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Why Global Brands Need To Think Locally To Survive The ‘Retail Crisis’

0aaMohannad El-Barachi SweetIQThere’s a huge difference between evolving and dissolving. Sometimes that’s hard to see.

If you’re tuned into the business news at all you’ll notice there is a lot of noise about the brick-and-mortar retail world at its complete meltdown. The theory is this: since consumers prefer to do anything and everything online and via their mobile phones, physical stores will no longer be a relevant part of the consumer journey. If you know me, you know I rarely shy away from presenting a dissenting view — and this is no exception. Retail as we knew it 10 years ago has changed drastically — but to think that brick-and-mortar stores are about to dissolve into the abyss where landlines live is shortsighted.

An article in TechCrunch entitled “The death of retail is greatly exaggerated” invites readers to think critically about the difference between evolution and extinction. It talks about how consumers want something different: “When everyone can get Yeezy’s online, finding a special pair of blaze orange ones made of carbon fiber and Japanese denim that are only available at a tiny shop in Denver, will be the new driving force back to retail. Retail isn’t dying, it’s changing.”

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New consumer behaviors catalyzed by technological developments are forcing retailers to shift their models to match what people want (and expect) from brands: novel experiences that align with consumer’s interests and values. The days of stocking your shop with 100 units of the same product and erecting a billboard on the highway are a thing of the past. But these times have been replaced by the opportunity to create something more interesting and personalized.

Think of the old school local marketing approaches like print ads in a local newspaper and elaborate storefront displays: local marketing isn’t a new concept. The Internet has made the world smaller, and retailers must rethink their local strategy, since the easiest option is not always the shop down the street. However, when you look at the facts and figures, shoppers still want local stores: not only do people rely on their mobile phones by typing in queries with highly specific local intent, they want to feel connected to brands in a more meaningful way.

Critics suggest e-Commerce is eclipsing traditional retail models because it’s “easy”: you decide what you want, you click a button, and then it arrives at your doorstep. This thinking is shortsighted. There are two essential aspects of retail that consumers will never, ever want to say goodbye to: instant gratification and the element of surprise.

The path to find a store or a product has changed, and will continue to change rapidly as AI becomes mainstream. And the expectations from consumers for brands to deliver experiences are increasing daily. But the fact of the matter is, most consumer experiences are, in some way, punctuated by a brick-and-mortar space. Consumers will always need to get something immediately, and they’ll always want the thrill of a brand delivering them something unique and interesting. Start to think differently. Why not differentiate your business by allowing customers to book it or buy it online, then pay for their Uber to come pick it up? When they come to your store, that’s your chance to impress the hell out of them and get them to shop directly in-store next time.

Let’s look at how three globally recognized brands are succeeding by bringing local consumers to their brick-and-mortar locations. Get inspired by what brands are doing to mold their marketing strategy, product focus and consumer experience to the hyperlocal consumer.

Starbucks

Starbucks has around 11,000 stores across the United States, and its aggressive expansion plans in China prove it’s not slowing down anytime soon. What Starbucks has done exceptionally well is catering to the mobile consumer: you can pre-order your beverage of choice en route to the store, and have it ready for pickup when you arrive. This move allowed Starbucks to successfully nip its greatest weakness — long lines! — in the bud while also encouraging hundreds of thousands of app downloads. In the app, customers can get “Stars” — reward points to earn free stuff. You can also pay directly from your mobile phone, and app users get a free drink on their birthday.

By focusing on its local strategy, Starbucks successfully integrated an app that collects data points for its consumers and solves their biggest in-store weakness at the same time.

West Elm

West Elm has tapped into the local idea differently, by expanding its reach in local communities and collaborating with local artists in multiple cities throughout the U.S. through their “Artist Collection” campaign. Shoppers can see the works of community artists in Miami, Austin and more. In the three years that the program has been running, West Elm has collaborated with an impressive 800 local artists to bring their work in-stores. Their blog — Front + Main — has local spotlights on local studios and encourages searchers to travel near and far to check out one-of-a-kind small shops.

It’s a completely different spin that shines a light on small local businesses rather than duking it out with them. West Elm’s local marketing play attracts the “conscious consumer” — that is, the consumer that wants to benefit from bigger store prices and service, all the while staying connected to and supporting their local community.

Sephora

This beauty retailer is far from sinking into the retail panic. As a recent article in the New York Times shows, the brand is transforming its locations into experiential playgrounds, where customers can interact with the products on a “try before you buy” approach. Combining both the thrill of an in-store purchase with the confidence that they’ve made the best choice, Sephora has launched on-location Virtual Assistants. These booths allow shoppers to test different makeup colors by allowing the app to take a picture of them and then “applying” various shades to the image. This use of technology not only draws customers in, but it also builds a return clientele looking to buy the most flattering and best makeup for their skin tone. The brand is leveraging the online interest in tutorials on YouTube, Instagram and Snapchat by engaging those Fashion Bloggers and turning them into brand ambassadors. Sephora is a great example of innovation and creativity to drive the online crowd directly to your brick-and-mortar locations.

The question remains: how do you get to the Starbucks, West Elm and Sephora level of local marketing? Focus on two things: your customer and the data. Technology has drastically changed consumer behavior, but it has also offered businesses the tools to acquire a better understanding as to who their shoppers are. Tap into Big Data and cater offerings and experiences that are compelling to customers, and that give them both an online and an in-store experience.

It is time for innovation and a genuine prioritization of the client to be at the center of all you do. Think about what they want, how they want it and how you can be the one to get it to them. The information age may be changing the retail space — but the potential wins are endless, if you have the right perspective.


 

Mohannad “Mo” El-Barachi, is the General Manager of SweetIQ, which was just acquired by Gannett. He is leading the charge in local marketing by providing actionable recommendations to marketers, helping them increase venue presence, manage brand visibility and drive customer engagement. El-Barachi is an executive, technologist, solutions architect, project manager and developer with diverse experience in the Information Technology sector. He was previously the owner of International Corporation Associates, where he specialized in international business development. In addition, he was the Chief Technologist at Interchange Technologies where he conducted high-level IT consulting, portal and web-application architecture, development and deployment, and complex systems integration.

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