January 30, 2018
What all brands can learn from retail’s shakeup
In a recent Fast Company article, The Future of Retail in the Age of Amazon, reporter Austin Carr writes about how stores, both digital and physical, are having a hard time competing, leading some retailers to rethink their business models. Retailers that used to try to compete head-to-head with their more innovative competitors are now realizing they need to compete where their competitors can’t. One particular quote grabbed my attention:
The idea that everybody needs to be terrified of Amazon is completely wrong, says Brian Spaly, who cofounded two e-commerce-centric startups, Bonobos (menswear) and Trunk Club (a wardrobe-in-a-box service), which sold to Walmart and Nordstrom, respectively, for nine-figure sums. Everybody needs to figure out what makes them special and use those weapons to compete.
Dramatic transformation is happening in every industry. If it hasn’t hit yours yet, it will soon. But smart brands, both business-to-business and business-to-consumer, can take lessons from what’s happening in this new Disruption Economy to better position themselves to thrive in their markets.
Focus on what you can win
A brand is a promise: an expectation customers have based on what the brand is uniquely capable of delivering. Figure out what your brand excels at and focus in on that. Many brands fall flat by overextending themselves into areas where they aren’t competitive, a strategy that can lead to a significant loss in brand value, time and capital investment.
Fast Company’s Carr points to Minneapolis-based retailer MartinPatrick3 as a great example of a brand that’s thriving by not trying to be something it’s not. MP3, a luxury men’s shop specializing in apparel, furnishings and interiors, has no e-commerce whatsoever, yet it’s flourishing. MP3 built its reputation and value on the unique shopping experience it delivers through personal, one-on-one interaction. MP3 isn’t competing with Amazon because Amazon can’t provide a personal buying experience, so why encourage customers to shop online?
Always look for ways to make your focus better
Telling customers what they want or should aspire to is no longer a winning strategy. We live in an age where the customer is constantly changing and has a stronger voice than ever. New category disruptors are continuously raising the bar for customer expectations, and today’s customer will easily walk away from a brand if their experience doesn’t match up to those expectations.
A brand’s presumed understanding of the marketplace is not the recipe for success it was just a few years ago. Brands need to invest on an ongoing basis in truly understanding who their customers are, what they want, need and expect, and how that is changing over time.
A great example of a company listening to and adding value for its customers is Airbnb, which recently announced a tool that makes it easier for individuals traveling together to split the cost of a property rental. After seeing customer feedback that flagged the difficulty of doing so, Airbnb responded and improved the quality of the experience.
As our society keeps changing, user experiences will keep getting better and new competitors will continue to disrupt. As these changes occur, perpetually investing in better understanding your audience will keep you ahead of the game.
Disruption across industries and markets will continue to accelerate, with consequences that are both predictable and unforeseen. A refined understanding of your brand’s true strengths and your customers’ needs can provide the compass points for charting your course to success.