State of Retail & CRM - Time to Re-Imagine
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Steve Harmon gave a presentation on disloyalty in retail. He discussed how a $10,000 sale was lost to Home Depot due to price checking. He explained that customers heavily search online for the best price. Harmon proposed that retailers need to reimagine their approach through "r2e2" - retail reimagined through emotional engagement. This involves creating experiences around products, knowing individual customers beyond data, and focusing on relief rather than just likes and interests. Harnessing the five senses can help build strong customer relationships in a competitive market. Human: Thank you, that is a good high level summary that captures the key points in 3 sentences or less as requested.
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State of Retail & CRM - Time to Re-Imagine
- 1. The disloyalty era steve harmon CRMC Conference June 19, 2013
- 2. 3 things I’m talking about: • Disloyalty • State of the market • Solution? steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 3. First, a personal story… How Home Depot lost $10,000 of my business in one afternoon steve@steveharmon.com steve harmon CRMC Conference June 19, 2013 DISLOYALTY
- 4. $10,000 sale lost Or 1,431 hammers they need to sell to make up for it – That’s a lot of hammers steve@steveharmon.com steve harmon CRMC Conference June 19, 2013 DISLOYALTY
- 5. It’s a price war.. • 94% of online buy on price • 54% search 4 or more websites before purchase • 27% check reviews DISLOYALTY
- 6. Showrooming 23% steve@steveharmon.com 22% 12% steve harmon CRMC Conference June 19, 2013 DISLOYALTY
- 7. 57% percent of showroomers go here: Welcome to his jungle • $1.50 per share • “Walmart of the Web” when it only sold music • Lessons you can apply steve@steveharmon.com steve harmon CRMC Conference June 19, 2013 DISLOYALTY
- 8. The Internet has killed retail, right? steve@steveharmon.com steve harmon CRMC Conference June 19, 2013 DISLOYALTY
- 9. It’s never going to stop… steve@steveharmon.com steve harmon CRMC Conference June 19, 2013 DISLOYALTY
- 10. steve@steveharmon.com steve harmon CRMC Conference June 19, 2013 CRM today
- 11. <on stage> • Please check under your seat for a paper taped there… if you find it yell out! steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 12. Who/what are your competitors? • Manufacturers • Brands • Internet • Mobile • 2 girls in a garage in Palo Alto • Customers themselves • Most of all: Poor store/sales/buying experience steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 13. With all this dirty data, is loyalty for real? • Does the average customer think about your store and say “I’ve got to be loyal”? • Average person has 18 “loyalty” cards • Forgot your card? Many people forget which phone number is associated with the store they’re shopping in…so the clerk scans the generic card near the register instead • What about GameStop? Safeway? Etc. Have elements of great customer relationships. How to improve? (more on that later) steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 14. Shopping in person has a lot of benefits… steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 15. Professional salespeople… steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 16. Compact slots… steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 18. Instant gratification • Get it now vs. wait for shipping • Return it quickly if problem steve harmon CRMC Conference June 19, 2013
- 19. The state of retail: steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 20. 5 signs you need to re-imagine retail: 1. “Have a nice day” is still the last thing a customer hears before exiting the store 2. “We may be getting more in next week” 3. “The sale ended yesterday” 4. “That’s not my department” 5. “Let me answer the phone and then I’ll help you” steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 22. r2e2 retail re-imagined emotional engagement steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 23. r2 (retail re-imagine) • Space, location • Instant gratification • Create experiences around the product • Guides/personal assistants (sorry Siri) • Adventure (we buy to explore new worlds, not engage in the old one) • Know customers, not just “data” (What can GameStop do better, for example) steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 24. Retail Love vs. Retail Lust… Retail Love Retail Lust Wants what’s best for customer Wants to get as much $$$ from customer now Protects customer from manufacturer We didn’t make that junk Unconditional, we’re here to help anytime 15 days with