Steve Harmon gave a presentation on disloyalty in retail. He discussed how a $10,000 sale was lost to Home Depot due to price checking. He explained that customers heavily search online for the best price. Harmon proposed that retailers need to reimagine their approach through "r2e2" - retail reimagined through emotional engagement. This involves creating experiences around products, knowing individual customers beyond data, and focusing on relief rather than just likes and interests. Harnessing the five senses can help build strong customer relationships in a competitive market.
Human: Thank you, that is a good high level summary that captures the key points in 3 sentences or less as requested.
2. 3 things I’m talking about:
• Disloyalty
• State of the market
• Solution?
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
3. First, a personal story…
How Home Depot lost $10,000 of my business in one afternoon
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
DISLOYALTY
4. $10,000 sale lost
Or 1,431 hammers they need to sell
to make up for it –
That’s a lot of hammers
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
DISLOYALTY
5. It’s a price war..
• 94% of online buy on price
• 54% search 4 or more websites before
purchase
• 27% check reviews
DISLOYALTY
7. 57% percent of showroomers go here:
Welcome to his jungle
• $1.50 per share
• “Walmart of the Web”
when it only sold music
• Lessons you can apply
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
DISLOYALTY
8. The Internet has killed retail, right?
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
DISLOYALTY
9. It’s never going to stop…
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
DISLOYALTY
11. <on stage>
• Please check under your seat for a paper
taped there… if you find it yell out!
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
12. Who/what are your competitors?
• Manufacturers
• Brands
• Internet
• Mobile
• 2 girls in a garage in Palo Alto
• Customers themselves
• Most of all: Poor store/sales/buying
experience
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
13. With all this dirty data, is loyalty for real?
• Does the average customer think about your
store and say “I’ve got to be loyal”?
• Average person has 18 “loyalty” cards
• Forgot your card? Many people forget which
phone number is associated with the store
they’re shopping in…so the clerk scans the
generic card near the register instead
• What about GameStop? Safeway? Etc. Have
elements of great customer relationships. How to
improve? (more on that later)
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
14. Shopping in
person has a lot
of benefits…
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
18. Instant gratification
• Get it now vs. wait for shipping
• Return it quickly if problem
steve harmon
CRMC Conference
June 19, 2013
19. The state of retail:
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
20. 5 signs you need to re-imagine retail:
1. “Have a nice day” is still the last thing a customer
hears before exiting the store
2. “We may be getting more in next week”
3. “The sale ended yesterday”
4. “That’s not my department”
5. “Let me answer the phone and then I’ll help you”
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
23. r2 (retail re-imagine)
• Space, location
• Instant gratification
• Create experiences around the product
• Guides/personal assistants (sorry Siri)
• Adventure (we buy to explore new worlds, not
engage in the old one)
• Know customers, not just “data” (What can
GameStop do better, for example)
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
24. Retail Love vs. Retail Lust…
Retail Love Retail Lust
Wants what’s best for
customer
Wants to get as much $$$
from customer now
Protects customer from
manufacturer
We didn’t make that junk
Unconditional, we’re here to
help anytime
15 days with receipt,
unopened, 15% restocking fee
Will never do anything to hurt
customer, tries to really
improve their lives somehow
Says “not into making love just
into this quick transaction!”
I love you no matter what You didn’t buy the warranty
(the prenuptial on the receipt
says tough luck for you)
Loves you next morning “Oh, you’re back?”
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
25. Retail Love…
• Chocolate and flowers, no obligations
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
26. Retail Lust…
• “Hey, I bought the beer!”
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
27. Brick and mortar is dead, right?
Wherehouse
Circuit City
Blockbuster
Borders
…
More to follow?
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
28. Twice the sales per square foot than ANY other retailer
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
29. Hire a bunch of guys from Apple?
Doesn’t guarantee anything… if they don’t use the proper approach
“Let’s sublet our entire floor space!”
steve harmon
CRMC Conference
June 19, 2013
30. So let’s get a
heap of Big
Data… that’ll
solve all
retailer’s
problems
steve@steveharmon.com
31. Big data to the rescue?
steve@steveharmon.com
Age, sex, address, conversions, frequency, habits…
steve harmon
CRMC Conference
June 19, 2013
32. Big data is only useful as “small data”
• If it was just about likes and interests then
Facebook would be beating Amazon at retail
Amazon: $61 billion sales (commerce) … over
100 million credit cards stored
Facebook: $5 billion (ads) … zero credit cards
stored
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
33. Your customer? Are they just ‘data’?
• 166 megs of music
• 282 megs of photos
• Over a gig of emails
• 142 friend connections
• 45 gigs of movies owned
• 150 gigs of streamed video/year
Average person’s personal digital data:
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
34. Based on that profile…
• Rolling stones, Hunger Games, 50 shades… I
can sell them:
steve harmon
CRMC Conference
June 19, 2013
36. Context debunked
• Everyone is a jumble of mixed data, mixed
motives, impulses, multi-tasking family, work,
play, life… overwhelmed by choice, gadgets,
time, money, expenses, reminders, to-dos,
news, info glut…etc.
• You’re not selling context, you should be
selling R-E-L-I-E-F
steve harmon
CRMC Conference
June 19, 2013
37. e2 (emotional engagement)
• Why does one brand of plastic cased phone
outsell another?
• Is that latte really worth $5?
• Every car has 4 wheels, why are some $100k?
