Retail’s New World Order

The importance of retailers owning their own brand dialogue
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Posted January 13, 2020

Strategies that have worked in retail marketing for the last few years no longer work.

Recently, I had an instructional conversation with my 20-year-old daughter about influencers – beauty in particular – and how they are losing influence over their followers. With up to 80 percent of brand marketing budgets being given over to hiring influencers, their respective credibility has been diminished in the eyes of their followers, and the very authenticity that gained these influencers those followers has been diminished, or even eradicated. With the not-so-subtle shift from scrappy YouTube videos to polished mini-movies, consumers have figured out that the earnestness of the influencer’s recommendations is now questionable.

I don’t think the answer is to have a stable of influencers, although I realize that is a current tactic employed by brands. They’ll each lose credibility in turn. It’s inevitable as each influencer monetizes its audience. So if your outside sources of advocacy are removed, how does a brand achieve direct connection with its consumers and garner loyalty? The better question really is: Why was the creation of this connection outsourced in the first place?

I’ve been told by a millennial that millennials don’t like to talk (physically) to people they don’t already know. But luckily, they do engage through their phones. We all know this, and so do retailers. Coupled with smart (not creepy) use of data, mobile communication should drive engagement. At this point, the question of engagement should be solvable if the retailer puts the right resources behind it. The alternative is to let someone else do the engagement for you. And that’s where the influencers stepped in. Mostly millennials themselves, they spoke the right language and looked like their audience. They also started from a place of passion – aka, an authentic positioning. Authenticity engenders trust. Now the trust is gone, and retailers need to find their own voice.

There are so many vehicles now to do so, there really is no excuse for retailers not to control their own dialogue. But how can retail achieve authenticity in that conversation at scale? It’s easy when you have a single store, managed by a private owner, where the products are hand selected around that owner’s point of view. But once the brand starts growing, how do you prevent the dilution of the product curation, the trust garnered by the original purveyor, and the direct dialogue consumers can enjoy with a small enterprise?

I guess the other side of this inner dialogue begs the question: Why is Amazon immune to these issues? The Amazon machine continues to grow, allowing the cornerstone of convenience to be the bedrock upon which it expands its empire. There is no discussion around authenticity (except where knock-offs are concerned), no point of view, no distinguishing brand culture – and yet they have the community strength of Apple. This is not shocking in the broad view, as they appeal on the same level; as a brand, they make people’s lives easier.

The salvation for retailers will be Gen Z. They can talk to this group. This generation is an interesting blend of their Gen X parents, who were raised in Boomer households, and are digital natives. Their value system was developing around the time of the Great Recession, so they tend to be more practical than their millennial counterparts and prioritize value and authenticity. I believe this is the generation to reset to, because I predict we’ll start to see a behavior shift in millennials that will align with Gen X and Gen Z’s inclinations. We’re already seeing this shift in the older half of that group as they are now finally buying homes and having children.

What is retail’s “new order”? My theory is that it is simply the old order utilizing new tools. If you look back at the roots of retail, it always had its foundation in the human connection. Following the logic that specialty retail spawned the department store, which was the precursor of the mall, I would posit that the department store is an ancestor of online shopping. Like Amazon, it offered convenience and choice. Its competitive advantage remains the human factor.

Marvin Traub, during his tenure at Bloomingdale’s, knew what it meant to engage and entertain. All retail must reestablish thoughtful product curation and alignment with a focused point of view, and do so in an environment that’s appealing because it has a mixed offering of experiences. Retail is not dead, not even close, but retail at scale is dying. The model must be retooled, scale needs to be broken down, and control surrendered to the local. This will introduce chaos, but from chaos comes opportunity.

Kathleen Jordan, AIA, CID, LEED AP, is a principal in Gensler’s Charlotte, N.C., office, and a leader of its retail practice with over 24 years of experience across the United States and internationally. Jordan has led a broad range of retail design projects as both an outside consultant and as an in-house designer. She has led projects from merchandising and design development all the way through construction documentation and administration, and many of her projects have earned national and international design awards. Contact her at kathleen_jordan@gensler.com.