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Your New Role in the Community — Retailers as Change Enablers

This article is part of our Retail Reloaded series. The series offers a new vision for retail businesses through an evolved use of technology with the focus on specific ideas you can implement now to not only survive this crisis but emerge as a winner.

Our hypothesis supports three core strategic actions. SAVE, ACCELERATE, and SHARE which will guide you on both how to best use technology and where a retail business should be developing new capabilities, new skills, and, importantly, a new vision for the future.

In this article, as part of the SHARE strategy, we are thinking about the new modalities of customer relationships with retail brands. We will focus on the question: What can a brand do for a customer today?

Customer relationship, experience, engagement, satisfaction… There are many terms for all those things retailers do to make customers love and remember their brand.

Technological developments and innovations from other industries have driven retailers to come up with new and improved experiences to address the needs of modern shoppers. In today’s non-stop streaming and connected world, sharing is the new currency. Just addressing visible and expressed customer needs is no longer enough.

To assume a new role in the community, a brand must act as an enabler. An enabler of sharing, interactions, and, increasingly, emerging themes such as social impact.

Many brands have figured out the name of the game. Through their support and sponsorship of socially or environmentally sound initiatives, they enable shoppers to support the social movements they care about through the conscious purchasing decisions they make.

This is the next generation of shopping—shopping with an impact.

The whole world is one community. How you treat your front-line workers in Bangladesh today, may affect how your shoppers perceive your brand in London tomorrow. There are no more secrets and smart retailers are keeping their cards open. Businesses are held accountable for how they think, operate, treat their employees, advertise, and produce.

New generations, led by Millennials and Zs which now constitute the majority of the world population, are soon to take control of the world’s shopping power (according to Bloomberg, Generation Z reached 32 percent of the global population in 2019—or 2.47 billion of the 7.7 billion people on Earth—surpassing the Millennials and Baby Boomers, respectively). They are shifting trends towards more responsible consumption and more transparent and connected world in which the brands care about the people and the planet, not just their profits. This voice is enabled and amplified by their use of technology.

Already, in so many ways, the voice of these new generations is being heard and the wind of change is whispering that tectonic changes in the way we shop and live are about to happen.

Your new role as the enabler of sharing

Sharing is the new currency.

Today, everyone is a brand. Your customers are each their own personal brand. As an enabler of sharing, your brand elevates this phenomenon and its social clout by representing the values they stand for.

How does this work?

As a retailer, you enable customers to grow and “to live their best life”, because of what you stand for, how you communicate your values, how you teach them things or how you make them feel when they wear or use your products. This is largely a visual movement. The questions you ask:

How does my product become a part of their story? Do I have a story to share? How relatable it is?

Community building is about stimulating the sharing of knowledge, lifestyle, ideas, beliefs, passions, hobbies, fashion outfits, cooking recipes, vacation dreams—the stuff that relates to your brand and makes your customers feel like they belong to your community.

Let’s look into a few cases.

Identity Matching

Farfetch, one of the biggest online luxury goods marketplaces in the world with more than 2 million active users.

Their mission and their brand identity sit well with a 21st-century luxury goods shopper:

  • empowering individuality

And their Positively Farfetch platform exemplifies their mission to become the global platform for good in luxury fashion:

  • promoting sustainable fashion trends (selling and promoting pre-owned items).

They recently sponsored the report and a tool for tracking fashion footprint which they made available for free to all their fashion geeks who are environmentalists at heart. The tool aims to help consumers understand how their pre-owned and conscious fashion choices impact the planet.

“Existing data shows that luxury resale represents a $24 billion market that is growing four times faster than the primary luxury market, partly due to consumer interest in sustainable fashion, but data on resale’s environmental impact is limited,” said Thomas Berry, Director of Sustainable Business, Farfetch. “Farfetch has been selling a curated selection of pre-owned and vintage fashion online since 2010, and in 2019 launched two services offering customers the ability to sell or donate their pre-owned items. We wanted to better understand the environmental benefits of all these models as we continue to focus on projects to enable us and our partners to reduce environmental impacts.”

