Project Description

The retail industry is in a highly dynamic and disruptive state where technology and consumer behaviors are changing at paces never before imagined. News reports oscillate between ominous predictions about the demise of the traditional store and the tremendous opportunities brought about by emerging technologies promising to foster deep consumer understanding and engagement across multiple channels and platforms. Simply adopting or expanding digital omnichannel capabilities has not proven to be a panacea for stale retailers. Further, while the pandemic of 2020 certainly accelerated many omnichannel initiatives, there are a myriad of new challenges to consider. Leading brands are placing high priority on becoming customer-centric retailers and developing strategic roadmaps in pursuit of this goal.

In the first edition of this two-part point of view, we discuss the reasons, challenges, and implications of truly becoming a customer-centric retailer. In part two we outline key steps to achieving this goal.

Channel-less Customer Experiences

At its core, retail has always been at the center of how humans interact, consume, and exchange value. Bartering, marketplaces, catalogs, departments stores, and malls are the manifestation of retail through the ages. This landscape remained relatively unchanged until the rise of the digital age. The internet’s impact on technology, culture, and commerce has been revolutionary. It forged the opportunity for eCommerce, enabling customers to transact and purchase online around the clock and virtually from any location. The internet opened up access to customers who didn’t have the time, interest, and/or means to get to a physical store, and so began alternate digital channels and additional opportunities for both digitally born and existing brick-and-mortar retailers.

These ‘channel-less’ experiences require a dynamic shift from traditional product or channel-centric approaches. Long gone are the days of ‘stack it high and watch it fly.’ Retailers and consumer goods companies embarking on understanding more complex customer data and journeys are faced with new requirements to attract, engage, convert, and retain customers.

All relationships are built over time, through mutual exchange and experiences. If a retailer’s success is the result of relationships cultivated with their customers, nothing is more paramount than acutely understanding those customers and remembering why the business exists in the first place.  This is why social media has become a compelling and important medium since it fosters interaction and engagement between customers and brands.

Unlike most retailers, customers don’t think in channels; customers view any interaction—digital or physical—as experience with the brand that is seamless and channel agnostic.

This mindset shift to ‘experiences with the brand’ is about building relationships and enabling customers to enjoy consistent interactions regardless of channel—and providing unexpected value along the way. Giving customers unparalleled experiences will result in loyal customers and advocates who are not only willing but enthusiastic about sharing their experiences. As Harry Gordon Selfridge once said, “Excite the mind, and the hand will reach for the pocket.”

A key component of customer-centricity is trust in the brand. Trust manifests itself through several components in the retailer-customer relationship: proper assortment, product information, pricing, inventory accuracy, data security, customer service, quick delivery, and more. Customers must be able to trust that these components are planned, designed, supported, and managed flawlessly and consistently.

Another key factor is being relevant and anticipating customers’ needs while avoiding the ‘creepy factor.’ This is now more evident with the increasing use and acceptance of advanced analytics and artificial intelligence technologies, such as Alexa and Siri. It is widely known that online behaviors are tracked and leveraged by digital retailers, and in-store customer tracking technologies are becoming more prevalent; however, retailers must be very cognizant that shopper behaviors vary widely—some prefer a very autonomous experience, while others appreciate more involvement by the brand, particularly concerning in-store service. In either scenario (as well as those in between), retailers must carefully balance their understanding of customers with being too invasive.

With so many choices of where and how to buy products, not delivering on customers wants and needs means someone else will. Customers value experiences, solutions, convenience, and effortless shopping. Supporting growing consumer demands and expectations is paramount for remaining relevant and if done well, a competitive advantage in the quest for becoming a customer-centric retailer.

Customer-Centric All-Stars

Starbucks and Nordstrom are examples of customer-centric companies achieving success by putting consumer experiences at the forefront of decisions about how to best spend resources and focus efforts.

Starbucks has always sought to become the “third place between home and work,” designing stores to be inviting, comfortable and a place to stay a while. They continually seek to elevate experiences, deliberately exiting their online store business in fall of 2017 to simplify and integrate digital, mobile, and store experiences as part of their ‘digital flywheel’ priority focusing on four pillars:

  • Rewards

  • Personalization

  • Ordering

  • Payment

The mobile order experience is convenient, easy, and seamlessly integrated into the mobile app and rewards loyalty program and drives customers into stores. Not surprisingly it is the most popular and regularly used loyalty rewards app among restaurant chains according to a study by The Manifest.

Nordstrom, already known for its legendary customer-centric culture, continues to invest in technology and data analytics to create more personalized and cohesive experiences across channels. Advancements include expanding online offerings, updating the loyalty program and mobile apps, and testing new store concepts (for example, Nordstrom Local)—all with the objective of improving seamless service offerings and experiences for customers, regardless of channel.

Other brands that excel at customer-centricity are also notable for concentrated focus on employee satisfaction at every level: Costco, HEB, Publix, and Wegmans—all of whom are consistently cited in a variety of annual publications focused on “the best places to work.”

Incidentally, all of these brands operate authentically and foster trust by aligning their organizations and resources to support their respective purposes of putting people at the center of everything they do. This is reflected in their respective mission statements. However, they tend to be the exception since many retail and consumer goods companies have yet to make the changes necessary for operating at this level. Still, they are excellent examples, representing the enormous value exchange that can be achieved by continually improving, assessing, testing and trying things to remain meaningful and relevant.

The Path to Customer-Centricity

In customer-centric companies, the entire enterprise—all departments, processes, and systems, exist to serve the customer first, by creating value, aligning, and collaborating to engage customers on their terms. This means shifting the focus and approach to developing the experiences first then delivering accordingly across the appropriate channels and platforms, as well as in terms of aligning product assortments, messaging, promotions, and customer-facing roles and responsibilities.

Recognizing retailers are at various stages of maturity and levels of sophistication, it is important to note that there is no one formula for success. Evolving to improving customer experiences is unique to each organization’s circumstances. Further, companies do not need to take an all-at-once approach to becoming a customer-centric retailer.  They can investigate and execute incremental improvements that will bring meaningful results.

The following components are vital to becoming a customer-centric retailer and require careful consideration before initiating action:

  • Planning strategically and collaboratively
  • Identifying gaps in the company’s current versus future state

  • Being consciousness (and honest) about current capabilities

  • Exploiting new technologies appropriately and relevantly

  • Ensuring transparent communications internally and externally

  • Understanding the resources required to change

Final Word

Changes in consumer behavior and expectations thrust forward by global disruptions, advancing technologies, and new service models continue to put pressure on retailers. No longer is it enough to have a store or a website that merely transacts—modern consumers expect retailers to not only understand them, but anticipate their needs, personalize their experiences, provide unexpected value, and make all touch points seamless, convenient, fast, and easy.

Of course, recognizing the reasons for and importance of becoming a customer-centric retailer is merely the first step. Knowing how to do it is another matter. In the second part of this point of view series, we will outline several key transformational steps to consider in identifying, assessing, and implementing strategies to evolve your enterprise towards customer-centricity.

About Parker Avery

The Parker Avery Group is a leading retail and consumer goods consulting firm that specializes in transforming organizations and optimizing operational execution through the development of competitive strategies, business process design, deep analytics expertise, change management leadership, and implementation of solutions that enable key capabilities.

For more details, contact:

Kathi Toll

Tricia Gustin
Senior Director, Marketing


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