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The Retailers Creating ‘The Offer you Can’t Refuse’ for Customers

Retail is always a fascinating industry to watch. It is cutthroat, competitive and fast-moving, and that means it is also often a great showcase for other industries to see how the latest trends in technology are transforming customer expectations.

Over the last decade, the relationships between customers and brands changed dramatically. Technologies such as smartphones, 4G and social media have raised the level of service to the point where speed and convenience have become the minimum standard customers expect.

We now find ourselves at the start of a new wave of customer expectations — one where just transactional convenience is no longer enough to stand out from competitors. The next challenge is for brands to build more of an emotional connection with customers, to become a ‘partner in life’ and to have a real purpose that people value.

To stand out in this new landscape companies are going to have to create what I call ‘The Offer You Can’t Refuse’, and retail is one of the most clear-cut examples of the three values that are the pillars of that concept:

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1. Transactional convenience

The last decade has taught us that the most successful retailers are usually the ones that minimise the amount of time and energy customers need to use in order to purchase what they need. These near-perfect transactional relationships are usually accomplished with a perfect blend of online and offline experiences.

One of my favourite examples are Alibaba’s Hema supermarkets, which create shops, restaurants and distribution centres all rolled into one. In-store, their fantastically frictionless and transparent experience means you scan any item and receive the full backstory about where it was raised and processed. If you eat in their restaurant, you order via your mobile phone and the food is delivered via a robot. As a distribution centre, they focus on their local population so they can guarantee delivery in less than 29 minutes.

The role of voice technology is another interesting development in retail. Walmart partnering with Google Home to provide customers with the ability to shop for more than two million items through voice shopping is a sign of things to come. But as with many innovations, voice offers both an opportunity and a threat — there is a risk that the voice intermediary will take the retailer’s place in the customer relationship, thus becoming a gatekeeper that influences consumers on where to shop, and not necessarily with you!

Perhaps the biggest development for retail will come when they take full advantage of developments in machine learning and combine with voice, image and facial recognition to create a flawless subscription service. Done correctly, the customer can in fact be completely taken out, outsourcing their decision-making to retailers and trusting them to deliver what they need, when they need them. One great example leading the way in this space is the AI-powered organic tampon delivery service, Freda, which syncs deliveries to the user’s menstrual cycle.

Most people believe that this automated commerce approach will only work on low-engagement products like toilet paper or shampoo, but I believe that products such as travel insurance or even clothing will enter the subscription economy at some point.

2. Partner in Life

All retailers have spent the last decade trying to improve convenience to save customers’ time. The next phase will be all about optimising the emotional relationship with the customer — removing the aspects of their lives that give them negative energy and focusing on what gives them positive energy. It’s about enabling the life journey, and not just the customer journey.

For retailers, this next phase might entail looking beyond their own industry to connect with those that are most important for the well-being and happiness of their customers.

One great example of this is retailers crossing over into the health sector. Traditional clinics offered less convenient opening hours and sometimes locations, so it made sense for the likes of Walgreens, Target, Kroger and Walmart to offer this type of retail clinic service to help their customers. Similarly, UK retailer Tesco partnering with Jamie Oliver to stimulate people to eat in a more healthy manner helps connect with their well-being and happiness.

And it is not just health. Clothing retailer Matches Fashion has a Central London retail space that functions as both a shopping environment and an art gallery or venue, connecting with the things that make customers happy.

Sometimes, however, being a partner in life ‘just’ means offering the very cheapest prices so that less fortunate customers still have enough money to invest in the more fun parts of life. It is a big reason behind the success of value champions like Aldi, Lidl, Costco, T.J. Maxx and Primark.

3. Saving the world

Last but not least, customers increasingly expect retailers to act sustainably and ethically, and do business in a way that matches their personal values.

The pandemic brought many examples to the fore. French sporting goods retailer Decathlon converted its Easybreath snorkeling face mask into an emergency ventilator mask. Or LVMH, the parent company of luxury retailers Christian Dior, Guerlain and Givenchy, which helped French health authorities by manufacturing hand sanitizer and providing it to them for free. Jack Ma, the billionaire founder of Chinese ecommerce giant Alibaba, donated 1.1 million testing kits, six million masks and 60,000 protective suits and face shields to the African continent.

Sometimes ‘saving the world’ is also about making sure employees have a better life. Walmart, for example, is known for investing a lot in employee pay, parental leave benefits, education, affordable fitness subscriptions and even aiding employees with adoption costs. Brazilian retail chain Magazin Luiza launched a free telephone line enabling people to denounce cases of domestic violence or violence against women after an employee was murdered by her husband.

But it’s also about showing respect for the needs of demographics that tend to be overlooked. Alibaba’s ecommerce site Taobao introduced an app for the aging population that has the usual functions like access to Tmall Supermarket, livestreaming programs and shopping recommendations, but it also allows them to communicate with family members via a click-and-chat option.

We have also seen many retailers launch initiatives to combat climate change and pollution. The retail supply chain generates a lot of carbon and greenhouse gas emissions, which are on average four times greater than the emissions resulting from a company’s direct operations. So it’s good to see, for instance, that three of the top 20 retail companies — Target, Tesco and CVS Health — are joining Walmart in collecting data from suppliers, seeking ways to cut carbon emissions throughout the supply chain, while many others are increasingly moving to reusable, recyclable or compostable materials.

Perhaps one of the most interesting development in this “saving the world” pillar, however, is how retailers are starting to battle the challenges that come with overconsumption. Rent the Runway is a designer dress and accessory retailer that has become one of the first to normalise apparel rental. IKEA too is running initiatives designed to support the move toward a circular business model, in line with its ambition to become a climate positive business by 2030.

Retail is facing a challenging time, but if your company can respond cleverly to the emergence of these three drivers, you will have the opportunity to develop a stronger relationship with your customers and create ‘The Offer You Can’t Refuse.’


Steven van Belleghem is one of the world’s leading thought leaders, speakers and authors on customer engagement. His new book, The Offer You Can’t Refuse is out now

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