By putting their money where their mouth is, they have enabled the shoppers to shop more consciously, thus building trust and creating a stronger bond with the brand.

Influencers & Micro-influencers

Everybody influences everybody. Depending on the size, the product and the domain of a retail business, companies may choose different influencers to showcase and promote their products.

In some cases, influencers become a personal brand of such magnitude that they start their own retail businesses.

We witnessed the explosion of Kylie Jenner’s cosmetics business, bringing her the title of the world’s youngest billionaire, largely through her social media influence. By building her personal brand, this 22-year-old has crushed some of the longer-standing competitors and secured a marketplace among this digitally native customer.

Smaller retail brands have explored different tactics. One of the interesting strategies is to find everyday people with a large following and who promote similar values to your brand. Then, to offer them an elevated brand experience, discounts, or free service in exchange for social sharing and tagging.

By establishing this network of brand advocates, with a clear sharing infrastructure, message, and brand guidelines, smaller retailers can achieve wonders for their brand. Many are stimulating customer reviews on Amazon and other websites by offering discounts, gift cards, or shopping credit.

Sharing within Communities

Through branded tags on social media platforms, companies are enabling consumers to join in the digital community of brand followers and showcase their personal use of the product in a real-life situation. The experience of wearing, consuming, or using the product is shared first-hand so that other potential customers can make decisions based on real feedback from people like themselves.

Peer reviews have always been the most trusted source of information when buying products online.

Transparency is a must. It is not recommended that retailers delete all negative reviews or ugly photos tagged by customers. Negative reviews bring credibility to the source. Consumers are well aware that products have good and bad sides. It is much better to let them weight and decide whether they can compromise with the downsides than bear the cost of returned products and disappointed/lost customers.

Your new role as the enabler of interactions

Increasingly brands are looking to stimulate interactions between their community to create value.

This value can be captured through the use of platforms in retail. User interaction is at the heart of a platform’s value creation. Core interaction is made possible by active users, a value unit (often a product or service) and a powerful filter (allowing signals rather than noise to emerge). Further interaction is soon added once the core interaction is successful. Once at a criticial mass, the platform model allows value to scale at unbeatable economics, often catapulting the platform owner to global attention.

To enable interactions, a platform must first enable easy sharing of data and code. Integrations are at the core of platform growth. How easily can vendors and producers use the platform? How well does it connect businesses and customers?

Where there are many different players, there must be rules to keep the offer unified and easy to navigate. This is the curation side of a platform, the filter. What does a platform sell? What are the rules for selling on it? How does a vendor present their offer?

In the case of Farfetch, the luxury goods platform we mentioned earlier, the curation has three use cases for luxury fashion brands as vendors and luxury fashion consumers:

  • Solving specific technical challenges for luxury brands and providing them with shopper community.

  • Access to an extensive range of luxury fashion for consumers.

  • Curating data signals around the luxury fashion customer.

The biggest competitive advantage of Farfetch is that it has more than 2 million active customers, who on average spend more on its marketplace in comparison to other online platforms.

Also, by having a mixture of established and independent brands on its platform, the company collects valuable industry data, which helps it to better predict the behavior of its customers and maximize the return for its vendors.

Your new role as the enabler of social and environmental impact

As mentioned earlier, the role of the retailer has shifted from just being a seller of products to becoming an enabler of positive change. We talk more about this concept in another of our articles.

One of the crucial competitive advantages in today’s world of abundance is no longer only whether your product has quality and satisfies a need anymore (there are thousands of similar and possibly better products on the market), it is increasingly what your brand stands for and supports.

Brands are sometimes hesitant to be open about their principles and values, but the Internet generations expect transparency and make it clear that values, properly articulated, can serve as powerful motivation to adopt a brand.

