RETAIL INSIGHTS: Social Selling in a Global Omnichannel World
Continuing Transformation of the Retail Landscape and Social Selling’s Evolution
It is evident that the retail landscape is continuing its full court press toward transformative change. More and more brands and retail companies are shifting their philosophy from ‘Retail Sales’ to ‘Retail-as-a-Service’ and continue to prioritize relationships over transactions.
Although many of the traditional metrics still stand to measure retail sales success (i.e., same store sales vs same period last qtr. / last year, sales per square foot, sell through and incremental growth reflected in all sales modalities), few other metrics have surfaced to measure the impact of customer engagement, brand engagement and experiential sales success across a unified omnichannel experience.
As I discussed in an earlier Part 1 presentation on the same topic, major brand retailers such as Sephora, Ulta Beauty, Bonobos, Burberry, Target, Nike, Niemen Marcus and Nordstrom have all raised their brand engagement strategy to include socially-shareable shopping experiences and experiential customer engagement.
Recently, Nordstrom has financially committed to their vision of creating ‘No-inventory, smaller ‘Nordstrom Local’ stores where emphasis is placed on providing the ‘New Nordstrom’ experience that includes services such as a seamstress, nail salon and a bar.
Abercrombie & Fitch, although announcing many store closures around the country, have pivoted on their strategy to include the launch of smaller stores on college campuses next month under the premise of using them as ‘Learning Labs’ to help them provide insight into operating small spaces within an omnichannel platform. By leveraging new technology and developing an omnichannel integrated brand & customer experience they will have the opportunity to measure and test ‘store-centric experiential marketing’ within their key customer demographic.
Further leading to the reinvention of the Retail Store, companies like Kohl’s for example have created a partnership with Amazon for product returns and experimenting with their physical store presence to enhance the omnichannel customer experience with a focus on convenience.
Another example is J.Crew. They’ve created a strategic partnership with We Work focusing on editorial content and creating community. In an attempt to offset lower sales and to reinvigorate the retail atmosphere with fresh foot traffic, some Retail Stores are repurposing non-value physical space by renting out in-store locations with complimentary partners to drive parallel goals and socially shareable experiences.
One of the largest investments directed to developing a social selling initiative has come from Macy’s with the recent launch of ‘Macy’s Style crew’. Although they have announce closure of many brick & mortar stores, they have redirected some cash, assets and embarked on a strategy to inspire 130,000 existing sales associates and stylists to earn additional income by sharing products with their networks.
Top CEO’s and CMO’s from the retail world are looking across the bridge into the land of direct sales and they are not only borrowing plans from our playbook, they are executing on relative strategies to increase their relevance, competitive posture and drive for market share- all underscored by their desperate will & need to survive.
Consistent growth in ecommerce coupled with the critical realization that customers establish loyalty through customer preference, relevant engagement and seamless brand experience, omnichannel strategy remains the top initiative for growth-oriented companies.
To put things in perspective, we really need to take a look at what we’re up against by taking a holistic view of the sheer size and value of Global Retail vs Global Direct Sales:
The distinction between size, buying power, investing power and market share are evident as we measure ‘Trillions’ vs ‘Billions’. Global Direct Sales accounts for 1% of the global retail market and US Direct Sales, the very thin red slice in the pie chart, accounts for only .002%. This illustration suggests that we are hardly at the center of the Social Selling Universe.
Strategies and Lessons from Amazon & Retail Brands
If we measure global ecommerce sales as a subset of global retail and compare it to the direct sales market footprint, we can clearly see that Global Direct Sales represents 4% while the total US Direct Sales market (the red sliver again) clings to only 1% of market penetration.
Numerous debates, articles and questions have been focused on the threat of Amazon’s dominance and its pressure on direct sales as a viable market category. In this chart, we can see that US ecommerce represents $453B in sales. What isn’t reflected, is that Amazon owns more than $225B of that revenue. We’re talking 50% of total US ecommerce sales!
So what led Amazon to achieve unprecedented market share that empowered it with the currency to not only dominate in the ecommerce space, but has suppressed the growth of big box retailers and extended influence and pressure to market categories in the grocery, food delivery and healthcare space (too name a few)?
A few AMAZONIAN principles:
- Pre-emptively and Proactively meet and exceed customer expectations
- Engage in a constant state of transformation led by customer needs, behaviors and preferences
- Not focusing on the competition. Focus on the customer and the seamless shopping experience
- Leverage deep data assets and innovative technologies
- Capitalize on Simplicity and Automation perpetuated by an ‘Omnichannel First’ methodology
A) Put the customer first. Focus on the customer journey and their seamless experience with your brand. Act upon those elements that are expected and provide answers and solutions pre-emptively. All of these have a direct impact on sales field successes.
Today, customers are much better informed and demanding about what they want to buy, when, where, and at what price. We have to do a better job answering the question: Why should they buy from us?
