Opinion: Making Sears Relevant to Millennials

3/22/2018
It’s a tradition that an entire generation fondly remembers: browsing through the Sears catalog ahead of the Christmas holiday, circling the highest priority wants with a red pen.

Fast forward to present day, where children create wishlists online and forward them to their family members’ mobile devices — right down to the links to follow for a direct purchase. With e-commerce, Black Friday has nearly been eclipsed by its online counterpart, Cyber Monday, as the highest volume shopping day of the year.

With the desire by most of us to purchase goods online (and with online retailers like Amazon snatching up as much as 40% of all online sales in the U.S. last holiday season to show for it) it’s easy to jump to the conclusion that the brick-and-mortar retail model is dead.

Everywhere we look are dire predictions of retail’s apocalypse. Industry pundits put the blame squarely on Millennials — now 87 million strong — and their love of e-commerce for the death of the physical storefront.

But the truth is this: retail isn’t dead — it is changing. And successful retailers are changing with it.

Like every industry disrupted in the digital age, retailers are experiencing a significant transformation, too. The ones who are thriving are shedding their legacy models and transforming right along with their employees’ and customers’ changing preferences.

And the transformation is occurring in both directions. E-commerce companies who once shunned the physical storefront now see the model as an integral part of growing their revenues and building brand loyalty across all channels. Consider these recent examples:

• Seeing the future required a brick-and-mortar strategy long before anyone else did, online giant Alibaba has invested as much as $8 billion in brick-and-mortar retailing, acquiring stakes in local supermarket chains and privatizing Chinese luxury mall Intime for $2.6 billion.

• Amazon has infused a brick-and-mortar component into its business strategy, selling its popular Alexa in store mall kiosks during the holiday season; opening physical book stores; and most recently acquiring Whole Foods and debuting its cashier-less store format Amazon Go.

• In 2012, Everlane CEO Michael Preysman said he would “shut the company down before we go physical retail.” In 2017 Everlane opened its NYC flagship store in SoHo, with plans to follow that up with a larger store in San Francisco this year.

Redefining Retail: Four key strategies


Over the course of the past decade, I’ve seen many our own retail clients successfully redefine their retail strategy to better attract Millennials and younger generations of online-savvy shoppers. Through this work, I’ve seen four key ways they are making the transition:

1. They invest in their front-line workforce with the right technologies.
Avanade’s recent research with Incisiv and Microsoft reveals that when it comes to empowering their frontline workforce with modern tools and training to deliver an excellent employee experience, nine in 10 retailers are failing to heed the call. Retailers’ inability to enable its frontline workforce with tools and training is most felt most in three key areas; customer experience, collaboration, and employee productivity and retention. Even more astonishing is its impact the bottom line. Our survey found that a retailer with $1 billion in annual revenues loses as much as $110 million annually by failing to provide modern workforce tools and training to its frontline workers.

2. They understand that the customer and employee experiences are interconnected.
Our survey found that retail “leaders” are 60% more likely than laggards to provide collaboration and productivity tools to their frontline workforce, and 40% more likely to be satisfied with their solutions. Retail leaders demonstrate a greater focus on enabling store associates and store managers through mobility and analytics. And they report a 26% improvement in employee retention through investments in technology and training.

When you think about it, this makes perfect sense. Generations X, Y and Z make up 79% of the retail workforce. They have grown up with technology at their fingertips and appreciate its promise to make work easier and more efficient. When these tools are absent from the workplace, it simultaneously impacts the employee and customer experience.

And it should come as no surprise that retailers who fail to empower their employees with the right technologies see on average a 67% turnover rate in part-time staff (which in turn has a negative impact on the overall customer experience.)

3. They successful make an ROI case for improving employee engagement and embrace change.
Adapt. Evolve. Change. Whatever you call it, it’s a must for retailers in today’s digital world. So, what’s stopping them?

Our survey found that cultural resistance to change and the inability for retailers to quantify the return on their technology investment are the two most significant roadblocks cited by those who are already behind.

There’s clear upside to bucking tradition. When engaged employees have more time to spend with customers, everyone wins. Our survey shows that retail leaders who embrace the new way see employees spend 9% more time with customers; achieve a 16% in-store conversion rate; and a 12% increase in customer satisfaction, which in turn can potentially generate $100 million in new revenue. In other words, through an improved customer engagement, employees are rebuilding brand loyalty in a world where digital disrupted it.

And they see happier, more engaged employees to boot, reporting a 9% increase in workforce productivity, a 26% rise in workforce retention and the potential to improve margins annually by $10 million.

4. They see the customer experience holistically — from same day delivery through to the return experience.
Blending e-commerce with physical storefronts demands a consistent customer experience regardless of channel. Retailers in the new world must understand the lifecycle of the purchase experience — from all the way through the return process — to see where gaps exist and the opportunity to reinforce their brand traits remains.

This consistent experience can serve as the magnet for attracting new customers including Millennials, Gen Y and Gen Z. By engaging with technologically savvy buyers in new and exciting ways, retailers can attract entirely new customers to their brand and connect in ways that are relevant to them.

The future of stores? It’s how. Not how many.

It’s clear that retail innovators are redefining the role of brick-and-mortar stores in the context of their overall business model. But the key to securing a rightful place in the future is embracing the reality that the employee experience and the customer experience are inexorably connected.

The richness of the retail experience has never been greater. And the possibilities for brick-and-mortar stores to be an integral part of a retailer or brands’ customer experience are limited only by their imagination, innovation and execution.

Perhaps with all of the changes in retail, we’ve seen the death of the printed holiday catalog tradition — but what if rising from the ashes came an even richer, more interactive and engaging experience? I for one am eager to find out.

Matt Joe is chief technology innovation officer of Avanade.

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