Convincing consumer experience – an absolute necessity for survival

By Professor Dr Wolfgang Merkle is Professor of Marketing & Management at UE – University of Europe for Applied Sciences in Hamburg and owner of ‘Merkle.

Never before has brick-and-mortar retail been under as much pressure as it is currently – competition has intensified significantly and is now being stepped up from a wide variety of areas and drives, with a host of new alternatives that are obviously highly exciting for consumers. While until recently there was “only” a battle between online and offline models, today the consumer finds a multitude of additional ways to shop with price search engines, social commerce, live commerce and quick commerce offerings. At the same time, more and more “direct-to-consumer” concepts are being created by manufacturers or attractively staged stores of original online-only concepts: Amazon, for example, recently opened its own fashion concept “Amazon Style” in Los Angeles, which sets completely new standards in its design and the accompanying operating processes.

The challenge for traditional providers is so enormous because consumers find these new, competitively surprising and value-added alternatives highly exciting – with the result that classic retail with its traditional operating concepts is needed less and less. “The No Normal is the New Normal” is one of the statements describing this new situation – with the result that more than 100,000 stores of previous providers will disappear from the market.

If classic retail wants to survive in such an environment; if companies really want people to keep coming to their stores, then the stores must offer more than the competition – and not less. With even more exciting assortments, with exciting and inspiring merchandise presentations, with relevant services and convincing advice, with an inviting atmosphere and smooth, consistent processes in line with the assortment concept.

As convincing as this insight sounds at first glance – quite obviously, brick-and-mortar retail no longer seems to succeed in implementing it. In order to develop business models that excite customers again, retailers must overcome an internal barrier in their own mind set: namely, the thinking with which they have modeled their concepts and developed the accompanying operating processes up to now. In the past, the focus was more on cost and efficiency-driven considerations from an isolated perspective of only the company, combined with a narrowed “benchmark” analysis of so-called “best practices” of the competition – and it is exactly this approach that no longer works in the current world.

If there is one thing that the retail sector can learn from the new business models of the start-ups that are appearing so differently, the innovative online models and the “new way of thinking” of investors, it is a consistent customer orientation. If brick-and-mortar retailers want to retain their customers, they must design their own business model and all accompanying processes precisely from such an unconditional customer perspective – away from the traditional competitive orientation and toward a necessary customer orientation. Only when retailers stop thinking like retailers will they be able to truly innovate in a competitive comparison and win customers over again.

About Author:

Professor Dr Wolfgang Merkle is Professor of Marketing & Management at UE – University of Europe for Applied Sciences in Hamburg and owner of ‘Merkle. Speaking. Sparring. Consulting.’ Prior to this, he spent over 25 years as CMO, divisional board member, managing director and director at Tchibo, Galeria Kaufhof, ZARA, Massimo Dutti and Otto.