Articles in Harvard Business Review (@HarvardBiz) focus on the reinvention of retail that’s going on right now. “The Future of Shopping” explains that when the dot-com bubble burst 10 years ago, the ensuing collapse wiped out half of all online retailers. Today, e-commerce is well established and much digital retailing is now highly profitable.
As it evolves, digital retailing is quickly morphing into something so different that it requires a new name: omnichannel retailing. The name reflects the fact that retailers will be able to interact with customers through countless channels — websites, physical stores, kiosks, direct mail and catalogs, call centers, social media, mobile devices, gaming consoles, televisions, networked appliances, home services, and more.
If traditional retailers hope to survive, they must embrace omnichannel retailing and also transform the one big feature internet retailers lack — stores — from a liability into an asset. They must turn shopping into an entertaining, exciting, and emotionally engaging experience by skillfully blending the physical with the digital. They must also hire new kinds of talent, move away from outdated measures of success, and become adept at rapid test-and-learn methodologies.
A successful omnichannel strategy should not only guarantee a retailer’s survival — no small matter in today’s environment — but also deliver a revolution in customers’ expectations and experiences.
Read this in full (registration required). See a PDF version here and here.
In “Retail Isn’t Broken. Stores Are,” J.C. Penney CEO Ron Johnson is interviewed:
When Johnson joined Apple, in 2000, as the senior vice president for retail, conventional wisdom held that a computer maker couldn’t sell computers. Johnson promptly tossed out the retailing rule book and built the Apple Store from scratch. “The Apple Store succeeded not because we tweaked the traditional model,” Johnson says. “We reimagined everything.” Today, Apple stores are the highest performing stores in the history of retailing.
In November, Johnson took the reins as CEO of the venerable J.C. Penney department store. Times are tough for many retailers, but Johnson, characteristically, sees the chance to reinvent the department store as a great opportunity. He also understands the challenges ahead. “A store has got to be much more than a place to acquire merchandise,” he says. “It’s got to help people enrich their lives.”
Johnson discusses his vision of the future of retail and shares insights about innovation, leadership, and why he trusts his gut.
Read this in full (registration is required). See a PDF version.
“Know What Your Customers Want Before They Do” says
Shoppers once relied on familiar salespeople to help them find exactly what they wanted—and sometimes to suggest additional items they hadn’t even thought of. But today’s distracted consumers, bombarded with information and options, often struggle to find products or services that meet their needs.
Advances in information technology, data gathering, and analytics are making it possible to deliver something like the personal advice of yesterday’s sales staffs. Using increasingly granular customer data, businesses are starting to create highly customized offers that steer shoppers to the “right” merchandise — at the right moment, at the right price, and in the right channel.
But few companies can do this well. The article demonstrates how retailers can hone their “next best offer” (NBO) capability by breaking the problem into 4 steps: defining objectives, gathering data (about your customers, your products, and the purchase context), analyzing and executing, and learning and evolving. Citing successful strategies in companies such as Tesco, Zappos, Microsoft, and Walmart, they provide a framework for nailing the NBO.
Read this in full (registration required). See a PDF version.
Also see HBR’s portal The Future of Retail.
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