Consulting

In Search of Retail Relevance

In Search of Retail Relevance

Our Mission—Should We Choose to Accept It

Retailers are in an epic battle for attention. 

As social media companies wield their weapons of mass distraction, consumers are deluged by a barrage of competing messages and time sucks. The long tail of product choice offers great advantages but also sows confusion. 24/7 access and other ways that shopping friction has been eroded further contributes to an ‘everything, all at once’ sense of overwhelm.

[dramatic voice over] In a world where there is so much information, so much choice, so much abundance, it’s never been more important for retailers to be the compelling signal amid all the noise, to deliver powerful differentiation and intense customer relevance.

Boosting Your Signal

It’s hardly news that to the hyper-scalers go most of the retail spoils. In the United States just three retailers – Walmart, Amazon, and Costco – accounted for more than 50% of last year’s incremental revenue growth (and even more of the profits). It may be tempting to go after the largest addressable market, but trying to out Amazon Amazon, or out Walmart Walmart will not end well.

Instead, we must carefully pick the places where we choose to compete, and then deliver far greater value than our customer’s next best choice. 

“Editing to amplify” is often our best chance to stand out in a crowded marketplace where the big guys often have overwhelming scale and scope. The first step is to narrow our focus by aiming better on the customer segments we wish  to emphasize and on the purchase occasions we elect to serve. The critical next step is to aim higher in the value we deliver. Dimensions of value may include a highly curated and unique product assortment, an inspiring environment, amazing customer service, and more.

This is, of course, at the heart of great specialty retailing. Eataly doesn’t try to be a mass supermarket. It edits down the entire grocery sector to focus on Italophiles and then offers a broad and deep assortment of products that a narrow set of customers will love. RH doesn’t sell a wide range of styles and price points but edits against price and aesthetic to become the “must-visit” store for a small (but high-spending) set of target customers.

When we edit to amplify there is little question as to who the store is for and what makes the brand remarkable. The relevance shines through.

The Personalization Imperative

To break through the clutter and engage customers in profound ways, more and more we must know them, show them we know them, and show them we value them.

Of course, this was the essence of what made the shopkeepers of old so successful. Before the computer age successful “mom and pops” employed a CRM system that mostly consisted of a good memory and maybe a well-worn notebook. Today the world is quite clearly very different, but the goal of delivering as close to a one-to-one experience as we can remains.

Years ago, personalization – or its close cousin “mass customization” — was a nice to have. Today, if we can’t deliver highly relevant and differentiated experiences to our customers, we will likely be ignored, significantly decreasing our odds of making the sale and ultimately cultivating a profitable and loyal relationship.

The good news is that technology advances, particularly recent advances in AI, have made this much more doable and cost-effective. The less good news is that it isn’t always so easy to forge a way forward. 

Yet with consumers demanding more and more – and competition getting better and better — defending the status quo is likely to guarantee an outcome that no one will be happy about.

To win the future, we must be tenacious in our search for relevance and, once we find our direction, be ready to step on the gas.

For a more fulsome discussion of personalization check out my recent webinar, as well as this article by my friends at Wizeline.


Posted by on January 30, 2025