Time to embrace deliberate disruption
Deliberate disruption needs to be baked into business thinking and planning. The reason? Thriving today and tomorrow will depend on an ability to see and behave differently, and in so doing, deliver on new customer expectations.
As the world’s biggest retailer, Walmart certainly packs some clout. With almost 11,000 outlets and net sales of $473 billion worldwide, it has a clear track record of growth.
In recent times, however, there has been a notable shift in the way Walmart talks about doing business. Bigger is giving way to smaller, and slower is making way for faster as it takes action to challenge its existing business paradigms and marketing approaches.
An example comes in the form of Walmart’s 70/20/10 principle. While the majority of its marketing is applied to what the company knows will work, the remaining 30 per cent embraces and experiments with emerging, new, and innovative approaches. As CEO, Doug McMillon, said, “change is embedded in our DNA”.
Meanwhile in the UK, Sainsbury’s response to the disruption created by Aldi has come in the form of a joint venture. Rather than change its existing traditional business model, Sainsbury’s intent is to win new customers and drive growth via partnership with discount retailer, Netto. Effectively choosing (as Harvard Business Review describes) to ‘play two games at once’.
What Walmart and Sainsbury’s both share is a strategy of deliberate disruption.
No matter the category, traditional retailers are all increasingly being faced with empowered and expectant consumers and an ongoing swag of new competitors. As such, it’s critical they think beyond business as usual and implement new approaches.
A way toward achieving this was highlighted by PwC, whose recent research outlines the key customer expectations driving the next retail business model.
Have a clear purpose that informs a compelling shopping experience
UK-based new generation coffee chain, Harris + Hoole, is doing just that. No cookie cutters here – each outlet reflects the unique nature of its local community to deliver the mantra ‘good coffee, happy people’.
It has created a compelling, personalised instore experience with an app that allows baristas to see a customer’s preferences as soon as they check into a H + H shop on their phone.
Customers can tailor their beverage order, adjusting elements such as size, temperature, and type of milk. The app makes ordering seamless and faster ,and minimises ‘noise’, with no need for scanners at the till. It’s already been used more than 100,000 times.
Customised offers based on protected personal data
Chicago-based men’s clothing service, Trunk Club, delivers a trunk of high end clothes hand picked by a personal stylist, shipped for free for customers to try on in the comfort of their own homes before deciding to buy.
Every trunk is unique and customers can connect with their stylist from anywhere on any device.
Selections are based on personal data – customer’s preferences, style, and body type – gleaned from a survey on sign up, with data protected to keep inside leg and waist measurements out of the wrong hands.
Give customers realtime visibility and connection to inventory
Foot Locker is delivering an enterprise-wide view of inventory to customers and its stores. Customers can shop online and reserve merchandise in a store – ideal for those who prefer to try before they buy. It also suits Foot Locker’s younger shoppers who don’t have credit cards, because they can reserve an item online and pay cash instore.
Sales associates’ mobile devices show stores where a customer can get a particular style and size straight away, or customers can order what they want in store and have it shipped to their home or store.
Conversations via two-way social engagement
Two way social media engagement is a key expectation of today’s shopper – even more critically among Millennials.
H&M used social media during this year’s Super Bowl to ask fans to vote for David Beckham to be #covered or #uncovered. They also enabled customers to shop direct from commercials via an internet connected Smart TV.
Always on, 24/7 – the expectation is that retailers will be on their A-game
You never know when a chocolate craving will hit, but with Lindt’s new online storefront, it doesn’t matter. Lindt is engaging US customers with highly personalised content, promotions and offers, while delivering the always on convenience of browsing online or through mobile devices.
Shoppers can mix and match items or design custom gifts and packaging. Online conversion rates increased 200 per cent and mobile sales by almost 300 per cent following the digital storefront launch this year.
In the end, it’s about being revolutionary, not evolutionary – embracing the challenge of change, innovating, and delivering the unexpected to customers who expect new and more.
In the 1990s, Apple had great success with its iconic ‘Think Different’ campaign. In 2014, it’s not just ‘think different’, it’s see different, act different, be different, try different, do different – and do it quickly.
As Michael Raynor wrote in ‘The Innovator’s Manifesto’, deliberate disruption is the only path to sustainable growth and success.
At school, you may have been sent to detention for being deliberately disruptive. In retail 2014, it might just send you to the top of the class.
Caroline Ghatt is planning director, brand and retail, at Leo Burnett Sydney.