Harmonic Retail™ Truth #5

HARMONIC RETAIL â„¢

by

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TRUTH

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The single most important KPI? HINT:

It makes true love last.

TRUTH#

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True Love.

How to make it last.

Relationships are at their best when both parties are committed to the same goal. Outside (and even self-inflicted) pressures and perspectives can easily impact focus and behaviors on the most adoring of couples.

The same is true in retail. The pressures in today’s retail landscape are numerous and they have most brands and retailers working toward conflicting goals with their lifelong partners: their shoppers.

So how do you right the love boat?

IT STARTS WITH PERSPECTIVE

Advances in tech and consumers’ increasing comfort with online shopping have allowed an influx of direct-to-consumer businesses to crowd the retail arena. At the same time, the United States of America is experiencing its lowest population growth since 19371, making tomorrow’s shoppers increasingly scarce. It’s a buyer’s market for the foreseeable future.

EVEN DR. DREW WOULD AGREE

The traditional retail sales model of targeting a key shopper type and tailoring the business around that demographic is unsustainable in a country where population growth is flat and customers have almost unlimited choices available through their smartphones. And yet, investors and shareholders still expect revenue growth every year.

RISE OF A NEW RELATIONSHIP STANDARD

Going forward, one of the best barometers of success for the relationship (and ultimately purchasing preference) between brands and retailers will be how well they keep their existing customers.

Lifetime Customer Value is poised to be the industry’s most important metric.

Companies who can generate long-term loyalty with their customers will see lower operating costs and higher profits than those who focus most of their energy on new shoppers:

Repeat customers spend 68% more with a retailer by year 3. That number goes up to 88% during holidays2

It costs 3 times more to land a new customer than to keep an existing one2

+ Retaining 5% more of your customers equates to a 10% reduction in operating costs and a 25% or more increase

in profit3

One repeat customer equals the

value of five new customers to the seller’s bottom line2

=5+

Like til-death-do-us-part marriages, retailers must put in consistent effort to be responsive to their shoppers. Customer relationships do not demand, but quietly expect their experience with you across digital and physical environments to be harmonic and flexible. Keep your focus on your staff and services, where they have the most value to the customer. Incorporate the right human-centric tech into the store to build an ecosystem that stays in tune with the customer, regardless of how they choose to navigate their unique path to purchase.

Because true love lasts when each partner trusts the other understands his/her/their needs and consistently, proactively creates ways to show it.

SOURCES: 1US Census, 2019.

iQmetrix 2019.

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Harvard Business Review 2018

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DeAnn Campbell VP, Research & Design About DeAnn: With a degree in Architecture and 20+ years of experience in retail strategy, design and implementation, DeAnn’s role is to maintain long-term, forward-looking knowledge of the retail industry to align Harbor’s solutions with the industry landscape, the consumer, our clients’ competitors, and to support and advance client strategic goals. DeAnn has worked with a wide range of global Fortune 500 Brands and retailers, including Unilever, Pfizer, Aramark, IBM, J&J, Canadian Tire, Hudson Bay Co., Loblaws, Walgreens, CVS and more.

You can read DeAnn’s insights and provocative point of view on the future of retail often in Forbes, Retailer Insider, Total Retail, Retail Customer Experience & Internet Retailer.

www.HarborRetail.com

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