At the height of the pandemic, going out to stores became something to be avoided at all costs, and for a time, it looked like retail might never be the same. In this uncertain era, who better than Canada Hall of Legends recipients Morris Saffer and Joe Jackman to discuss the future of the retail landscape in a post-COVID world? AMA Toronto and moderator Michelle Flynn recently held a virtual fireside chat with these two marketing experts, getting their perspectives on digital transformation, the customer journey, and the future of stores, and how all of these have changed – and will continue to change – as we navigate the course towards recovery.
Digital transformation, or “We’re finally getting on with it”
COVID-19 has been a reckoning for digital. Omnichannel is not new: the retail industry has long talked about how wonderful it would be if there could be seamless connections across channels. But it’s only now, after the pandemic, that the entire industry has been forced to adapt to digital. Why is this surprising? As Morris points out, the pandemic didn’t actually change anything in retail, and nothing has happened post-COVID that wasn’t already happening beforehand. Problems existed in spades, and retailers either ignored them or did something about them. Of course, those who ignored them are now getting smashed, and those who did something about them are being repaid handsomely for their efforts. And while some retailers might have struggled to see the value of those investments before the pandemic, it’s certainly obvious now.
“If you don’t make the tough decisions, your business won’t have a future.” – Joe Jackman
Technology creates intimacy: The impact of digital on the customer journey
Not too long ago, marketing consisted of advertising and retail promotional tactics – in Joe’s words, “a couple of blunt instruments.” Few could have imagined the extent to which marketers can create relationships with customers. But as Joe points out, those relationships come with consequences, because customers now have much more power in the equilibrium between producers and consumers. Still, Joe and Morris agree that this is a wonderful time to build brands and market them, with excitement around technology, but they also note that technology isn’t everything, and that in moving forward, we risk losing some of the important elements of retail.
“The reality of retail was always the relationship with the customer.” – Morris Saffer
Developing this idea, Morris notes that retail has always depended on the relationship with the customer. Technology makes it more intimate, but the magic is still in the relationship. And as retailers begin to embrace the tech, success isn’t always dependent on being the biggest. There’s room for being scrappy and innovative, for changing on the fly, and just as in the technology space, the next generation often unlocks better results.
In the new retail landscape, can physical stores survive?
As one of the first marketers to bring the store – the physical space – into the world of brand building, Morris offers important insights. He notes that if stores hadn’t already done the work of branding already, as of March 1, 2020, it was almost too late. But more importantly, branding really means that stores understand their customers, that they understand the relationships. As an example, Morris highlights Amazon, which even 20 years ago was praised by customers as offering the best service. In meeting a need that most people didn’t know they had, two-day delivery revolutionized attitudes about what service was, what it could be.
As for physical stores, Morris is clear that stores aren’t as relevant now as they were 25 years ago, maybe even a year ago. But while there may be fewer stores in the future, there were also too many stores in the past. So, what will happen going forward? Looking at Nike, Joe builds on this point. Surprisingly, rather than closing stores, Nike is opening 150-200 new, smaller footprint stores, stores that will offer a premium experience for customers, and that represent the type of store that today’s customers want to shop at.
“The cycle of retailing just keeps rolling around. As people innovate and create, more interesting retailers will emerge.”
– Morris Saffer
What do customers want? How brands represent value, and values
The fact that people care about the values of the brands they do business with is not new: even before the pandemic, people took an interest in how retailers treated their employees. But what about value, and consumers’ interest in both price and quality? Joe mentions Walmart’s decision to stop selling handguns in its stores as a good example of a brand balancing these two imperatives, and Morris states that brands must have both value and values, albeit with the caveat that no one is going to forgive a brand if workers die producing the goods that they sell.
“Retailer leaders and marketers can’t just sit on the sidelines. We must take a stand. But we also need to be great at the fundamentals of retail, and that includes value.” – Joe Jackman
Joe also believes that we’re now seeing the end of the value economy and the emergence of the values economy, and that in the future, the most successful businesses will be those that are purpose led, that have values they live by, and that demonstrate these in their brand culture. Morris agrees that brands depend on values, which brings ethics into the picture.
We see this already in Nike. They’ve built a successful brand. They are relevant to their customers, and they’ve created an emotional attachment that is real. They’ve succeeded at – to use Joe’s term – the “challenge of retail”: they own the relationship with the customer, and they’ve got the data that lets them give the customer what they want. But Nike also stands out as a brand that has ethics. Nike said Black Lives Matter sooner than politicians, sooner even than the population at large. And to Morris, that’s what branding is: “when you have enough guts, and enough connection with your customers, to know you can ignore the world of political correctness and go for it. That’s a brand.”
In the post-pandemic world, it’s clear that COVID hasn’t killed retail. If anything, it’s made it better: as brands navigate the challenges of today’s retail landscape, they’ll enter tomorrow stronger, healthier and more focused.