WINNING THE RACE FOR RETAIL RELEVANCE
7th April 2025
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Speech Summary
The world is getting deeper digitally immersive. In January, Nvidia launched their new 208 billion transistor CPU at CES, a chip that again shifts gears in terms of the visual interface and processor capability. We already have robot vacuums in our homes, mowing our lawns and Elon Musk intends to manufacture 1000s of humanoid robots in 2025, alongside the rollout at his autonomous taxi fleet.
Alongside this, with the birth of the Beta generation, we now have seven different consumer demographics to serve. From Traditionalists (born after WWII) and Baby Boomers, all the way through to Gen X, Millennials, Gen Z, Gen Alpha and on to the Beta babies of today, meeting consumer needs as a retailer has become a more complex task.
Change in all forms presses down on every industry and the demands placed on the retail industry are no exception. Change comes at us as Technological, Economic, Social, Regulatory and most critically from our customers’ expectations themselves.
To survive (and thrive) every brand needs to exert a greater force against these changes, otherwise we will be crushed by them. To survive and ensure our businesses are future focused, we need to have the courage to embrace new directions. We need to collaborate and have an excellence in execution to have better connections with our customers.
In retail, it would be arrogant of us to assume that we can continue to run our business the same way over the next 10 years as we have over the past 10, as arrogant as Kodak thinking digital photography would be a fad, or Nokia feeling their scale would protect them against the iPhone. Arrogance kills entire brands and industries, and it could kill your business faster than you think. As customer expectations change, alongside our business and service landscape, so must we.
Staying relevant is key to survival and so we aim to focus on what our customers value. It is in exploring and understanding the values of the modern customer connection, we can build a brand and retail business for future success.
Take your eye off what your customers value and you run the risk of becoming irrelevant. We discussed four key values during the keynote.
Convenience
What this value means keeps shifting as consumers mature. There was a time when convenience simply stood for ‘local availability’, a store that would have what you needed, when you needed it.
This then gave way to quality, indulgence, and today convenience is very much around seamless, frictionless, easy and instant.
Regardless of the nature of the store (Spar or Eurospar), our customers want their needs met instantly. We need to satisfy these needs with a blend of genuine human interaction and using every technology available.
Remember that 70% of all Starbucks order are no longer placed inside the store (placed in app, for delivery or drive-thru). If anything, this shows us that convenience keeps shifting.
Authenticity
At the core of community and belonging is the authentic nature of connection. As retailers gear up multi-site strategies, we need to ensure that scale does not erode that genuine connection we seek.
We want to avoid the McDonaldisation relating to scale, also seen in Starbucks. From a product perspective, everyone has high quality bakery, deli and fresh offerings today. The differentiator is how we make someone feel in our stores.
Phygital
We now live in a ‘Digital First World’ – a world where we all reach for our digital devices first to answer any question or solve any problem. The digital Immersion is only going to increase with our deepening AI / Robotics reality alongside customer expectations. The retail experience and indeed, society, will never be the same again.
Every retail proposition has to be part Physical, part Digital. Customers now expect digital to drive their experiences. If you are not leveraging your assets on digital, you are 50% invisible as a business today.
AI is set to change every industry. Most importantly, it will unleash a new set of customer expectations around hyper personalisation and relevance for customers in their retail interactions. Be ready for that fourth-dimension connectivity. You need to be unleashing the customer data you already have, and using AI to hyper personalise customer communication.
Return to your business and ask yourself how you can better engage across the digital reality. How can you build and leverage digital assets to win the race for relevance?
Digital is not about new channels, AI and contact points (although it is those things too). Digital is simply our societal reality today, but more importantly it is about how we make a customer ‘feel’. Technology is only useful to us in customer connection if a customer is made feel something positive (recall that Octopus Energy case)
Connection
Ultimately, building Customer Lifetime Value and Customer Intimacy is about building Relationships. It is about moving away from the ‘transaction retail model’ and moving towards a model that is based around putting the Relationship at the centre. This is why CX has become such an inherent part of most companies’ strategy.
It is only when emotions are engaged do we build relationship, when the customer ‘feels’ something. We need to become a trusted community partner in life for our customers, not just another retail proposition. This is a new space for many retailers, traditionally product, operations or process centred.
The more we embed emotional response and authentic, compassionate customer interactions in the customer experience, the more we build that bond with a customer. We achieve both scale and depth of connection, essential for Customer Lifetime Value.
Look for ways to build significant relationships, with depth, authenticity and purpose. Recall the Taylor Swift fan enraptured with experiencing the product.
This type of engagement only comes when there is a significant relationship related to the retail experience.
In our future deep-fake, AI-fuelled world, authentic relationship will be everything.
Your Customer Connection Strategy Audit - 10 Questions to Answer
- If you were to make your retail proposition more customer centric tomorrow, what would that look like? Where in the customer journey could you do a better job at making it about THEM and not about YOU?
- Where could you implement PROACTIVE customer service rather than waiting for a customer to ask? How could we build loyalty and brand respect by moving towards a proactive retail service model?
- Where do we routinely go beyond customer expectations into the delight space? What 5 ideas could we bring to life in the customer journey that would make a customer smile in delight?
- What digital elements add value to the emotive customer experience? Are most of our digital tools about efficiency and process? Where are the delight moments using technology?
- What can we implement in-store to specifically win the race for relevance with younger Gen Z and Alpha customers?
- How do you share the moments of delight and above customer expectation internally? How do the rest of the employees hear, routinely, that we are delighting our customers?
- Who is your Excite & Delight Director within your team, responsible for delivering moments that go beyond customer expectation.
- What are you doing in the Employee Experience space that motivates your retail employees to want to deliver 5-star CX service? All of the values discussed apply to employees also.
- If a customer left your store tomorrow, where is that failure most likely to have come from in your customer journey? Audit your CX processes, identify pain points and look to dissolve the friction.
- Where is the evidence you are building relationships and Customer Lifetime Value in your customer service provision? Where are you authentic and pushing past transactions into relationship?
More content from Ken
To get a more detailed feel for Ken Hughes content, check out his Blog – The Blue Dot Consumer. Widely read by those in the marketing, customer experience and retail worlds, it is full of in-depth discussion and content relating to all things consumer.
THE CUSTOMER INTIMACY LADDER: CLIMBING YOUR WAY TO CUSTOMER LOYALTY
THE PSYCHOLOGY OF SURPRISE: THE GIFT OF AN UNEXPECTED CUSTOMER EXPERIENCE
COURAGE, TRUST & BELIEF IN CUSTOMER EXPERIENCE
For those too lazy to read blogs, and to view further visual content and past performances from Ken Hughes, check out the YouTube channel where he discusses all things consumer and customer experience related.