In the U.S., for example, the #BLM movement saw a crowd campaign to support black-owned businesses as well as white-owned businesses that had supported the #BLM movement. As a result, many black-owned businesses saw a significant surge in sales and growth in popularity.

Similarly, the behavior of businesses during the COVID-19 crisis has had a significant impact on the community and their buying decisions. Retailers who went a step further not just to protect their customers while they’re shopping but offering them additional support in the form of financial, materials or resources, will be remembered and embraced. Conversely, those that appeared exploitative face a backlash.

The COVID crisis was also a chance for small and local businesses to emerge as winners where the large providers failed due to their inability to adapt to the new market conditions quickly. In many cases, their logistics crashed because of the unexpected rise in the demand for delivery and the lack of workforce to do the job. Increasingly, many customers are favouring smaller, local stores over the larger format as we experience the reopening.

The role of technology in your positive impact

Measuring how much social or environmental change an organization generates through its activities is as important as the actual investment in these activities. The integrity of the process is bolstered by a clear impact-driven, stakeholder-focused strategy.

Setting transparent goals and measurements for your sustainability and social initiatives helps the entire company stay aware, engaged and committed. Since you cannot manage what you do not measure, establishing baseline metrics will help track the effectiveness of your sustainability initiatives. There are many tools that will help you measure and manage this impact, whilst building your own can also be a viable strategy.

Sustainability is one of the biggest global topics in 2020 and beyond. Companies face the challenge of transforming themselves and one of these change drivers will be for them to have less negative and, rather, more positive impact on society and environment. Our client VERSO helps companies to simplify and run their CSR Management with their app and integrated consulting. The easy-to-use-tool helps organizations plan and manage CSR actions and data in the cloud, create online sustainability profiles and generate CSR reports to share with stakeholders. We‘re happy to support VERSO in their app development and hope that it will help many more companies in their sustainability management.

In another partnership with a German company, Sustainabill, HTEC developed a cloud platform that helps organizations track their entire supply chain based on input and data from suppliers and sub-suppliers. The tool addresses the most important aspects of a supply chain, such as sustainable sourcing, carbon emissions, human rights, supply chain resilience and audit and certificate management.

Sustanabill has attracted a good number of European companies—among which the largest German online fashion retailer, Zalando—and is aiming to unite the world in a battle for greater supply chain transparency.

And when it comes to waste management, companies across industries are adopting IoT and machine learning to reach new levels in their ability to track, manage and optimize power and water consumption. Many are aiming to reduce the negative impact on their ecosystems by making automation a key strategic goal.

Your business can map out various sustainability certifications to pursue. In the U.S., states like California and Florida have established tax and grant benefits for companies that commit to green standards, for example the B Corporation type. Europe is a world leader in sustainability. Many EU countries offer substantial stimulation and government grants to support the growing trend of committing to harnessing the power of green energy and socially-good businesses.

As both CSR and sustainable businesses continue to evolve, these initiatives are evolving into more than just a nice to have—they are becoming the expected norm for the customer. 2020 may be a watershed year where such activity has moved beyond a moral duty to a necessity in order to sustain the bottom line.

With today’s cloud technology and availability of out-of-the-box tools, however, you don’t have to be a large corporation to take advantage of your new role in the community. You can, indeed must start acting as an enabler of a positive change. With a strong digital presence, the use of technology to amplify your voice, and a commitment to share, you will reap sizable rewards.

In our next article, we discuss the opportunities and risks of system integrations. Something that every future-sane retailer of today needs to think about if they intend to succeed in graduating from omnichannel to responsive retailing.

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Jovana Milankovic Osterday

Writer

Hi, I'm JoJo, a San Francisco based writer and a digital world explorer at HTEC Group. I write about humanity in the age of disruption through the stories of exceptional people, truly innovative practices and companies that are challenging the status quo. At HTEC, we call this "The art of possible".