Last year, some of the largest players in traditional retail closed over 5,000 stores, and this year the trajectory doesn’t appear to be slowing. Toys R Us, Teavana, Gap, and many other large brands are set to close hundreds of locations in 2018. Large competitors, like Amazon and other online sellers, seem to be dominating the marketplace. But what is it, exactly, that sets Amazon apart? Although we’re seeing a clear trend towards digital purchasing, this isn’t the sole reason traditional retail is failing. Here are 3 of the key reasons brick and mortar stores can’t keep up (and how to fix them):
- No personalized customer experience
If there’s one thing the best brands are doing—it’s creating a unified customer experience. People aren’t JUST buying in store, anymore. They shop on their cell phones, tablets, and computers, as well. A successful company needs to know their customers activities across all devices and touch points, and market to them in a way that shows consumers that they know and understand what they’re looking for. If you track your online sales separately from your in-store, you’re not creating the seamless customer experience that is now an industry standard.
- Data silos
Most major brands have data that is sitting in separate silos, in separate departments. When your merchandising market is separated from your online market, you’re setting yourself up for failure. This inhibits you from creating a seamless shopping experience for your consumers. Giving your customers relevant offers and promotions, based on their previous behaviors and interests, fosters trusts and builds brand loyalty. Without this connectivity across channels, it’s impossible for retailers to be competitive in their space.
- Selling things; not selling to people
Today, the focus must be on the customer—not on each individual transaction. If you can acquire and retain one customer, their lifetime value is worth infinitely more than the revenue you would generate from the sale of a single product. The best retailers provide customers with their purchase history, “wish lists”, and tailored suggestions based on past orders/views. It’s difficult for traditional retailers to mimic this (mostly digital) experience, but by blending your data across all channels, you are able to provide customers with offers that are relevant to them, and therefor create lasting relationships.
It boils down to this: traditional brick and mortar stores don’t function in a way that equips them to be competitive in today’s shopping environment. Simply having a website, does not make a retailer omnichannel. Storing mobile data doesn’t give them the deep insights they need about their customers. Retailers must understand all their data, across all channels, and use it to create meaningful interactions via the channel each customer is most likely to utilize.
If you’d like to learn more, or talk about a possible use case at your company, please get in touch with us so we can explore this together and see where you goals may align with an AI solution.