given the human-to-human element, one of the strongest ‘engagement’ channels for creating true emotional attachment.
What this means is no longer accounting for retail as a profit centre, but rather transforming it into a cost centre that drives emotional engagement and develops habits.
Retail is now a marketing channel – not a sales channel. And until boards realise that, we will continue to see the closure of stores and the disintegration of brands.
Retailers that truly use their space to create events and happenings, drive habitual reasons to return to the store, invest heavily in their staff becoming absolute experts in their field, build experiences, and give back to their consumers through this environment – regardless of where they buy – will win the hearts of their target audience. And leaders across functions who move from pure P&L ROI retail to retail as an engagement channel will be the future that we are looking for.