The articles are almost as impossible to miss as the giant “Store Closing” signs plastered on more than 5,000 shops across the globe. Do a quick Google search and you’ll see headlines like “Retailers Are Going Bankrupt at a Record Pace,” “Another Bad Week for Retail,” “2017 Retail Bankruptcies Are Piling Up,” and “There’s No End in Sight.”
We’re just over halfway through 2017 and more than 300 retailers have filed for bankruptcy, up 31 percent from the same time last year. You could point your finger at a recovering economy, make a case against the “distracted consumer” or throw shade at Amazon, but the honest truth is as harsh as the headlines.
It’s not me, it’s you
Struggling retailers only have themselves to blame. If you don’t believe me, take a look at the other side of the story. Amid this “retail apocalypse,” plenty of retailers are thriving. New kids on the block such as Mizzen+Main, Warby Parker and Bonobos are examples of retail rookies who seemingly cannot expand their footprints fast enough.
The “digital vs. traditional” tug-of-war isn’t a war of two evils, it’s a fundamental difference in inherent values. Traditional retailers were literally built from the ground up with the primary focus of selling products at a physical location. Digital retailers figuratively have no walls and focus exclusively on selling experience-driven products, a luxury that traditional retailers didn’t have when they got started. It’s a tale of two strategies and traditional can’t operate on its own anymore. The retail industry is no longer about fulfillment and inventory, it’s about brand immersion and customer experience.
The ‘C’ in experience
A new breed of customer is dictating the current and future playing field for all businesses. They are the “empowered”or “omni” shoppers who demand complete personalization, intimately tailored offers and harmonious interactions every single time their lives intersect with a brand. This kind of experience is no longer only accessible by the incredibly wealthy shopper. This new breed of shoppers favor digitally native brands because they make their lives easier and deliver faster than their traditional counterparts. They’re drawn to services that create convenience and simulate a feeling of exclusivity for the average consumer. It no longer matters if we’re talking digital or brick-and-mortar – it’s all about the experience being offered, not just the product being sold.
At any given time, customers are on a journey with multiple brands across various industries. They tap into different businesses to satisfy different needs because it’s impossible for one solitary brand to fulfill the entirety of consumers’ needs. Through a brand lens, every experience with a customer is viewed as the “customer journey,” but that’s an insular way to look at it. The real customer journey doesn’t start and stop with one brand or one experience with a product — their day is a perpetual series of interactions with different products and brands.
With a little help from seemingly unorthodox friends
Just the other day, I used Amazon Echo as an alarm, ordered my girlfriend birthday flowers from BloomThat, bought a blazer from Nordstrom online, checked into my flight on the Delta app, grabbed a Lyft home from the airport and scheduled a Postmates delivery for dinner. That’s only six of the separate brand experiences across just one of my days. This repetitive cycle of beginning and ending interactions between brands is where the opportunity lies for traditional retailers, and brands in general.
The space between a consumer’s interaction with brands is open season to create what I call an “experience chain.” Creating an experience chain is when brands assess the broader ecosystem in which their customers engage and identify mutually beneficial relationships where shared data and integrations create magical experiences for their shared customers. Whether it’s a product, service, physical presence, digital presence, company image, etc., every brand has something to offer. And it’s not just about brand-to-consumer but what brands can offer other brands.
The experience chain economy
Imagine this: I wake up as my Amazon Echo simultaneously reminds me of my girlfriend’s birthday, asks if I’d like to order flowers and confirms my Blue Apron meal plan. Upon landing at San Francisco International Airport, Delta scans my checked bag on its way onto the baggage belt, which then sends an alert to my Lyft ensuring a car is ready and waiting when I walk through the sliding doors. My driver greets me already knowing from my calendar that my destination is Nordstrom to pick up my blazer. Minutes after I pull up to my place, new coat in hand, Postmates does too with the meal that started being prepared the moment my Lyft ride home started.
The once havoc-filled nightmare full of disjointed brand moments, is now transformed into a rhythmical, dreamlike experience where brands work together to create one complete experience that carries me through my daily journey. This fluid handoff across complementary industries is the beauty of an experience chain, and it’s the future of the experience business. By thinking about partnerships between brands in these terms, traditional retailers don’t have to rebuild their age-old brand from the ground up in order to compete with their digital opponents. This means no more questioning how to adapt to the digital world or how to become “digital first” organizations.
Too good to be true?
This strategy may sound wildly unattainable, but it’s actually closer to reality than fantasy. The key to success lives within the data. When brands decide they’re willing to live in harmony for the good of both themselves and their customers, they need to get on board with sharing select pieces of data with each other. In some cases that might feel like asking Jay Leno to hand over the keys to his garage. It’s a daunting ask, but unlocking the door leads to a wealth of insights that add value to every brand link in the chain. And to make brands’ lives even easier, technology providers with the sole purpose of allowing the retail community to share data already exist.
You can’t spell retail without AI
When the retail industry and artificial intelligence collide, the potential to deliver hyper-personalized customer-brand interactions is virtually boundless. Throw experience chains into the mix and the outcome is a unified, end-to-end experience with the ability to predict what a customer wants without them even having to ask. Technology is getting more intelligent by the minute as they listen to us and learn about our preferences. It’s a beautiful thing…just like my story about Alexa knowing my girlfriend’s birthday and ordering her flowers.
I suppose the headlines are right in a way. The “traditional retail industry” as we know it might be dying off, but a new way of business is emerging. Call it what you want it: retail, e-commerce, omnichannel or all of the above? No matter which way you cut it, a transformation is on the horizon. There’s no one-size-fits-all mold — it will always look different but have the same aim: to deliver superior value to customers. Experience chains between businesses are the catalysts for a new model of collaboration, the pathway to customer success and the future of the experience business.
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