Retailers going bankrupt and why every company is a digital experience company
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With more than 20 retail companies filing for bankruptcy since the start of 2017, including giants like Sears, Toys R Us and Gymboree, soon every company will have to become a digital experience company.
The other day my wife texted me the news: Gymboree is filing for chapter 11. Having two wonderful kids in our family, we’ve bought quite a bit from them over the years and the experience and quality of their products has always been pretty great, so the news hit me kind of hard. But then I got another text message literally a few minutes later. This time from Amazon.com, confirming that the purchase I made last night, from my phone while on the couch watching an NBA game (during ads of course), would be delivered by the time I got home from work. Sweet!
It got me thinking – it is pretty incredible that this level of service isn’t even news-worthy anymore. And while I obviously personally enjoy it, we have all gotten so used to the convenience of it that we hardly stop to consider it anymore. It is, quite frankly, expected and this expectation is having ramifications within retail.
According to this Reuters article from November 2018, “…more than 20 U.S. retailers have filed for bankruptcy since the beginning of 2017, as e-commerce giants such as Amazon.com surged in popularity. Sears Holdings Corp filed for bankruptcy in October, while Toys R Us Inc decided to close down earlier this year.” It’s truly amazing and a little sad, but is also part of business evolution. Many of these firms have tried really, really hard to keep their business running.
Among many other things, they invested in their customers’ experience. You can read Gymboree’s CEO’s letter which emphasizes: Our entire team has strived to deliver the best customer experiences.
But while offering a great CX is definitely linked to improved business metrics, it’s simply not enough. Software has been eating the world for almost a decade now, and I feel it’s just the tip of the iceberg for online commerce. I’ll take it a step further: Every company will soon be a Digital Experience company. Brands will need to compete not just in the still relatively new digital space, but also crush it in such a way that the experience they deliver, both off and online, will need to turn visitors into buyers and then into their biggest marketers. That’s just the way things will work, and it’ll be a standard.
Here’s what Doug Hope, RetailX Show Director, has to say about the state of Retail today: “The scale and speed of change in today’s e-commerce market is well beyond the scope that most predicted or imagined. The on/off-line behavior of today’s shopper and the expectations of shopper experience have increasingly pushed the envelope at a time where virtually all e-retailers are realizing that the retail model continues to evolve. Consumers are shopping differently. BOPIS (buy online, pick up in-store), subscription e-commerce and other shopping options are causing the once-siloed worlds of physical retail and e-commerce to overlap. Retailers are rapidly evolving their e-commerce efforts and striving to create an integrated physical and digital presence. With this giant shift in the traditional retail model, it’s especially important for retailers in every market to access cutting-edge e-commerce solutions if they want to survive, and grow.”
As part of that focus on cutting-edge e-commerce, brands need to design amazing User Experiences for their digital channels (like websites and mobile apps) if they want to convince people to buy, as well as continuously measure the quality of their customers’ experiences if they want them coming back. As they design and develop digital applications, they’ll need to test those experiences and gather user feedback in order to manage them properly.
In the world of the Enterprise, this often means changing the way Product Design and Development teams work, such as embedding user research within their design sprints. It’s not an easy task, specially if you’re not agile and nimble. But that’s just the way business is today: Feedback oriented design. Customers first mentality. No excuses. And by the way, in case the C-suite is not aware, investing in great UX Design focused on the end user pays off in a big way.
Think about it: Once 5G and AI hit mainstream, every little aspect of the customer journey will be digitized and customized. Brands will need to invest in building amazing personalized relationships and customer interactions. You simply won’t get away with bad service anymore.
Are brands ready for this? They will need to earn trust from consumers in totally different ways. No more BS or getting by on cool ads alone. There will be new models popping up. For example, I’m curious to know more about the world of ‘Personal Commerce’ and how it’ll impact retail and ecommerce. In Personal Commerce, brands and retailers embrace a new retail channel, one fueled by individuals who are experts at driving sales through personalized product recommendations. People buying from people, in other words, and not directly from the brand.
Will we see more of this and other models emphasizing consumer trust and convenience in the future? Regardless of the model, I bet for sure it’ll be absolutely imperative to understand the end users and consumers to the very detail.
One thing is for certain: A lot needs to change in the retail experience, as well as in other verticals (airlines anyone?), and not every business is ready to go through it and thrive. To be perfectly honest, I’m not exactly sure why those 20+ companies have gone bankrupt as there are an unknown amount of variables that factor into the equation. But here’s an article on why retailers are going bankrupt and how the pressure from online competition is fierce. I know for certain many have not been able to successfully undergo the digital transformation required to compete in this mega competitive marketplace. I also know that those who make it a priority to deliver killer UX and CX will have a higher chance to succeed.
I know… all this is nothing really new, right? So why am I writing about it? Because I think there’s still lots to learn and I’d like to emphasize the fact that every company will eventually need to be a Digital Experience company.
