I recently caught up with John Deighton, the Baker Foundation Professor of Business Administration at Harvard Business School, to get his thoughts on this evolving trend.
Frank: John what are your thoughts on how combining technology and improved in-store experiences is changing the retail paradigm today?
John: Technology continues to be the key driver for massive change in retail. It’s created an environment that has totally transformed the shopping experience. But for all the many conveniences offered by online shopping, we’ve lost the comfort of an intimate, face-to-face transaction. A relationship if you will.
I’ve written about the importance of the shopping experience in a brick-and-mortar setting before. Invoking a customer experience, by which we mean the sense of having encountered something out of the ordinary, needing to be made sense of, something fun, is deeply rewarding. And now in utilizing technology, both in brick-and-mortar and online scenarios, we need to further ensure that shopping experience, and that relationship between consumer and brand, remains rewarding.
How important is it for retailers to work on re-establishing some form of a relationship with their customers?
John: Retailers, in general, have no choice but to know their customers as individuals if they want to stay relevant. But it’s the natural condition of the shopper to not want to share their information. And this anonymity is the enemy of retail and the enemy of relationships. So, to create helpful relationships and build trust with your customer, you need to give them a reason, and a benefit, to share.
In the past, retailers have abused the privilege of information. Too often personal data has been collected and used, but without providing an actual benefit to the customer. Intimacy is valuable, but it must be earned. Show customers that by trusting and sharing, the shopping experience can be enhanced. Technology, particularly when it is driven by personal data, has the capability to place the shopper in the action, and drive the experience.
So do you believe retailers can succeed by gaining trust and rebuilding relationships?
John: The future of retailing is as promising as the future of technology. Companies like Alibaba, Nasty Gal, Everlane, Bonobos and Birchbox are creating seamless customer experiences across channels by utilizing technology. From physical to digital and back again, they are melding the digital and brick-and-mortar experience. And when e-commerce comes down from the cloud, it brings its valuable data with it.
Most importantly, these retailers give actual human beings—their sales staff—access to this data. It’s this true interactive relationship with customers, their data and the sales staff that offers the singular key to a successful and fulfilling retail experience. The stores and the associates are empowered to greet their customers with some form of identity elicitor and take the conversation from there. The sales associate at an Amazon store, for example, knows as much about someone who walks into the store as any algorithm knows about an online site visitor. Amazon’s analytics utilize data from both channels, which then feed the online and in-store sales efforts.
Imagine the reward of a seamless, personalized, intimate shopping experience. As a retailer, this is the pivotal point. And empowering your sales associates with the technology to drive intimacy within this experience is vital. But it’s here that I stress how much I really like the slogan recommended by Ana Andjelic & Rachel Conlan of Havas, “Use data like a butler, not a stalker.” Remember, many customers tend to shy away from sharing too much information. Be respectful in your relationship and your conversations when using the application of technology. It’s through this, that both parties receive the ultimate rewarding retail experience.
Thanks John. It is certainly an exciting time for the retail industry. I appreciate you sharing your insights.