Retailers NEED to start thinking like customers

I feel like I’m working in two different worlds, and that eventually they’ll collide. Most of my career has been spent working in, and with, established retail and CPG companies. However, recently I’ve spent a lot of time with a second group. These are startups and tech companies that provide a view of what retail will become — a future where the customer really is in charge.

There has been a lot of focus lately on the re-emergence of stores, especially as online retailers and retail vendors open bricks & mortar shops. This has led many to believe that stores will continue to be the core of retail businesses long into the future. Stores clearly have a continuing role to play. However, I believe that as ecommerce continues to improve (operationally, financially and most importantly in terms of customer experience), stores will be the supporting player to ecommerce in retailing rather than vice versa.

Do customers really want things to change?

The average American spends 45 minutes a day shopping. That’s more than 5 hours a week or more than 270 hours a year. So while your customers may not have called out their desire to spend less time shopping in your market research, there clearly is an opportunity to better serve customers given how time-pressed most people are.

Ecommerce has the potential to seriously reduce the amount of time spent shopping. Saving time is a big part of the reason that Amazon has been so successful. For those of you that haven’t had the full Amazon experience (especially for those of you in Canada where the offering and service aren’t as good as in the US), here’s an example of how convenient it can be. One night last week while cooking dinner I noticed I was running low on a few spices. So while I was waiting for something to boil, I opened up Amazon’s app on my phone and ordered the spices. I also took a few minutes to go around the kitchen and supply closet using Amazon’s barcode scanner to order other items that were running low. No shopping list, no worries about whether the grocery store would have the spices or other items in stock, just a few clicks and it was done.

Not surprisingly Amazon is dominating online sales in the US. That said, while ecommerce is growing significantly, currently only about 8% of US retail sales are done through ecommerce – and the number is even lower in Canada. So there’s a lot of room for growth, particularly as offerings continue to improve, older populations catch up with digital natives’ online buying habits, and Boomers continue to age and become less mobile.

If you’re a Gen X or Boomer and wonder if ecommerce is really ever going to take over, it’s worth noting that 40% of men and 33% of women aged 18-34 say they would ideally “buy everything online” and that countries like the UK and China are already far ahead of us in ecommerce penetration.

To get to an online-first retail world for most shoppers in most categories there need to be changes – including fixing some of the operational basics, resolving shipping challenges, and better ensuring quality (particularly in categories where that is subjective like fresh food). I believe these are challenging issues that are largely addressable, and addressing them will help ecommerce continue to grow. However, what I believe really has the power to shift how we shop – and help save a lot of those 270 hours – are the technology innovations currently underway that will change the way that we find what we’re looking for.

What’s changing?

Today ecommerce basically operates like an online catalogue. It can be clunky and inefficient, and some categories are more difficult to shop than others.

So what could the future look like? Well, your fridge could put together a list of grocery items you need and send it to you to approve before it places an order. Your virtual assistant could pick out some lamps for you to look at and show you a virtual image of each on top of your dresser before you pick one to buy. You could see a briefcase you like, take a picture and then find and order it online.

This may seem very futuristic, but there are technologies that exist and/or are being developed that could make much of this a reality. There are also retailers starting to use these technologies, although generally still in rudimentary ways. These technologies and their applications will continue to evolve. Along with this, there will likely need to be an evolution of data security and privacy rules. However, these types of issues are similar to those encountered with most technology innovations.

Here are a few of the technologies that can help transform the act of buying as well as some examples of where they’re being applied today. Many of these technologies are and/or will be enabled by artificial intelligence.

A big topic of conversation this year has been conversational commerce. This is where a customer uses text (e.g. via messaging apps) or voice (e.g. through smart speakers) to interact with companies and/or buy online. The customer can interact with a person representing the company, a chatbot or a mix of both. If you want to get a sense of what the future of conversational commerce could look like, I suggest you watch this video about China’s WeChat. In fact, if you’re in retail and you don’t know about WeChat, you need to see this! (WeChat video)

If you want to get a bit of hands-on experience with conversational commerce you may want to try PS Dept. It’s a virtual personal shopping service with no upfront fee. I found it to be a big time saver compared to spending time going through retailers’ websites and I received great recommendations from the personal shopper I was texting with. It isn’t real time, but it may shift your thinking about what a good shopping experience could be.

What should you do about this?

If you look at growth projections for ecommerce most show significant but not radical growth over the next number of years. However, many forecasts don’t take into account transformative changes from new technologies. Rather they’re projections made based on current growth trends. As technology media pioneer Kevin Kelly has said “the future happens very slowly and then all at once”. While I wouldn’t call ecommerce growth rates slow, there definitely could be some critical turning points ahead.

So what should you do about this? First off, don’t ignore it because your (future) competitors aren’t ignoring it. Amazon is taking action on many of these fronts, as is Alibaba, and likely some startup that is unknown today and could be your competitor tomorrow. For example, if you’re focused on improving your catalogue based ecommerce site and miss the boat as people move to conversational commerce, that will be a problem. People’s loyalty only goes so far when something much better comes along.

Also, be very clear on what role your stores will play in the future of your business. Increasingly businesses will need to prove to customers that there is a reason they should make the trip to shop in-store. The reasons need to be meaningful for the customer – for example, it’s more convenient for them, they get substantially better quality, it’s more cost effective for them, or it’s more fun for them.

I suggest taking a hard look at what these technologies can offer you, your (future) competitors, and most importantly your customers. Then ensure that you have an integrated strategy and action plan that sets your business up to continue to be relevant to customers in the future. Don’t wait until it’s too late to act!

If you have any questions please feel free to email me directly at



Based in Toronto, serving clients globally.



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