Retailers always seem to be playing “catch-up” when it comes to dealing with the seismic changes that mobile technology continues to generate. Consumers are adapting far more easily than retailers to always-on, always-present devices disrupting the shopping journey. Siloed organizations, legacy technology and outdated thinking are holding many retail organizations back.
Stephan Schambach, founder and CEO of NewStore, believes retail needs more than just tweaks to deal with these changes. Retailers need a makeover — which also is the title of Schambach’s new book: Makeover: How Mobile Flipped The Shopping Cart (And What To Do About It!).
In this exclusive Q&A, Schambach discusses just how revolutionary mobile technology is for retail, as well as why front-line employees are far ahead of retail leadership teams in leveraging mobile to successfully engage with customers.
Retail TouchPoints (RTP): It seems retailers are just beginning to grapple with how different mobile is from other channels — that it’s not just online commerce on a smaller screen. What do you think is the biggest misunderstanding retailers have about mobile?
Stephan Schambach: With mobile, the consumer becomes the point of sale. You can see this at Starbucks — people are using mobile to order their latté ahead of time and pick it up when they get there. Mobile means that whether you interact with a brand or retailer inside the store or outside is fluid.
Mobile is location-aware, and its small screen means it requires different interaction and payment mechanisms. A retailer can’t require registrations with multiple form fields. These were difficult enough to deal with on a web browser, but they’re basically impossible on mobile.
RTP: Are the scope and speed of changes generated by mobile one of the reasons that you wrote this book?
Schambach: In discussing the changes happening in retail with a number of different brands, it became clear that many of them, particularly the leadership teams, were not organizationally ready to deal with them. I wanted to provide people with a “cookbook” about how they can change their systems, their organizations, compensation structures, etc. The ultimate goal is for a retailer that was used to simply distributing product to turn itself into a brand that creates loyalty.
RTP: Within the retail organization, who do you think needs the most help in coping with all these mobile-influenced changes?
Schambach: It’s primarily for the leadership team, but it’s really for anyone who has some type of functional or personnel leadership role. I see the book as helping to form a language to speak about these things, and to become a communication enabler about changes that have to happen.
In many cases it’s the store associates who already are the most knowledgeable about how they want to work in the future and what the customer wants — and very often the official company policy is the opposite. For example, many retailers say associates can’t use their personal smartphones while they’re working — but those associates already are using them to text their favorite 40 customers about the new headscarf that has just come in. They are using Facebook, Instagram, etc. to keep in touch with shoppers. All this is happening outside of the retailer’s systems, which means the organization has no knowledge of it and the data doesn’t show up in the CRM system. So often existing technology rules are counterproductive, and the lower-ranking employees are the ones that have figured that out.
RTP: Why do you think retail organizations have had trouble crafting agile responses to mobile and other changes in the industry?
Schambach: Many retailers still have very siloed organizations. For example, the e-Commerce team is generally very sophisticated technologically, but is completely cordoned off from anyone else, with its own inventory and systems. Often it is not directly integrated with the retail stores, so something like buying online and picking up in-store can be very hard to organize. Another issue is that the incentive systems are designed to work against these functions. What’s in it for the store personnel to fulfill an order that was placed online when the commission goes to the e-Commerce guys? All of these things need to be understood holistically.
RTP: On an organizational level, what’s the most important thing a retailer can do to deal with the changes happening in retail?
Schambach: It’s critical to have a single individual who is in charge of both the in-store and out-of-store digital experience. In the past brands have had the retail guys ‘owning’ the store, and the e-Commerce guys ‘owning’ digital. Now retailers need a Chief Digital Officer that will be in charge of digital experiences wherever they occur.
RTP: What role do you see mobile playing in the store environment moving forward?
Schambach: If a consumer comes into a store, they expect a mobile app to be useful there as well. Say you are shopping and find five items you want, but two of them are not available in the color or size you need. Currently to deal with this you would need to provide a store associate with your shipping information to get the items sent to you. But if you could purchase your entire basket with your smartphone while still in the store, it already knows all your data. There’s no typing, no registration, not even a need to run a credit card through a physical device. I predict that eventually in-store card readers will go away, and the point-of-sale will become consumers’ personal mobile devices.
Store associates can use mobile devices equipped with these same capabilities, essentially the product catalog, plus some additional functions: CRM that provides a shopper’s browsing history, their wardrobe, and a clienteling function to help the associate make targeted recommendations. Retail stores have the human element, but that human element needs to extend its reach beyond the store. The associates need to be able to text customers and even send shoppable offers, and to be available as a consultant once they’ve built a personal connection with the customer.