What every crisis reminds us is that those who have not been brave, agile, creative, innovative and fast fall by the wayside. Amazon has been one of the big winners in this crisis. Its share price in March was around 1,600 dollars and as I write this it is already over the 3,500 dollar mark. We are undoubtedly experiencing a forced acceleration of the transformation agenda (digital, cultural, operational) of companies as we recognise the speed with which customers, users and consumers embrace change almost naturally.
All brands have to think, operate and choose whether to adapt or lead in new ways to create value, connect with their customers, positively impact society while motivating, and excite their team during these uncertain and unprecedented circumstances. We will all have to learn, together, with confidence and humility.
The retail world in general, and the world of shopping centres (and all their variants) in particular, are no strangers to this premise. Some choose to continue to blame Amazon for all of retail’s ills; others have chosen to learn and take inspiration from some best practices and evolve. Today, businesses of all sizes and in all sectors are dealing with an ever-increasing speed of change and accelerating an almost unimaginable flow of information, a role that consumers are demanding and which is unprecedented.
From brands to TOTEMS
The most disruptive, admired and loved brands, now TOTEMS, are responding to this new reality by embracing their role as change agents and enlisting their community as brand believers fighting for a cause they believe in. We are looking for those TOTEMS who feel, live and show real meaning to believe in them. They have in their DNA the belief and commitment to improve the world.
The six-foot economy, which is 1.8288 metres, named after the distance between two people to prevent infection, will be the new normal for a while. This will increase costs and decrease the ability to deliver goods and services, which requires a clear company strategy and a change of mindset. The retail industry has bifurcated into “essentials” (grocery, pharmacy and household goods) and “non-essentials” (clothing, home furnishings and shopping centres).
Tepidly and timidly, with a few notable exceptions, most of the industry moved forward with heaviness and fear. I say this not as a spectator, but because we have worked on many of the most successful projects of recent years.
But these are not times to look back, but to keep creating and moving forward. That is why I would like to share with you 6 key areas where retail has the opportunity to emerge stronger from this unprecedented crisis.
Investment in the brand.
Good use of data.
Integration of all channels. Logistics.
New formats and models.
In this post I will concentrate on the first 3 and the next 3 I will share in another post.
Good branding is the main difference between being recognised and going unnoticed. And the difference is now more important than ever because when the Covid-19 crisis finally ends, consumers will not start looking for brands they expect to trust. They will choose brands they already believe they can trust based on previously observed actions. They will not look for new communities of affiliation, but will turn to those they already have faith in and already know align with their social, cultural and emotional worldviews.
Now more than ever.
In an increasingly competitive world, brands have endless creative options to reach their audiences (or new audiences).
As the Covid-19 outbreak wreaks havoc across much of the industry, some are asking an unsettling question: will companies increase their spending on branding in the aftermath of the crisis?
What is strange about this question is the assumption that branding is something that turns on and off, like a light switch. For a long time the industry has confused the concepts of branding and marketing/advertising. They are not the same.
Marketing and advertising is what a brand says about itself to consumers. Advertising is a conscious effort by a brand to promote itself, its products and its services. Advertising can be bought and sold. Advertising is transactional.
Branding, on the other hand, is something very different. Brand is what others feel, think and say about you. And it is based on a wide range of impacts and perceptions, far beyond what a brand says about itself. More important is what a brand actually does or does not do. Brand reflects the sum total of the purpose, the values, of every action of the organisation, in the context of a culture, all of which reveal the true character and personality of a company, or shopping centre or shop. Brand cannot be bought or sold. Brand is transformative.
So the time to focus on branding is not before Covid-19 or after Covid-19 or any future crisis. Your company is already branding itself every minute of every day through every decision you make. Ultimately, brand is not what you say, but who you choose to be.
According to Forrester, shoppers are increasingly evaluating products and brands based on a company’s ethics and values. Consumers are increasingly aware of the ethos behind the companies they buy from.
The most valuable, successful and admired companies in the world have a great brand in common. Many of the most outstanding retail companies have been created by the team at https://totembranding.com with the complicity of clients who, instead of wanting to predict the future, choose to create it.
Because a brand is never an expense, it is always an investment.
Good use of Big Data provides a competitive advantage.
Data science is having a growing impact on business models across all industries, including retail. Knowing what your customer wants, and when, is now within your reach. You can even anticipate what the customer will want. You just need the right strategy, vision, tools and processes.
Customers in this new era are overwhelmingly demanding that companies anticipate their needs, innovate, have the products they want and interact non-intensively with them in real time.
Improving and evolving the customer experience
To meet customer expectations, we work on intelligent systems that start the conversation with customers long before they visit a shop or centre. The relationship transcends the physical space, to become part of the customer’s life. Then yes, once the customer comes to the centre or shop, driven or motivated by our communication, we accompany them by finding the best shopping-leisure-personalised service itineraries and offering the right customer experience according to each customer’s needs. It is no longer possible to think that all customers in the same centre or shop feel or act in the same way. This is an obvious truth, but ignored by most operators.
Well-crafted personalisation will be the new “El Dorado”.
It is not only about making each customer feel unique and special but also about being able to offer incentives at the point of sale with pampering, services, rewards or loyalty promotions.
