I'm a big Warren Buffett fan, he has an exceptional ability to find and invest in companies that have grown and grown. Often referred to as the "Sage of Omaha", Buffett is renowned for his insights on business and investment. Retail is a business that Buffett categorises as being tough. In 1995 he stated:
"Retailing is a tough business… In part, this is because a retailer must stay smart, day after day. Your competitor is always copying and then topping whatever you do. Shoppers are meanwhile beckoned in every conceivable way to try a stream of new merchants. In retailing, to coast is to fail."Buffett is right; retailing is damn tough. If you get your product, promotion or experience wrong you could end up as tomorrow's headline news (and not in a good way). Sometimes it may not even be your fault. If Nintendo and Sony's latest handheld consoles hadn't been such a flop, perhaps Game retail stores could have limped on for another year without administration.
Get it right once businesses are the ones to invest in. Buffett described this type of organisation:
"In contrast to this have-to-be-smart-every-day business, there is what I call the have-to-be-smart-once business. For example, if you were smart enough to buy a network TV station very early in the game, you could put in a shiftless and backward nephew to run things, and the business would still do well for decades."Have to be smart once.
Retailers need to reinvent customer experience for the omnichannel age. Today's consumer is already used to multiscreen, on-demand services. I can rent a movie through my X-box whilst catching up with friends on Facebook and ordering a pizza by phone.
We're not talking about tomorrow's consumer anymore; this is here and now.
The be-smart-once decision for retailers is how they design and engineer the right omnichannel customer experience . This comes down to store design, product selection, content, staffing, processes and technology.
Digital has a large part to play in the modern retail environment and these are some of my favourites:
- BIG data - single view of customer activity is essential to deliver good customer service, personalised comms and experience refinements
- Personalised experiences - you may have 10 million customers, but they want to be treated as individuals. Marketing should follow this new maxim
- Mobile - both for the customer and your customer facing team
- Interactive displays - engaging, interesting and all part of the modern in-store experience
- Near field communications - I used to have to sign for purchases. Then I used chip and pin. Now I just wave my wallet over the card reader. What will be next?
In 1995 Warren Buffet was right; retailing was a have-to-be-smart-every-day industry. In 2012, companies can create significant competitive advantage and protection by making one-smart-choice regarding their omnichannel customer experience.