Gustin Shows Why Retailers Still Don’t Get Digital

Gustin to transform retail

For years, Australian retailers have under-invested in digital. They held back technology investment, closed down innovation programs and hired traditional marketers when they should have been growing their own breed of tech-savvy innovators. And while retailers had their heads in the sand, the world changed.

Recent failures like ClickFrenzy have been down played and it’s clear that even the retailers with some digital budget are unprepared for the fast moving transformation taking place thanks to mobile.

In spite of all the trends, facts, figures and forecasts, retailers remain unconvinced. What is driving this myopic view of the future of business? In many ways, it feels like a classic illustration of the The Innovator’s Dilemma – companies (and indeed a whole industry) misses out on new waves of innovation because they are unable to capitalise on disruptive technologies.

But I also think retailers are captives of “Big Thinking”. Because they operate at scale, big thinking clouds their judgement. It’s easy to discount competitors when they generate sales that are fractions of a percentage of your business. But it’s not the percentage that’s important, its the velocity and momentum.

Hand made men’s clothing manufacturer, Gustin, illustrate this shift beautifully. They launched a Kickstarter campaign some time ago with the aim of raising $20,000. The premise was simple:

  • Capitalise on their growing brand and reputation for premium menswear hand-crafted in San Francisco
  • Allow for pre-purchasing of products through crowdsourcing – perfectly matching the demand and supply chains
  • Deliver the retail items to customers directly at wholesale price

Now, with two days before the campaign closes, Gustin have massively over-reached their goal. Currently sitting at almost $407,000, Gustin have smashed the target, connecting with almost 4000 new customers and validating not only their approach but also whole product lines.

And all this was done by taking an outside-in view of their business.

Until other retailers can transform the way they think about their business, their customers and the experience they provide, they will continue to struggle with this new world of digital.

The Rise of the Social Prescription

The Rise of the Social Prescription

For decades, many industries have resisted the shift to digital. Retail, pharmaceutical, financial services, healthcare and even the media have fortified themselves against the changes taking place in the global consumer marketplaces. But one-by-one, all industries must, sooner or later, engage with those customers who have already made the digital transformation or risk losing businesses to more nimble and digitally focused competitors.

Over the last half dozen years, social media has been the more publicly acceptable face of the digital revolution. And while it is wrapped in positive terminology (friends, likes, hearts), these mask a deeper and more profound shift – the shift from analog to digital. It is this shift that is sweeping all before it, impacting all aspects of business.

In the healthcare industry, peer-to-peer recommendation is giving rise to social health – and what I am increasingly calling the social prescription – diagnosis and product recommendation via social networks. For better or worse, the social prescription is a reality that healthcare specialists now must also contend with. People are now consuming health information, content and services like they do any other product – and have expectations more in line with retail experience than the traditional doctor-patient relationship.

This infographic from the alliedhealthworld site shows how this plays out:

  • More than 75% of consumers expect a response within a day after requesting an appointment through social media (note the use of the word “consumers” rather than “patients”)
  • 20% of consumers join online health forums
  • 25% of internet users watch health related videos

But the real challenge is not in understanding the shift, it is in applying that understanding to the strategy of your business. How do you:

  • Transform your healthcare or pharmaceutical business while navigating government regulation?
  • Combat misinformation and uninformed recommendation?
  • Compete for the mindshare of the connected consumer?
  • Integrate your business strategy with the demands for a digital future?

Contact me to learn how I can help.

Infographic-How-Are-Consumers-Using-Social-Media-for-Health

Retail Innovation? Try Embracing Showrooming

2005Mar-AustinTypeTour-137 - Roadhouse Relics - Visit Our ShowroomYou know what it is like … you see an item online. It’s a great deal – a special price and a coupon code. That credit card is burning a hole in your desk. But in the back of your mind is that one lingering doubt … will it fit.

So what do you do? You “showroom” – you go in-store to check the item for size, fit, colour or texture. You do your “shopping” in-store and you make your purchase online. This practice is known as “showrooming” and a recent article suggests that retailers have some work to do to avoid falling victim to this new shopping trend. Retail software vendor, CrossView, suggest that cross-channel retailing is the answer.

And there is big business at stake – with more than one in two Australian shoppers aged over 15 now shopping online. PwC and Frost & Sullivan predict that 2012 online spending levels will hit $16 billion – and will grow at a compounded growth rate of 14.1% through 2016. But these figures don’t include travel, events, financial services or media downloads.

This is backed up not only by spending but by brand awareness and customer engagement via social media. According to SocialBakers.com, Australians love online shopping – with Fashion, eCommerce and FMCG industries ranking the top three Australian Facebook pages in the year up to July 2012.

And it is this convergence of eCommerce and social media – in what we can loosely call “social commerce” – that is potentially a game changer for retail. For decades we have seen an entrenched refusal of Australian retailers to invest in the kind of digital experimentation required to lead to breakthrough innovation. This, in turn, left gaping holes in the market – which benefited companies like Apple and Amazon.

But if we look to emerging consumer behaviour we can see not only threat but opportunity. What if retailers were to embrace showrooming? What if, rather than discouraging it through restrictive in-store policies and management – retailers owned, encouraged and transformed the customer experience so that it was EASY for shoppers to showroom.

After all, if the social web has taught us anything in the last decade it is that consumerisation crushes all obstacles.