Is the retail apocalypse closer than we ever could have imagined? It certainly seems that way. As Toys ‘R’ Us, a globally recognized brand, closes its brightly colored doors for the last time, the retail world is shown the stark reality of what happens when a legacy retailer fails to catch up with customers in the digital world. Transforming retail has turned out to be a whole lot more complicated and challenging than anyone expected, even more so for retail titans with foundations in the world of brick and mortar. Why was the demise of Toys ‘R’ Us inevitable, and is there any way that established brick and mortar retailers can avoid the same fate?
Why Transforming Retail is so Tough
It’s not that Toys ‘R’ Us didn’t try to stay relevant. In 2017, they hired a new CMO who was tasked with driving the move toward a more data-driven approach to marketing. They also brought in a crack team of “turnaround experts” to transform their approach to CRM and ensure that the company was creating the data required to inform a fresh, digital-centric attitude. There was even a Toys ‘R’ Us app that used QR codes to present video and other content to customers in store.
Retailers across the board have implemented similar measures, to similar levels of success. So why do even seemingly aggressive tactics like these amount to too little too late? In a nutshell, you can’t meet the challenges of the current marketplace with ideas, processes and technologies that worked 10 years ago. Not only is the competitive landscape completely different, customers now have completely different demands and expectations of the shopping experience. More importantly though, it seems that even the most panic-stricken retail execs are still working to timelines that lack the required urgency.
Technology and the customer experience that it enables is evolving faster than even e-commerce leaders can easily keep up with. So it’s easy to see why it borders on impossible for legacy retailers to make the fundamental changes required to keep up, without replacing the entire executive team, cutting losses and adopting a do or die attitude. Unfortunately for most in this situation, there are just too many moving parts for this approach to even be a possibility worth evaluating.
Surviving the Retail Apocalypse
Despite the gloomy picture that the Toys ‘R’ Us story paints, it seems like it’s still premature to believe that there’s no hope of legacy retailers ever managing to transform fast enough to stake their claim in the new digital-based world of retail. Remarkably, much like in the digital world, those leading the charge are doing it off the back of personalization technologies. In what must be one of the most dramatic role reversals in the history of business, physical stores are now having to find ways to bring aspects of the digital shopping experience to the brick and mortar store. Insane, given that just a few years ago, online retailers were clamoring to find ways to make the online shopping experience feel more personal and meaningful, like it is in a physical store.
For example, let’s take a look at Sephora, a cosmetics retailer which seems to have cracked the code. In 2016, Sephora recorded double-digit growth in profits and revenue for their parent company LVMH, and they have since expanded to more than 100 stores. The cornerstone of Sephora’s success is their Beauty Insider Program. Designed as a way to cultivate brand loyalty and provide a personalized customer experience, the program tailors e-commerce recommendations to a customer’s exact skin type and tone, as well as eye and hair color. It is fully integrated across the site, app and marketing emails and even includes a points system that opens up greater rewards to loyal customers.
Sephora’s first win was moving the entire brand experience into the digital space. A customer can discover, research, compare and purchase the product range online, which is very much in line with modern consumer expectations. Then, rather than making digital transformation an agenda at board meetings and hiring new team members whose job is to find ways to make legacy systems relevant in the digital world, Sephora made the customer experience its top priority, leveraging every possible asset and resource in its pursuit. Nothing less than this is going to earn traditionally brick-and-mortar stores a place in the modern marketplace, or make it possible for them to survive in the experience economy.
Personalization is Power
Shopping personalization is now a basic requirement of the online shopping experience and brands that fail to fall in line are doing nothing less than ignoring the expectations of their customers. Fortunately, securing personalization capabilities need no longer be just another factor holding your brand back in the digital race. Liftigniter is an easy, fast and affordable way to transform the customer experience you offer, through advanced and flexible personalization features. Let’s chat about how we can work together to bring your brand up to speed with the digital revolution.