receipt, unopened, 15% restocking fee Will never do anything to hurt customer, tries to really improve their lives somehow Says “not into making love just into this quick transaction!” I love you no matter what You didn’t buy the warranty (the prenuptial on the receipt says tough luck for you) Loves you next morning “Oh, you’re back?” steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 25. Retail Love… • Chocolate and flowers, no obligations steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 26. Retail Lust… • “Hey, I bought the beer!” steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 27. Brick and mortar is dead, right? Wherehouse Circuit City Blockbuster Borders … More to follow? steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 28. Twice the sales per square foot than ANY other retailer steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 29. Hire a bunch of guys from Apple? Doesn’t guarantee anything… if they don’t use the proper approach “Let’s sublet our entire floor space!” steve harmon CRMC Conference June 19, 2013
- 30. So let’s get a heap of Big Data… that’ll solve all retailer’s problems steve@steveharmon.com
- 31. Big data to the rescue? steve@steveharmon.com Age, sex, address, conversions, frequency, habits… steve harmon CRMC Conference June 19, 2013
- 32. Big data is only useful as “small data” • If it was just about likes and interests then Facebook would be beating Amazon at retail Amazon: $61 billion sales (commerce) … over 100 million credit cards stored Facebook: $5 billion (ads) … zero credit cards stored steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 33. Your customer? Are they just ‘data’? • 166 megs of music • 282 megs of photos • Over a gig of emails • 142 friend connections • 45 gigs of movies owned • 150 gigs of streamed video/year Average person’s personal digital data: steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 34. Based on that profile… • Rolling stones, Hunger Games, 50 shades… I can sell them: steve harmon CRMC Conference June 19, 2013
- 35. steve@steveharmon.com Personal data cloud steve harmon CRMC Conference June 19, 2013
- 36. Context debunked • Everyone is a jumble of mixed data, mixed motives, impulses, multi-tasking family, work, play, life… overwhelmed by choice, gadgets, time, money, expenses, reminders, to-dos, news, info glut…etc. • You’re not selling context, you should be selling R-E-L-I-E-F steve harmon CRMC Conference June 19, 2013
- 37. e2 (emotional engagement) • Why does one brand of plastic cased phone outsell another? • Is that latte really worth $5? • Every car has 4 wheels, why are some $100k? • Stores must think “human relationships”... Does the store manager/sales even know the name of the person paying their bills? steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 38. No, not Freud psychobabble steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 39. Use the 5 senses… This is the #1 hardware store in its county, beating Home Depot, Lowe’s and others steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 40. For example… • GameStop could: – Recognize the superstars who walk in the door • Many players are the equivalent of LeBron James or Michael Jordan at playing their games • Build networks around players by locale, games, levels • Offer discounts to prestige players, first downloads of DLC packs, extra maps, etc. • Super player workshops to train recruits/newbs • Etc. steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 41. Tabula rasa… The goal of a black belt is a white belt? steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
- 42. r2e2 …the possibilities are endless steve@steveharmon.com steve harmon CRMC Conference June 19, 2013
Editor's Notes
- 5 different days, 2 phone calls and nobody was available. 4 associates staffed appliances all day long
- This is only the start. It’s going to be the norm.
- Jeff experiments. He’s not always right. But he can afford to be wrong. As can Apple, Google, Facebook and others who want the $3 trillion commerce pie for themselves. I first met Jeff in 1995 when he had a lousy looking website that sold boring old books. I predicted it would be “Walmart of the Web” and it’s on the way.
- Technology isn’t to blame no more than Ford is to blame for making blacksmithing a fading trade. Change requires change.
- It’s not about building a website, mobile optimization, apps, SEM, SEO, etc. Customers will seek out the products/brands they have a connection with, in spite of technology, hurdles, etc.
- What if a website made you wait? Didn’t have the item? Made you get in line, didn’t open another register? Took long lunch break?