Excellent Customer Service has always been at the heart of the direct selling culture. There used to be a distinctive difference. Now, the thin veil that separated retail from ecommerce and direct sales has become blurred with the advent of social selling, mobile shopping, AI, IOT and rapidly changing fulfillment options. Regardless of the model, consumers are in the driver’s seat and have the power to dictate their journey.
B) Leverage your most valuable assets: Relationships, Data, Quality, Product Exclusivity & Passion.
C) Ensure cause-related initiatives permeate the life cycle of customer engagement. This is a very important part of your unique Value Proposition.
D) Recognize the important distinction between a ‘Multichannel Approach’ and an ‘Omnichannel Strategy’. Don’t think you’re doing it, Know you are!
One of the challenges, especially when dealing with creative, entrepreneurial leadership and management structures, is the shift of internal culture to consider the enterprise collectively- instead of separate divisions or business units. It is often necessary to consolidate teams to re-focus vision, integrate planning systems and eliminate redundancies. Silos need to be broken and insights need to be shared across the enterprise to capitalize on real-time trends.
Broaden your view when looking for technology solutions. The evolution of social selling and omnichannel experience has taken us far beyond our need to manage genealogy and process commissions. Fully integrated platforms are a big part of achieving the seamless experience and speed to market.
Technology options are more prevalent than before. Because of retail’s dynamic push toward social selling and reinforcement of customer relationships, technology has evolved to meet their needs. Outside-the-Bubble (DS) tech can open a whole new world of possibilities for the innovative direct sales/social commerce company!
To be successful, companies must transform processes, organization and disparate systems into a unified environment that offers customers a seamless shopping experience across channels. It is no wonder, that two of the top strategic initiatives for brands and innovative retail in 2018 are: 1) Customer-centricity and 2) Unified Commerce.
E) Consider strategic partnerships and consolidation to improve upon the customer experience. These possibilities have a direct impact on Loyalty & Trust and the potential to extend your own capabilities (i.e., technology, fulfillment) market and social influence.
Generational Impact on Loyalty, Expectations and Buyer Habits
With regard to customer and consultant behaviors, recognize the impact of the two large consumer segments: Gen Z and Millennials
Understanding and applying Data-driven insights and behavioral drivers of these two segments can help you predict and motivate shopping, engagement, and loyalty-building behaviors. Each generation displays their own unique qualities and subtle differences in their views on shopping and developing Brand Loyalty.
One of the key aspects in considering your opportunity and product positioning is to correlate nuances of ‘Life Stages’ in your strategy. Health & Wellness companies have a natural tendency to address this by offering product categories that match age groups and levels of activity (i.e., balanced nutrition, brain health, disease management, energy & endurance, etc…)
However, the opportunity to gain market share and customer engagement is to introduce products and opportunity offerings during the transition stage, not just during the life stage:
Consumers are loyal to brands if brands in turn, are loyal to them. That means consistency and engaging them on their terms to meet or exceed their expectations. I’ve used an analogy many times with teams and companies to help them elevate their attention to improving upon the positive customer experience.
I call it the ‘American Idol’ philosophy: How many times have we seen or delivered a great experience only to be followed by a mediocre one that almost erases our previous performance?
To remain consistent, we have to conscientiously consider that today’s performance has to be the same or better than the previous one to win the hearts and earn the trust of our customers and consultants. There is NO room for complacency.
Take a look at this chart that illustrates: Retail, Ecommerce & Direct Sales vs Shopping Cart Abandonment:
Consider the Value that Effective Relationships, Loyalty, Trust and Brand Experience would have on Sales Execution, Revenue and Growth. Shopping Cart Abandonment is estimated to be $4 Trillion. Almost double the value of Global ecommerce!
It is one of the least talked about ‘black-hole factors’ that is partially responsible for retail brands’ leverage of social selling characteristics as an extension of their experiential sales & distribution strategy. Increased satisfaction & trust gets you brand loyalty and less abandonment.
A Unified brand and omnichannel experience integrated with a word-of-mouth driven strategy can put a lot of money back into your pocket and into the community. Embracing change and transformation are keys to success and sustainability.
About the Author:
Sebastian Leonardi is founder and president of DSXgroup, LLC. He is a leading consultant and trusted advisor to executive management teams and recognized expert on innovative channel strategy, social commerce and behaviorally-driven conversion-focused programs. Sebastian has significant experience steering vision and leading growth initiatives for organizations focused on capturing triple-digit revenue, market share and profit from domestic and international markets. He has an outstanding record of creating accelerated growth and is an architect of innovative word-of-mouth powered retail strategies engineered to drive sales velocity and niche domination.
As founder of the Associate Network Commerce (ANC) channel strategy and co-founder of Social Marketing Automation (SMA) platforms, Sebastian has implemented innovative solutions for startups, private equity owned companies and multibillion dollar global conglomerates in North America and Europe- adopted by hundreds of thousands of users in 45 countries in over 25 languages.
Sebastian J. Leonardi may be reached at: firstname.lastname@example.org | (855) 379-4771 x. 11