Taking this to a closer collaboration between operators and tenants, using data in a “smart” way, retailers have the ability to combine the results of customer data with sales data to determine which products sell the most, when and look for correlations to refine, adjust and evolve integrated strategies between shopping centre and shops. This ensures that not only the customer benefits but also the asset owners as well as their tenants. Knowing the shopping habits of customers at each site is something that everyone can achieve. Transforming big data into smart data is something that hardly anyone does properly and therein lies a huge possibility.
Off plus On so as not to be Out.
Social media is not for talking about you, nobody cares about you. But if you interact, dialogue, respond and resolve, then they will start paying attention to you. And as a bonus, you will discover what opportunities and trends you can embrace.
I can say this with full knowledge of the facts, because in some centres where we were able to apply these principles, we managed to position them as the centres with the most and best followers in networks as complicated for retail as Twitter, or as designed for retail as Instagram. If we look at the speed of customer adoption of other networks such as Tik Tok or Pinterest, we will learn that this is not the opinion of an asset manager or a centre director, who probably feel that social networks are a space for freaks.
Not listening to what is being said and shared on social media is wasting a lot of information and many potentially valuable (free) insights that can help you detect areas for improvement both at the level of care, services, operators and future trends.
This social media support uses mainly unstructured data to extract information from social networks and machine learning, to make sense of it, can give the company an edge over the competition. However, it must find the right balance using this type of data to gain customer loyalty while respecting their privacy. What we are seeing is that many customers are more than willing to sacrifice privacy in exchange for tangible benefits.
Everything is branded
A brand is no longer what you say about yourself, but what others say about you. Boosting recommendation engines is a great ally in this age where the average customer checks up to 12 sources of reviews before making a purchase.
Once again, the imperative need for landlords and tenants to change their mentality in order to start working closely, genuinely and committedly together needs to be re-emphasised.
Imagine a common shopping history of a user, where you have access to the items they already have in their shopping cart, the items they have seen or liked in the past and what other customers have seen or bought recently, automatically generate recommendations on other products and allow you to extend the customer’s knowledge from just the shop to the online realm as well.
Implementing machine learning models on historical data can lead to accurate, effective and customisable recommendation plans.
Analysing the purchase trigger
In a recent conversation in a series of interviews called TOTEM Live with major retail benchmarks, one of the major benchmarks in Spain told me many interesting things, but I would like to highlight two:
Most online purchases are preceded by a discovery of a product in a physical store. It is unlikely that many of the products we choose to buy online today would have been discovered without a physical shop and the in-store experience.
Secondly, the model must change. You cannot continue to charge per m2 when many customers come to a centre or shop to discover a product, touch it, try it out, test it and then buy it online.
Analysing how a customer came to make a purchase is another tool that would help to improve relationships between operators and tenants and optimise new contractual arrangements that evolve existing archaic models.
Channels, audiences and opportunities
The rise of multi-channel and omni-channel marketing has created many different paths that customers can take to purchase a product.
Machine learning tools can help understand customers’ buying habits and focus on exactly what works in the real world.
We have also implemented augmented reality projects. In some assets with a high gamification component, in others with an entertainment component and in others with a wow effect, to name a few.
In addition to the physical space, customers could browse the centre with their mobile devices to highlight what they were most interested in and, from there, the brand offered personalised digital content and reviews to inform them of its offerings, activities, brands and services.
In the new normal use image recognition technology, with which customers can scan proposals from the centre and place them virtually in their own home to see how they look and encourage a partner, children or family to go.
Augmented reality has also allowed us to address traffic within the mall and generate additional revenues to those already known.
Towards a new model
We have been discussing the viability of the model for some time. New revenue models, new channels for generating value, new ways to increase profitability, and new opportunities for efficiency, sustainability and sustainability to not only increase turnover but also to improve profitability by managing better.
Data science can also help to optimise property management costs. Analysing data relating to different equipment in a building (preventive maintenance), such as energy management, maintenance and security, can prevent failures and optimise the best use. Implementing machine learning as part of predictive maintenance, in addition to relying on historical data, provides models that improve over time and reduce associated costs. Retailers can also save a lot of money by using data science to analyse their energy consumption. In this context, data science helps us not only to set a budget, but also to look for improvements in particularly energy-intensive properties such as shopping centres.
Innovate or disrupt, that is the question.
Innovation does not demand more data but a new mindset to put it to good use. These innovative uses of data science actually improve customer experience, tenant relationships, increase customer loyalty, improve brand awareness, asset management and have the potential to drive sales. The benefits are many: better risk management, improved performance and the ability to uncover information that might have been hidden.
In addition to physical shops for digital native brands, I could have written about the growing importance of digital advertising, pop-up shops, same day delivery, social shopping, the Amazonisation of part of retail or the evolution of Google Shopping. But I had no more space.
A new chapter
The present does not belong only to the great, but to the fast, the brave, the innovative and those who turn ideas into action. During this crisis, successful brands are reacting successfully while mediocre brands are reacting mediocrely. The crisis has not defined the brands, it has only exposed them.
The post-quarantine consumer in Spain is shopping faster, more efficiently and more securely. But it is still a social animal that wants to see and be seen, get out of the house, live experiences and be part of stories.
Retail is not going to Amazonise, although there are positive lessons to be learned. As technology continues to advance, one thing is certain, courage, agility, creativity, innovation and speed have much to offer in the new world of retail.