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ANew Adaptation


Today’s merchants are well-aware they can’t afford to be perceived as a simple box of stuff sold by promotions, price cuts and coupons. Value is everywhere and the market is saturated with commodities. Americans aren’t shopping any less, but a growing search for meaning with an emphasis on experience is acting as a filter for their choices. Their wants and expectations continue to ratchet up, always-on technology spurs the pace of life, the young act old and the old act young. Retailers must be ready to adapt accordingly.

Retail Learns to Be Human

Today’s powerful consumers demand humanity from their corporate behemoths. The trend toward large, pervasive and impersonal retail spaces has begun to reverse. Mission-driven commerce is thriving. Stores already have more emotion, creativity and community, or at least they are trying. Wal-Mart, the industry barometer, has squeezed all the rapid growth it can out of supply chain innovation and now struggles to make the store experience convey the emotive new slogan, “saving people money so they can live better lives.”

More than ever, shopping is about how it makes you feel. To that end, the perfect store would have an infectious, positive attitude. It would give you the feeling that it enjoys being a store and loves having you there. It would understand that a new possession can take you closer to your dreams and aspirations, distance you from your worries, or help make the world a safer place.

The shift from the physical to the notional is compelling retailers to look at aspects of “who” opposed to “what” they want to be. Brands with genuine character, definitive core values and concern for community will most likely be able to bring their assets to bear under changing circumstances. In terms of “who they are,” there’s plenty of room in the retail landscape for personality improvement. The Home Depot, for example, has proved that arrogant CEOs are bad for business. Personality traits that would have been tolerated in times of lesser choice when customers didn’t talk back are no longer acceptable.

Which retailers have people willingly given a share-of-life to? Two classics leap to mind. Both are sensitive to the earliest signs of change, and understand shoppers insatiable appetite for new forms and experiences. Target and Apple. Store design and product speak to the shopper’s need to feel smart and cool. Transformational daring is part of their DNA, as with Target’s purchase of all the ads in an issue of The New Yorker, and Apple’s big iPhone/AT&T bet, now sending ripples through the marketplace.

The Transformers

The successful transformations we see today have been years in the making. It takes time to become agile and innovative. Improving adaptivity involves the redesign of operational processes, coming up with new business models, experimenting more, assuming additional risk and recruiting talent. Sustained innovation requires hiring innovative people and doing what they ask. Best Buy, a chain that has continually evolved since the mid-80s, is the perfect illustration of these ideals in action. Most retailers simply copy and hope to survive.

Among the more encouraging trends in support of perpetual transformation are signs that short-term thinking is giving way to long-term thinking, by companies as well as consumers. Both are tending to consider the whole vs. the parts. By necessity, instant gratification and immediate results are being tempered by a broader, global view and future security.

Today, no company can be relevant or creative unless the customer is at the center of its universe. Although many claim to be, few retailers are customer-centric. Leadership still lags on knowing who the customers really are and aligning an appropriate strategy. Social sciences, anthropological ethnography and analytic tools can help retailers read and meet customer needs and provide the empathy and insight missing from yesterday’s retail.

Humanness and materiality will be forever entwined—the proposition has just gotten more sophisticated. From now on, retail success will depend on the strength of the emotional benefit the brand has to offer, a benefit that will change as the customer dictates.

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