Last week I had the chance to sit down with Retail expert David Edwards, If you don’t know David he lives and breaths Retail and especially the connection between manufacturers and retail.
My generation, Generation X (and this is a sweeping generalisation), had their brand loyalty driven by their parents. For example, my parents used Persil washing power and Colgate Toothpaste and as I grew up with these brands the assumption was that I would use these products too. The problem for retailers and the manufacturers of products such as Persil and Colgate is that we don’t do that anymore. Certainly Millennials and Generation Z certainly don’t connect to brands just because their parents used them.
In fact, younger (than me) people are starting to connect with micro brands that are able to position purpose as part of the brand promise. For example, eco-friendly, vegan, plastic reduction, etc
A great example is Ape Foods which is one of these new incubator / micro brands that positions themselves as “young”, “exciting”, “good for you” and “good for the environment”. So what? In a retail store there is only so much shelf space and therefore when products like this are introduced, the existing brands get squeezed. The older brands are then seen as “old”, “boring”, “bad for you”.
Other products that have squeezed existing categories are sun cream for children or totally new categories have been created, for example, protein drinks and food.
These incubator brands are also far better at using content and social media, rather than the older brands. Add to that, that the old methods of retail were based on you as a supplier paying the retailer to talk to shoppers. Now, manufacturers can and do speak direct to the public, side-stepping the retailer. And of course as a manufacturer you would want to talk to customers as you can control the message. The issue impacting Retail is that in the past the manufacturer had to pay the retailer to promote.
For example, you go into a store and at the end of the isle is a promotion of your products. In the past, you paid the retailer for your products to be shown prominently in the store. Now micro brands are speaking directly to consumers on social media. They are promoting direct to the consumer missing-out on the store and the consumers are buying direct. Or they walk straight into a store and buy the product without the microbrand needing to buy promotion space. Again squeezing established brands.
So is Social Media making an impact on retail and consumers? You bet!
The Future of Retail?
The End of “Big Box” Retail
David predicts that Retail will change radically. The days of the “Big Box Shifter” is over. That commercial model was having a large store, stack it with as much as you could and pretty much make 10% margin on the goods. If you go into big box stores now you will notice that they don’t now use all the store. We all now buy TVs, Hi-Fi, Food on-line, so why do we need to drive to these big stores. Examples of this are Walmart have pulled out of the UK selling Asda to J. Sainsbury, Toy-R-Us has gone bankrupt, In a recent Business Insider article
Ishan Goel, a 19-year-old marketing strategist with the Mark Cuban Companies, said Gen Z perceives these stores like JCPenney, Sears, and KMart as lacking quality and a voice. With nobody watching or listening to advertisements anymore and with the GDPR legislation, the only place to go is to go where your customers are, which is on social.
I Want My Products To Come to Me.
The other change that we have seen is the extension to the delivery model that Amazon have excelled at, which means “everything is delivered”, even food. Here in London we have Deliveroo Ubereats (Uber using it’s platform and transport network)and in Canada there is
Restaurants are seeing a drop in footfall, which is being picked up by delivery services. For any young entrepreneur out there a delivery service has to be a disruptive service to provide. Of course, these are all delivered through mobile, through an app. I’ve used all of them and I love the way that it shows you, through geo-positioning where the delivery person is so I can get the plates warm and the table laid.
Artificial Intelligence (AI).
There is also the power of AI and devices such as Amazon Echo (which I own) and Google Home. We already use the Alexa app to manage our shopping list, surely it cannot be long before Amazon deliver it for me, cutting out all the major grocery retailers.
The “High Street” of the Future
Back to my conversation with David Edwards, David says that out of town stores (or shopping Malls as they call them in the US) will dwindle and die. We will either buy stuff off the internet or through apps like this described above. Retail stores will survive, there are certain brands and experiences that we will still want to travel and buy, where as transitional products will be purchased through mobile.
David predicts that we will go “full circle” with the high street. We used to walk into a shop, the shop keeper would know us, we walk up to a counter and ask for the item one to one. Rather than walking around isle after isle of things we don’t want. Shops will be smaller, grocer stores, will be for “top up” items.
What Has This Got to Do with Social Selling?
Our view, as is Deb Calvert’s view which she describes in her book “Stop Selling and Start Leading: How to Make Extraordinary Sales Happen” is that B2B buyers will bring their B2C experiences and customer experience expectation to the B2B buying process.
We already see this with the number of B2B buyers “shopping” on-line for products and services, most likely in “salesperson avoidance” mode and want to transact, even for pretty large value products online. We often write about an “Enterprise Strength” accounting package that we are aware a person wanted to buy online, without a sales person.
How You As A B2B Organisation Can Stay Relevant!
There are a number of things as an organisation you need to do (and obviously we can help 🙂 ) getting your C-Suite aligned with the whole social thing, “socialising” the whole of your business. From Marketing, Sales (Social Selling), through to Human Resources (HR), Procurement, Supply Chain etc. This is more than just “employee advocacy” which is a tactical program. This is treating social as a strategic program. No worries about budget as you can self finance. What do we mean by this? If you start with the C-Suite and Sales, the additional revenue you generate you re-invest in the business.
Finally, as a business you should also check out intent data, which as a business will enable you to move up the buying process, so you are closer to a purchase initiation, rather than waiting for somebody to come to your website. If you are a Microsoft Dynamics customers then you already have the software, I bet you are paying for it, but not using it. If you are another CRM vendor then it’s worth looking at the options. Here again, this should be self financing, getting and closing business before you competition, should finance this project.
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