The three Rs of retail: relevance, relevance, relevance
18 April 2019
The rules have changed and unless you fancy a shot at bankruptcy bingo, stay relevant or stay away, says renowned consumer behaviouralist and Retail Tomorrow keynote speaker Ken Hughes.
Ken Hughes opened the third annual Retail Tomorrow conference with a hard-hitting performance, kicking off with Bankruptcy Bingo, which featured retail brands that have recently gone under in the US and UK.
The unifying factor was relevancy, or rather the lack of it. These companies failed because consumers no longer got them, he asserts. To win, you need to stay relevant.
In fact, relevance became one of the unexpected stand-out themes of this year’s event.
Hughes states that retail, finance and hospitality brands still spend way too much time and money creating of “moments of irrelevance” for no good reason at all. Think hotel rooms that feature multiple network points (who uses network cables?) but don’t have a socket near the bed where most people want to charge their phone or tablet overnight.
And what about YouTube advertising that fails to make reference to the brand it promotes in that crucial five-second window before the user can hit the skip ad button? The traditional narrative arc of a 30- or 60-second commercial begins with an intriguing dramatic proposition that builds into a dramatic representation of brand benefit. But that’s money down the drain if you viewer has buggered off after five seconds.
Relevance means something different today than it did yesterday and what it will mean tomorrow. And, if you’re not relevant, you’re toast.
Ken Hughes at Retail Tomorrow 2019
If you knew it was coming, it wouldn’t be disruptive
Right now, retail is in the grip of what Hughes calls “fantastical transformation”. Disruption is coming from the outside and from the consumer. Take roadside assistance. Uber Fix is about to shake it up in a way that should have the venerable institutions of the AA and the RAC quaking in terror. Uber worked out that 80% of emergency callouts are because motorists are out of petrol, out of battery or have a flat tyre. Focusing on just these three things will enable it to challenge for a huge share of the market and likely succeed because it’s brand promise is to be there faster than any of the established providers.
Managing expectation is a vital part of retail. Love, trust and respect are the core foundations for any relationship, and retailers should remember this. When you let customers down, they can feel like they have been dropped from a relationship, or at the least stood-up. Hughes defines trust in this instance as “belief in the reliability and ability of something”. We want our experiences to be instant, efficient and frictionless but they also need to have a soul or a smile, to engender warmth and connection.
Ever the showman, Hughes treated the audience of top retailers and technology partners to a humorous whistle-stop tour of communication through the ages – and if you haven’t seen him in action, I strongly recommend you register for next year’s event.
But there’s a serious point.
We live in what he refers to as the age of “absolute connection” and there’s a new factor that few have taken into account. We’ve all got a business to business strategy, of course, and a business to consumer strategy naturally, but what about business to machine?
The accelerated evolution of the user interface, from type, to click, to swipe, to speak, means that voice operated devices are the fastest adopted technology ever, and speech is soon going to be the standard user interface. Some 37% of smart speaker users have shopped with it and playing this forward through the lens of relevancy, he asks: “What is your business voice interaction strategy?”. This is the single most important question retail brands need to answer today, he claims.
The AI imperative
Artificial Intelligence is about to reach its retail tipping point. We already live and work in an AI world where hyper-personalisation steers life for you – Netflix for example tells you what to watch. We’re about to see car insurance algorithms that will always get you the best deal and change it as and when something cheaper comes along. So, if you trust it to do your home insurance, and then your holiday insurance…
The winning retail experiences of the future will rely on what Hughes calls “silicon on soul”. Yes, there will be more machine to machine interaction, more automation, but the nature of value we assign to automation is fluid. People generally still choose to use the non-automated passport queue to avoid having to re-queue in the event of a (common) hardware glitch or computer says no scenario, but we’re happy to use the Sainsbury’s terminals if there is a queue.
There are few absolutes in retail. Relevance is one, but its nature is indeed changeable.
If you’d like to know more of the insight and inspiration shared at Retail Tomorrow 2019, take a look at the event summary* we’ve just published.