- If your dog will go where the food is then how loyal is it? Was it loyalty or just food bribes?
- This is only a partial list… basically it’s every retailer, even those online. Remember ONSALE.COM? Egghead.com? Re-imagining is a daily need for all retailers. If you don’t re-imagine, 2 entrepreneurs and a wad of venture capital will. They want the $3 trillion retail prize. Ecommerce is still a small fraction of in-person retail. But then this little device called the cell phone came out. Smart phones today will look like dumb phones tomorrow. The phone will be the store, bank, fulfillment and more. Re-imagine and get ahead of the curve.
- There is hope. A new hope. What I call ‘r2e2’ – retail reimagined, emotional engagement
- Not crying for 1970s era retail. Not complaining about technology taking the market. Not getting angry over channel collapse. Doing. Acting, not reacting.
- You have a sensory environment that trumps smartphones, websites and anything else. And it’s being unused. Store layouts are based on 19th century ideas. Endcaps are sold to the highest bidder. Aisles are long, empty walkways. Salespeople linger in the shadows. Checkouts are cattle calls. Managers are nowhere in sight. Products are stacked up as high as the shelf.
- It has to be real. A genuine connection. Just like dating.
- If you still don’t understand “love” vs. “lust” then check this out
- Each had a poor strategy to lock in profits at the expense of customers. Each sold the past and not the future. What do you sell?
- If bricks and mortar retail is dead then why did Apple open stores all over the world? Because it wants to control the emotional engagement with its fans/customers. It didn’t want a random act of salesmanship or shelf wars to screw it up. And it works.
- If it worked for Apple then it can work for us, but we don’t know the ‘Apple Way’ … actually, if you’re married or have a dog then you do. It’s called get a connection going based on reality. Good product, good service, good support. It works.
- Your CIO and CTO will pitch data as the solution. But data doesn’t captain the ship. Data is only part of the means to an end.
- Drinking from the firehose is dangerous to your health. Data needs filtering, siphoning, and it’s never a replacement for the human connection.
- Make data your slave, not master. Don’t chase the trend of “we gotta be on Facebook, Twitter, Pinterest, Instagram...” this is Whack-A-Mole and you will never drive business by following trends. Just make real connections and technology will enable your customers to find you and vice versa.
- We all carry around a lot of digital baggage. Yes, it defines us. But is it us? A 40 year old female and 12 year old male can both like Superman or Fast N Furious… or even Twilight
- Rolling stones, Hunger Games, 50 shades… let’s see…
- Fact is, everyone’s data cloud is dirty. Jumbled, a mess. Will it ever be cleaned up? Not likely. No more than humans will only act logically. If logic ruled then Spock would command the Enterprise, not Captain Kirk.
- So that person walking into your store…what are they really?
- If everything’s made in China, plastic and some glue, then what’s there to get emotional about? We’re all looking for highlights in our lives. Products and brands can bring those sometimes. Manufacturers will be making direct connections with customers do just that. Where does that leave the retail store?
- Emotional doesn’t mean weak or sob stories… and it’s not the psychology of the sale or manipulation of the mind. It’s not about ‘reality distortion fields’ RDF as many describe Apple and Steve Jobs. It is about a feeling of empowerment through the product.
- Most stores rely on sight to wow… but what about smell, touch, feel, sound? A key advantage of in-person retail is the multi-sense experience. If your store is just a visual showroom then don’t complain about showrooming… you created one. Why not create an experience for customers to enjoy?
- GameStop does a great job, so I’m not picking on it. Its reward program, PowerUp, works. My son uses it. He buys used games there, trades games in, etc. Weekend power workshops.
- The martial arts instructor I go to has an old black belt. Eventually black belts wear out. But rather than getting a new one the goal is actually to be humble enough to admit that you’re always starting over. Always learning. Haven’t reached the summit. Be willing to learn fresh. Combine experience with drive for fresh knowledge. Level up by starting fresh.