Through the retail lens: Digital disruption

Author and consultant Steve Dennis on leveraging opportunities and navigating the customer landscape

Steve Dennis knows a thing or two about strategy, success, impact and the customer landscape. In addition to serving as president of SageBerry Consulting and former chief strategy officer and SVP of multichannel marketing for the Neiman Marcus Group, he’s also author of the recently released book, “Remarkable Retail: How to Win & Keep Customers in the Age of Digital Disruption.” NRF spoke to him about navigating — and surviving — these decidedly unusual times.

Image
Steven Dennis
Steve Dennis

What has it meant to “win” in the digital landscape during the pandemic, and who is doing it?

I'm reluctant to suggest that anyone can win, at least in the traditional sense, during such an extreme crisis. But I’m reminded of what noted business strategist Mike Tyson supposedly said: “Everyone has a strategy until they are punched in the face.”

Right now, most in the industry need to be focused on managing for cash, avoiding a complete meltdown and either surviving the next few months or not being forced to take actions that may do irreparable long-term harm to their business.

I’m also hesitant to anchor too much on it being about digital versus bricks-and-mortar. Out of necessity, customers are spending more time in digital channels and concentrating their spending there. We don’t win in the digital landscape. We win in the customer landscape and digital drives bricks-and-mortar, and vice versa. That won’t change once we are out of this crisis.

Those that are weathering the storm better than others are staying laser-focused on how to show up in remarkable ways in the moments that matter for the customers they seek to acquire, grow and retain. In some cases that means adapting to unusual circumstances, like Best Buy launching curbside pickup; in other cases, it's pulling back on transactional marketing and re-investing it in charitable giving and raising wages for their associates, as brands big and small are doing.

What lessons are being learned now that might impact the way retailers navigate their digital efforts in the future?

The retailers that have gotten themselves into trouble in recent years — and are most vulnerable to not making it through this crisis — basically watched the last 20 years happen to them. They failed to break down the silos between the channels and harmonize the shopping experience. They often thought a slightly better version of mediocre could be a winning strategy. They failed to appreciate and respond to the seismic the shifts in customer behavior and technological disruption.

This crisis only amplifies many of those concerns and accelerates the most disruptive digital trends. The world we operate in was highly volatile, uncertain, complex and ambiguous before we entered this crisis — and is even more so now. That puts a premium on being clear about who are customers are and what needs and desires we seek to meet in highly distinctive and memorable ways. It also highlights the criticality of business model agility. To paraphrase Jon-Kabat Zinn, the waves are going to keep coming. We're going to have to learn how to surf.

How can those who have not yet caught up with digital disruption survive?

Even before the pandemic, it was obvious that the pace of disruption was only accelerating and those retailers with unremarkable value propositions and weak balance sheets were going to continue edging every closer to the precipice. For brands that are really behind, it's critical to accept that you can't cost-cut or store close your way to prosperity. Good enough is no longer good enough. That means we must deeply understand what it takes to be remarkable with our core customers and focus our scarce resources on leveraging those opportunities. We must be willing to take more risks. We must build a culture of experimentation and always be testing. As my friend Seth Godin says, “if failure is not an option, then neither is success.”

The challenge for so many retailers, sadly, is even if they know what to do, they don’t have the skills or capital to do it. And for this reason, so many will continue to fall further and further behind. Faced with this daunting challenge they must pick their spots to focus their limited resources. They should remember that no customer buys technology and that it’s not about digital versus analog. It’s about how they complement each other.

Related content

Coronavirus Resources for Retailers
 
Resources and information for retailers on the COVID-19 pandemic.
Read more
NRF chief economist says pandemic made this year's holiday forecast the most challenging ever
 
The pandemic has presented unique circumstances for the nation's economy, making forecasting more difficult than ever.
Read more
NRF encouraged by bipartisan stimulus package conversations
 
We are encouraged by news of bipartisan discussions about meaningful and comprehensive stimulus measures.
Read more