Giuseppe Stigliano

General Manager

Wunderman Thompson Italy

Giuseppe.Stigliano@jwt.com

Retail 4.0

10 rules for surviving the digital shopping era

Our world is changing at the speed of an algorithm. Many industries have been disrupted by new business models enabled by digital technology. This is causing a fundamental shift in the way retailers conduct business. More stores closed their doors last year than in any previous year. In parallel, once-pure-digital players like Amazon and Alibaba entered the physical space.

Physical retailers need to figure out ways to operate more efficiently and transform the customer experience. They need to deeply understand the customer journey of the different personas that they serve and optimize both online and “on-land”, understanding the role of each and every touchpoint.

Retail has become a highly complex category, including big-box stores, online giants, specialty players, theme parks, airports, banks, grocery stores, coffee shops and an array of B2B companies undergoing “B2C-ification”.

All these players are experiencing some form of digital transformation, and different business models lead to different approaches. However, every company that deals with the end customer should pay attention to some guiding principles that can help them successfully navigate this paradigm shift.

1. Be Invisible

Technology is only good as its application. The idea of putting a technology before the purpose it is intended to serve constitutes a short-sighted approach aimed more at obtaining a cosmetic solution than a true innovation. The main aim should always be to simplify people’s lives, hiding technological complexity and reducing any cognitive effort.

2. Be Seamless

There’s no longer any difference between a “customer” and a “digital customer”. As a result, all touchpoints must be seamlessly combined within a unified omnichannel ecosystem with a unified approach to customer experience.

3. Be a Destination

The role of brick-and-mortar stores must evolve. Today’s shoppers expect a leisurely, recreational, or informative experience when visiting a shop. The store must therefore evolve into a “point of experience” – a place they want to visit, rather than one they have to visit.

4. Be Loyal

This means establishing, cultivating and maintaining a relationship of reciprocal loyalty with everyone who comes into contact with a business, whether a customer, staff member or supplier. Loyalty programs should evolve from a mere “earn-and-burn” process into an ecosystem of valuable experiences provided by the retailer, in order to nurture the bond and the affinity between customers and brands.

5. Be Personal

People tend to be less willing to consider brands, products and services that do not meet their expectations. Retailers should mix customization (the possibility for the client to select a specific combination from among a given number of alternatives) with personalization (the use of data to anticipate their preferences).

6. Be a Curator

We live in a world of virtually infinite choice. Brick-and-mortar stores can’t compete with e-commerce in terms of assortment. However, physical merchants have the opportunity to become “curators”. That is to say that the merchant’s traditional selection, assortment, and sales skills must be supplemented with all those necessary create an emotional connection and give added value to the purchase experience.

7. Be Human

With the rise of “digital”, the human factor will likely to represent the main competitive advantage in many sectors. It means considering three different “human” dimensions: customer experience (human-centered design), community (stores as meeting places), sustainability (ensure that the use of resources, the investment plan, and the orientation of the technological development are in harmony with the world and the development of future generations).

8. Be Boundless

This means definitively overcoming the idea that stores are bounded by walls and situated in a specific location. Technological development and progress in logistics allow companies to serve customers in an ultra-flexible manner. We are seeing a number of different formats, including temporary stores, moving stores and a plethora of delivery options such as click-and-collect, click-and-try, click-and-reserve, click-and-commute, click-and-subscribe.

9. Be Exponential

Consumers appreciate brands and retailers who are capable of constantly fine-tuning their offer through a mix of technology, services, products and experiences. Retailers should consider open innovation, in order to augment their value proposition, by teaming up with different third parties including startups, universities, business partners, customers and even competitors.

10. Be Brave

In today’s world, change is the only constant, and playing it safe is the riskiest thing you can do. Instead, established companies should adopt a more flexible approach to innovation. A good option to consider is the lean startup process, which favors experimentation over excessively elaborate planning, and focuses upon consumer needs and feedback rather than the intuition or creative flair of the manager (who nevertheless remains extremely important).

The 10 Guiding Principles have been developed by Philip Kotler and Giuseppe Stigliano. For a more complete discussion of this topic, please refer to the book we have

recently published - Retail 4.0 | 10 Regole per l’Era Digitale (Mondadori, 2018, Italian edition). The English version of the book will be published later in 2019 as Retail 4.0 | 10 Guiding Principles for the Digital Age.