In this final blog in the series, I introduce you to a consumer you may not have fully considered, and I give some thoughts on how to engage.
I kicked off this blog series with my first post about how the grocery retail profession needs to embrace change, let go of old indicators and embrace new measures of success. In part two, I got into how today’s customers are “Omni-Expectant,” assuming seamless multi-touchpoints as table stakes for retailers who want a share of their collective wallet. In this final blog in the series, I introduce you to a consumer you may not have fully considered, and I give some thoughts on how to engage. Finally, I cover something that—while not new wisdom by any means—is a dictum we can all live by: ask for help when you need it.
Meet the new “consumer”
As the intelligent kitchen comes on board, this becomes a more certain reality. The machines (fridge) monitors supplies, ordering when necessary. Add in the Siris and Alexas of this world, and you may take the “consumer” out of these decisions for low-involvement goods, and the machine will buy what you have initially set it to, or the best value. We might very well be taking the word “consumer” out of the “consumer decision-making process.” Retailers will want to also play in this space.
So, it’s not really about basket size, it is about household interactions (not even consumer ones!). How much of the household consumer goods purchasing do we have? Are we in all possible channels and how are we doing in them? If it remains just an in-store KPI, then you are only looking at the current state of play. And if disruption has taught us anything, it is that that will not be the future.
So how do we prepare for this as retailers?
Let me return to the client who asked me this question in the first place. It is about getting to know as much about your customers as possible today. Big data, predictive analysis and customer modeling is the fuel for the growth engine of the future. It surprises (and shocks) me how little retailers do with the data they capture on their customers and transactions. Any analysis that is done tends to be quite two-dimensional, basic stuff. We need to get a lot better, and faster.
Retailers are really good at the operations side of things. It shouldn’t surprise any of us, after all retail is an operations business. Stores, products, logistics, warehousing, supply chain, planograms. It is all about moving the little boxes from the truck through to the cart. But then it would seem retailers take the foot off the pedal. I would argue that we have only half the job done. Understanding consumers, shoppers, consumption patterns, buying behaviors, the wider needs and how the products we sell fit into these … that is where the true opportunities for growth lie.
Know when to ask for help
I was making this point to a retail CEO a while back and his counter-argument was “I agree but we are not experts at that. We are experts at moving the ‘little boxes.’” It was an honest reply and the corresponding answer was also as simple. Bring in the expertise. Retailers need to get more serious about the partnerships they develop with hardware and software providers, consultants and providers. No one is expecting retailers to suddenly become technology or big data experts, but an out-sourced investment would seem necessary. If the data that a retailer is collecting today is mostly sitting in a silo somewhere, gathering dust, it is like driving a Ferrari through city streets. It is nice to look at but ultimately a waste of potential.
So, UHIs – unique household interactions (It’s too clumsy an acronym to catch on, I’ll have to come up with something sexier). The idea has some value. Retailers need to plug themselves more into what consumers are doing, how they are likely to fulfil their needs in the future, and therefore how they can stay more relevant.
Basket Size as a KPI certainly doesn’t do that.
We’ll continue this line of thought around new ways to understand the ever-changing behaviors of our customers and how to exceed their expectations.
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