Companies
Companies

Put the consumer back in the centre of commerce

by Michael Smollan. Put the customer back at the centre of everything or fail, like so many local and international brands are doing.

by Michael Smollan. We all keep talking about the acceleration of trends brought on by COVID-19, but mostly without acknowledgement for any downside. There have been many positives, such as shifting to more purpose-driven business models and advancements in the development and adoption of omnichannel capabilities. However, the push towards digital in both communication and commerce has resulted in one major downside – the further fragmentation of an already disjointed consumer experience. And understandably so.

In the chaos of the world today it’s difficult to know what to focus on. Which elements to pick out of commerce and channel strategies – social, D2C, physical. Where to spend advertising budget – above, below or through the line? Who to choose as the right influencer and which damned platform to prioritise? All this fragmentation has resulted in a lot of noise and poorer consumer experiences. When things are so complex, I usually find the best approach is to simplify them into one or two real focus areas and double down on those. This focus is directed by the critical understanding of what the consumer wants, how, when, and where they want it. However, we have over-indexed focus on logistics, supply chain, business models and tech and lost sight of the North star in the middle of the commerce ecosystem: the consumer.

A common adage is that it is six to seven times more expensive to acquire a new customer than it is to keep a current one. Add to that a slow-to-no-growth economic climate and a progressively less loyal consumer, and you’d think retention strategies and customer experience (CX) would be even more important. Yet, many physical retailers seem to have long forgotten about ‘customer lifetime value’ in the pursuit of efficiencies and new capabilities. Although, one must question whether digital is doing it any better.

I have stress-tested pretty much every ecommerce offering across South Africa (and probably a significant portion of Europe and North America) throughout lockdown; and from what I have seen, one single sufficiently negative interaction can result in a site and brand I will never buy from again. The stakes at each touchpoint in digital are higher, with fewer fail-safes to counteract negative experiences, and the ability to ‘walk away’ with the click of a button. Let me give you a few examples:

  • Shopping at the widely hyped Bathu shoes, I ordered the wrong size. Five emails to customer service, two LinkedIn messages to their founder, three tweets for help and still I could not exchange the shoes for the right size.
  • Woolworths Click and Collect was a concoction of wrong goods, missed goods and a refund that took weeks, tweets, and calls to process.
  • The experience of the newly launched Zara Home South Africa was tarnished right at the beginning, as I cannot even begin to explain how many times the system ‘lost’ my order, and drove me mad for a week just simply trying to ‘check out’ the items in my basket.
  • Lastly and most frustrating of all was Sportsman’s Warehouse. They have done a fantastic job to all but cement themselves in their category in physical retail – in fact I frequent their stores fairly regularly and I play nothing near professional sport. However, they took weeks to deliver incorrect items and half the items were out of stock because the order had been in progress for so long.

The reason I call out these brands is not to shame or to belittle. There are so many pitfalls in this part of commerce – it’s incredibly difficult to get the inventory, supply chain and execution all seamless in the way the shopper wants and expects; let alone the reverse logistics. Even Nike hasn’t cracked this locally yet. However, I do not believe that many of these brands and retailers are, as Jeff Bezos keeps preaching, “obsessed with the customer”. Amazon may have extremely deep pockets and the scale and infrastructure to rival a multitude of competitor’s combined, but in addition, Amazon does, and always has had, a clear centre point to their strategy – their consumers and their core competencies. Obviously, investment is required to build digital and omni-channel capabilities to remain competitive in the world today, but we somehow need to find the balance between building capabilities without compromising on the basics. Amplify lost patronage by the lifetime value of a consumer’s purchases by hundreds, thousands, and millions of people, and suddenly the cost scales beyond the size of the opportunity.

When the world becomes complex, doubling down on the consumer is the one thing you can bank on as a good long-term play. Rather do less with more impact. That is how you build a Disney, a Netflix, or a Nike. Ask Apple. Apple are the kings of thinking so deeply about the consumer that they anticipate our needs before we know them ourselves. Then they beautifully package and sell them simply, clearly and with consistency across considered touchpoints in the shopper journey. They turn transactions into consumers and ultimately, lifelong evangelicals.

The fact is, we are pushed to test and try and search for ‘new’ every minute of the day. The only way to keep people coming back is to make sure they have an excellent experience. The first time and every time.

 

Michael Smollan is Chief Growth & Innovation Officer of Smollan. Smollan is a leading retail solutions company that delivers growth for retailers and brand owners across five continents by covering every aspect of how their brand is managed at the point of purchase, from field sales to in store and digitally. Smollan partners with brand owners and retailers to deliver accelerated growth by increasing reach, driving availability and visibility, increasing efficiency and delivering superior shopper experiences; operating across emerging and developed markets, in modern and general trade, and across physical and digital channels.

 

– Receive the Retailing Africa newsletter every Wednesday • Subscribe here.