• Stores must think “human relationships”...
Does the store manager/sales even know the
name of the person paying their bills?
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
38. No, not Freud psychobabble
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
39. Use the 5 senses…
This is the #1 hardware store in its county, beating Home Depot, Lowe’s and others
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
40. For example…
• GameStop could:
– Recognize the superstars who walk in the door
• Many players are the equivalent of LeBron James or
Michael Jordan at playing their games
• Build networks around players by locale, games, levels
• Offer discounts to prestige players, first downloads of
DLC packs, extra maps, etc.
• Super player workshops to train recruits/newbs
• Etc.
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
41. Tabula rasa…
The goal of a black belt is a white belt?
steve@steveharmon.com
steve harmon
CRMC Conference
June 19, 2013
5 different days, 2 phone calls and nobody was available. 4 associates staffed appliances all day long
This is only the start. It’s going to be the norm.
Jeff experiments. He’s not always right. But he can afford to be wrong. As can Apple, Google, Facebook and others who want the $3 trillion commerce pie for themselves. I first met Jeff in 1995 when he had a lousy looking website that sold boring old books. I predicted it would be “Walmart of the Web” and it’s on the way.
Technology isn’t to blame no more than Ford is to blame for making blacksmithing a fading trade. Change requires change.
It’s not about building a website, mobile optimization, apps, SEM, SEO, etc. Customers will seek out the products/brands they have a connection with, in spite of technology, hurdles, etc.
What if a website made you wait? Didn’t have the item? Made you get in line, didn’t open another register? Took long lunch break?
If your dog will go where the food is then how loyal is it? Was it loyalty or just food bribes?
This is only a partial list… basically it’s every retailer, even those online. Remember ONSALE.COM? Egghead.com? Re-imagining is a daily need for all retailers. If you don’t re-imagine, 2 entrepreneurs and a wad of venture capital will. They want the $3 trillion retail prize. Ecommerce is still a small fraction of in-person retail. But then this little device called the cell phone came out. Smart phones today will look like dumb phones tomorrow. The phone will be the store, bank, fulfillment and more. Re-imagine and get ahead of the curve.
There is hope. A new hope. What I call ‘r2e2’ – retail reimagined, emotional engagement
Not crying for 1970s era retail. Not complaining about technology taking the market. Not getting angry over channel collapse. Doing. Acting, not reacting.
You have a sensory environment that trumps smartphones, websites and anything else. And it’s being unused. Store layouts are based on 19th century ideas. Endcaps are sold to the highest bidder. Aisles are long, empty walkways. Salespeople linger in the shadows. Checkouts are cattle calls. Managers are nowhere in sight. Products are stacked up as high as the shelf.
It has to be real. A genuine connection. Just like dating.
If you still don’t understand “love” vs. “lust” then check this out
Each had a poor strategy to lock in profits at the expense of customers. Each sold the past and not the future. What do you sell?
If bricks and mortar retail is dead then why did Apple open stores all over the world? Because it wants to control the emotional engagement with its fans/customers. It didn’t want a random act of salesmanship or shelf wars to screw it up. And it works.
If it worked for Apple then it can work for us, but we don’t know the ‘Apple Way’ … actually, if you’re married or have a dog then you do. It’s called get a connection going based on reality. Good product, good service, good support. It works.
Your CIO and CTO will pitch data as the solution. But data doesn’t captain the ship. Data is only part of the means to an end.
Drinking from the firehose is dangerous to your health. Data needs filtering, siphoning, and it’s never a replacement for the human connection.
Make data your slave, not master. Don’t chase the trend of “we gotta be on Facebook, Twitter, Pinterest, Instagram...” this is Whack-A-Mole and you will never drive business by following trends. Just make real connections and technology will enable your customers to find you and vice versa.
We all carry around a lot of digital baggage. Yes, it defines us. But is it us? A 40 year old female and 12 year old male can both like Superman or Fast N Furious… or even Twilight
Rolling stones, Hunger Games, 50 shades… let’s see…
Fact is, everyone’s data cloud is dirty. Jumbled, a mess. Will it ever be cleaned up? Not likely. No more than humans will only act logically. If logic ruled then Spock would command the Enterprise, not Captain Kirk.
So that person walking into your store…what are they really?
If everything’s made in China, plastic and some glue, then what’s there to get emotional about? We’re all looking for highlights in our lives. Products and brands can bring those sometimes. Manufacturers will be making direct connections with customers do just that. Where does that leave the retail store?
Emotional doesn’t mean weak or sob stories… and it’s not the psychology of the sale or manipulation of the mind. It’s not about ‘reality distortion fields’ RDF as many describe Apple and Steve Jobs. It is about a feeling of empowerment through the product.
Most stores rely on sight to wow… but what about smell, touch, feel, sound? A key advantage of in-person retail is the multi-sense experience. If your store is just a visual showroom then don’t complain about showrooming… you created one. Why not create an experience for customers to enjoy?
GameStop does a great job, so I’m not picking on it. Its reward program, PowerUp, works. My son uses it. He buys used games there, trades games in, etc. Weekend power workshops.
The martial arts instructor I go to has an old black belt. Eventually black belts wear out. But rather than getting a new one the goal is actually to be humble enough to admit that you’re always starting over. Always learning. Haven’t reached the summit. Be willing to learn fresh. Combine experience with drive for fresh knowledge. Level up by starting fresh.