(The following article is property of Avenue Code, LLC, and was originally published with permission at TotalRetail on August 9, 2019.)
Retail strategist Carl Boutet discusses the cultural and technological transformations retailers must make to create personalization and consistency across physical and digital platforms.
Avenue Code: Tell us about your career path and what led you to retail.
Carl Boutet: My formal retail career path started while I was at university working for the head office of Canadian Tire, then for a marketing agency. That was followed by my true “retail schooling.” For nearly 10 years, I was in the trenches opening and running my own shops inside Costco for Costco Canada in 65 locations, where I implemented a new wave of retail business with the advent of mobile phones and other telecommunication and technology products.
From there, I began my journey of strategy consulting. I spent over six years with a co-op of over 600 Canadian independent retailers in home furnishings, appliances, and electronics. More recently, I founded StudioRx, a retail strategy and technology advisory collective that goes beyond advising retailers to include Cloudraker/Altavia marketing group, McGill University’s Bensadoun School of Retail Management, several data and analytic technology companies, trade associations, startups, and innovation and research labs.
I stepped away at times to work in design, technology, and project management, but the energy in retail is addictive and always pulled me back. What you do to engage consumers is critical, and there’s almost always instant gratification because the feedback loop is fast. You know immediately how your strategies are effective/ineffective, and can use that information to adapt for the next consumer.
I’m not saying you should look at immediate results only — it’s important to have a longer horizon view too — but it’s a rare industry where you get such immediacy. That said, the amount of continuous change in consumer/retailer engagement makes strategizing highly complex.
AC: You’ve spoken a lot about blurring the lines between physical and digital commerce. What prompted this line of thought?
CB: Previously, there were a lot of silos between the digital team, the merchandising team, the operations team, etc. It’s become more and more apparent that this nonharmonized view is detrimental both to the organization and to the consumer.
There’s a tendency to think of physical and digital arenas as separate, but the two increasingly intersect. The digital intersects with the physical (think virtual reality and augmented reality), and the physical intersects with the digital (think of consumers who are on phones while in stores). We can’t think of these as separate channels.
AC: What lessons have retailers learned the hard way?
CB: It’s destructive to treat the same customer differently depending on the channel. Personalization is of course important, and the way you engage should evolve based on the channel, but consistency is absolutely key for brand strength. I’m still the same customer regardless of whether I’m walking through the store or scrolling my phone at home.
Let’s take a practical example to illustrate the downside of personalization for different channels: You buy something online, and when you visit the store shortly after, you see the same item you purchased online, but listed at a lower price. Retailers can refund the item, but this has to happen in-store, which means the customer has to jump through hoops.
AC: What drives new ways of consumer engagement?
CB: Engagement is consumer driven. The elephant in the room is always Amazon.com. It has been disruptive and created havoc, but its customer obsession is clear. Amazon has driven every other retailer to look more carefully at how it treats its customers. Consumers are very generous in giving retailers a lot of valuable data, and retailers should be giving back something that’s more meaningful.
A good first step would be getting away from generic marketing. Retailers are targeting huge, cookie cutter demographics like “millennial” when they should be targeting “Anna.” We have the technology to do this, so the fact that we aren’t just reflects laziness.
AC: What’s the blocker? If we have the technology, why aren’t retailers doing this?
CB: The blocker is often cultural, as it requires the data science team, the merchandising team, the customer care team, the marketing team, etc., to work very closely together. This is where the idea of silos is destructive — there’s a culture of finger pointing where nobody takes responsibility. You can ramp up server speed way faster than you can ramp up culture. The notorious “digital transformation” era we’re in is really more about cultural transformation than technical transformation because companies can’t embrace new technology without embracing cultural change.
Beyond company culture, tech needs to be developed that has a longer line of sight about consumer behavior than the typical CRM. There’s also a talent issue — retailers are really fighting to find talent, and this isn’t easy, especially at scale.
Another blocker is financial. The suggestions above require big investments, and the return on investment path isn’t always as clear as executives would like it to be. There’s a fear of failure in most traditional retail environments that isn’t conducive to innovation. If we don’t see ROI quickly, we get nervous and pull the plug.
AC: What are the biggest challenges for enterprise companies?
CB: Speed and urgency. Companies say they can’t move fast enough, but they simply can’t wait until something is perfect to roll it out. They need to make releases faster and iterate from there. This doesn’t necessarily mean rolling something out to 5,000 stores at the same time, but it does mean doing concept stores. This is why there’s retail research and innovation at McGill. Having a longer horizon view works where there are iterative strategies.
Having an iterative mentality isn't always easy. Many firms are focused on tactics and strategy, not operations, though retailers like Walmart are taking good first steps by making acqui-hires like Jet.com and Art.com.
AC: What are the blind spots for retailers when they consider cultural change?
CB: We need to broaden our focus beyond transactional data to include contextual consumer data. This goes back to my frustration around placing consumers in demographic buckets. Even a single consumer changes over time and won’t want to buy the same things he or she bought two years or even six months prior. Companies should be paying attention to behavioral and contextual clues.
For example, if you buy a guitar on Amazon, you’ll receive recommendations for guitar strings and picks, whereas if you buy a guitar on AliExpress, you’ll get recommendations for local guitar teachers. Retailers need to think about physical and digital, product and experience all at the same time.
We also have to redefine retail to include elements of hospitality, entertainment and community, all in a single brand experience, like Nike partnering shoe buyers with local running clubs, or the Yorkdale Mall’s Restoration Hardware store that’s also a restaurant. These are opportunities to engage and grow brand appreciation. Any retailer can do that in a cost-conscious way if it's creative.
AC: We hear a lot about creating a consistent brand presence across multiple physical/digital channels, but what I still see missing is a truly seamless, agnostic experience that would take you from your desktop to your mobile device to your physical location. I keep hearing whispers about this, but nothing substantive is in place yet. What's the hurdle retailers are facing to get there?
CB: It’s a huge challenge to get brands to play nicely together because they’re naturally competitive, but it’s slowly happening. I was recently riding Lyft, and my driver asked about the purpose of my trip. I was going to the Eaton Center in Toronto, and my driver mapped out a curated route through the mall to match my goals. Lyft was obviously partnering with the mall operator!
Partnerships are growing, but the challenge comes when you try to integrate platforms. We’re not quite at the point where we can integrate apps for Lyft, Nike, Starbucks, and so on. We’ve got a lot of vision. Now we need the execution. It’s an exciting time to be in digital transformation — retailers are ready to work!
AC: Thanks for your insight on the cultural and technological changes companies must adopt in order to thrive as consumer-driven retail continues to evolve!
Anna Vander Wall
Anna Vander Wall is a freelance senior editor and writer in the tech industry and beyond. She particularly enjoys collaborating with Avenue Code’s talented Snippets contributors and whitepaper authors.