(Note: This is a guest post by Matt Gutermuth, who serves on GrocerKey’s Strategic Advisory Board. Here, Matt shares his perspective on the online and in-store shopping experience in today’s world.)
Now that “eCommerce” is more popular than ever, I propose something you might find shocking: it’s the perfect time to retire the term. After all, it’s become quite “normal” for consumers to purchase any number of things via electronic means, and they fully expect the online experience to mirror the in-store one. That being the case, I submit it’s now time for retailers to stop viewing these experiences as separate, but instead create an environment where consumers can engage with the retail brand on their own terms, when and where they prefer.
When one talks about eCommerce, does this just mean a new online distribution channel or a new way of doing business? Or both? What role do physical stores play in a future world influenced by our digital economy? Leaders need to stop thinking about eCommerce as a separate, new thing, and just think commerce — delivered in new ways. Consumers care about choice, value, convenience, and cost. They don’t think about channels or corporate silos.
Like Nike’s classic tagline, “Just Do It,” I say that, going forward, eCommerce should become “Just Commerce.” It’s not simply about adding an online presence or eliminating stores — it’s rather about evolving the consumer experience across all channels seamlessly, creating a branded experience for your consumers wherever and however they choose to engage.
Apple Stores: Digital Goes Physical
As a leader in the digital revolution, Apple Inc. now has almost 500 retail outlets across the globe. Their strategy is to deliver a complete consumer experience that reinforces a brand that is cool, hip, sophisticated — melding design and engineering in ways no other company has. The company’s stores reflect this experience. Designed like modern art galleries, the stores display a variety of Apple products like works of art.
They also serve a practical purpose: providing support to consumers by setting up their devices and handling repairs. Surprisingly, recent research indicates that men over 65 spend more on Apple devices than any other demographic. You can imagine that this supposedly less tech-savvy group is also more likely to use the store to help set up and learn how to use those devices. Creating hands-on experiences was the motivation for opening the first store back in 2001, years ahead of the launch of the first iPhone in 2007. At the time, the intent was to have consumers test drive the new Mac laptops, which still had a small share of the market compared to PCs. Today, these stores create an environment where consumers can get help setting up their iPhone, iPad, or Mac, while checking out a new Apple Watch, or purchasing some cool wireless earbuds.
Even as online commerce exploded, Apple doubled down on the strategy, opening hundreds of new stores. They re-invented the in-store experience by removing cash registers, effectively turning every employee into a consumer-facing brand ambassador, one with the POS system on the iPhone in their hand! They took a more expansive view of commerce that included online, stores, and distribution through third parties (Verizon, AT&T, Best Buy, etc). But, regardless of the channel, this strategy enables the consumer to have the same experience with the brand no matter where he or she interacts with it. Each part of the strategy serves a specific consumer need and demographic segment, and, all the while, the Apple brand experience stays consistent.
Creating a Culture of ‘Just Commerce’
Changing consumer preferences for anytime, anywhere access require brands to provide a seamless experience across channels. Unfortunately, many companies are culturally and organizationally set up to fail because they see online and physical stores as separate, rather than complementary or integrated. To bolster their online capabilities — and to counter the Amazon onslaught — retail leaders like Walmart and Target are expanding their digital presence by adopting a tech startup mentality: opening offices in Silicon Valley and funding tech incubators that are run separately from the rest of the organization. They want to move faster, freeing these new teams to take risks and innovate in ways they believe are not possible within their larger corporate structure.
Store No. 8
Earlier this year, Walmart launched their “Store No. 8” outpost in Silicon Valley, designed to accelerate their digital efforts by tapping into the talent and culture of the Valley. While the name harkens back to their very early attempts to innovate the store experience, this new initiative is heavily influenced by digital: virtual reality, robotics, and machine learning. Target is also getting into the innovation game, announcing a partnership with the tech accelerator TechStars to help nurture startups that will develop breakthrough technologies blending the digital and physical worlds.
Walmart is betting heavily on their online channel, with several recent acquisitions including Jet.com. And they’re starting to see results, as their online business grew 63% in the first quarter of 2017. Leaders in both companies are trying to find ways to move faster, be more creative, and solution-oriented by building separate organizations. But is this the best way to do it? Having the digital business units remain as separate and distinct entities could create separate and distinct cultures that would be noticed by the consumer, thus risking the brand’s authenticity. The head of Walmart’s eCommerce operations, Marc Lore, states that “Every day, I become more and more convinced about the omnichannel advantage.” One could argue, that to create an authentic, seamless, consumer experience, the company itself needs to maintain a culture that supports this, as opposed to creating division.
What may be lost in these innovation efforts is the consumer. If the desired end state is integrated, omnichannel capabilities, then do the existence of separate organizations help or hurt the cause? There is a risk that by doing so they create a technology-led rather than consumer-led approach to innovation. Having a consumer-driven, consumer-first culture is paramount to achieving breakthrough changes that will create competitive differentiation.
The leadership challenge going forward for all brands is to figure out how best to integrate their eCommerce teams with the rest of the organization. They can do this by aligning all groups around a set of consumer-first principles that guide their decisions and actions. Managing organizations through dramatic change is about defining a clear vision, mission, and strategy that achieves organizational alignment.
Delivering an unmatched experience by understanding—at a granular level—the needs, wants, desires, and aspirations of your consumers is your purpose. Omnichannel excellence will enable your brand to develop the emotional connection with the consumer that drives loyalty and, ultimately, successful business results. The fact is, you must commit to the former to achieve the latter.
Everyone in your organization must take an authentic consumer-centric approach to their individual roles, versus the traditional way of doing things. To set the tone, and to make it easier for team members to understand what a winning omnichannel culture looks like, utilize a simple message that all teams can easily rally around:
“It’s Just Commerce!”
About the author: Matt Gutermuth was the CEO of Safeway.com and later served as a senior executive at Winn Dixie and Sysco. He is the founder of G7 Leadership, inspiring others to be great leaders by sharing 25+ years of leadership experience helping others navigate change, and is also the co-founder of Empower: Technology Positive, bringing technology solutions to the food industry to enable improved performance.
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