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Introducing Ian Shepherd.
In this episode of To Affinity & Beyond, our CCO Peter Denby chatted to Ian Shepherd, a former executive with major brands including Sky, Game Group and Odeon & UCI Cinemas.
Ian’s now a retail-focused non-executive director and chair and advisor to retailers, investors and startups. He’s a keen writer, with two published books to his name, plus a weekly newsletter.
Peter and Ian explored how retail is changing; common archetypes; and the importance of retailers understanding and delivering on their value proposition.
The data age.
Retailers are awash with data – from units sold, to footfall and basket size.
However, the data collected by retailers often isn’t customer related so they may not understand:
- How many customers do they have?
- How much do customers spend e.g. on a monthly basis?
- How long have individual customers been loyal?
This is critical for going onto answer questions such as: who’s buying what, and which customer segments are the most valuable?
Retail is changing.
Let’s think about the changing retail landscape from the perspective of consumers. The growth of the internet and the rise of the smartphone have hugely affected the way we shop.
Rewind 20-30 years and the customer journey was very different. For example: if you wanted to buy a fridge, you’d visit a local white goods retailer, armed with a tape measure and notepad. If you were particularly determined to find the best deal, you’d visit another white goods retailer for a price comparison. In the end, though, you’d buy the fridge from one of the two retailers.
This demonstrates the once distributive value-add of a retailer. The art of retailing was fundamentally (a) buying products from a wholesale or manufacturer, and (b) merchandising them in store for consumers to buy.
These days, it’s quite different. Consumers in the market for a fridge have the world in their pocket. They can easily check online for every specification, every price point and every customer review for every fridge.
And that can’t help but change, fundamentally, what it means to be a retailer. The distributive role of retail is now more complicated – consumers are less likely to buy something from a retailer because you have it and they’re in your store.
Of course, there are pockets of retail where this doesn’t hold true – let’s take the classic example of a bar of chocolate at a motorway service station. Customers want the chocolate now; they don’t want it delivered to their home tomorrow. Clearly, then, there are still retail scenarios where the distributive element still plays a role.
Why should I buy from you?
Critically, retailers need to answer: why should customers buy from you?
Consumers have hundreds of alternatives. They can instantly price compare whilst standing in your store. They can order products for home delivery within minutes. Why should they buy a product from you; right here, right now?
To answer this strategic question, retailers need to understand the archetype(s) they operate in, such as:
- Curator, i.e. a retailer who curates a collection of great products that work well together. This type of retailer skilfully merchandises its range and understands its target audience.
- Expert retailers advise on specialist products, such as electronics or sports. This retailer helps customers navigate a myriad of technologies, brands, and technical language.
- Customer experience. The retailer delivers an experience around the products offered.
- Personalisation, i.e. a retailer who provides personalised experiences – for example, through an app with customised offers.
- Convenience – everything consumers need is in one place: avoiding the friction cost of buying individual products directly from brands.
None of these archetypes are binary – in fact, a retailer can exist across multiple archetypes. For example, a cycling shop is more than an expert, as it also curates a range of the best available products.
Retailers don’t have a divine right to exist.
“Why should I buy from you?” is a dividing line between retailers who are congruent with their answer to that question – and those who aren’t.
If you’re clear about why consumers should buy from you, do you actually deliver on that value proposition? For example, if you’re an expert retailer, are you investing in training for new and existing employees?
It’s all about the customer journey – from why they should buy from you, through to how you can make that proposition real and apparent for customers.
As a retail business, everything is centred around the products you range; the way you design your stores; the colleagues you hire; the investments you make in employee training, and everything else that goes hand-in-hand with it.
The corrosive power of intertia.
As the retail market changes, retailers can’t become complacent.
Consumers have countless alternatives. The challenge is for retailers to understand whether customers shop with you consciously, because you deliver value, or whether they return out of inertia, because they haven’t yet noticed an alternative.
Retailers are still on a journey to take data and insight, land it, then tangibly answer the question “Why should I buy from you?”. Check out Ian Shepherd’s writing (links below) or get in touch to unlock the value of your data.
Resource one: Moving Tribes newsletter – https://movingtribes.substack.com/
Resource two: Reinventing Retail, Ian Shepherd – https://www.amazon.co.uk/Reinventing-Retail-rules-drive-profits/dp/1292270772
Resource three: The Average is Always Wrong, Ian Shepherd – https://www.amazon.co.uk/Average-Always-Wrong-real-world-business/dp/0857198122/
Resource four: On Kirkcaldy High Street, Ian Shepherd – http://www.movingtribes.com/2019/12/29/on-kirkcaldy-high-street/