The Age of Disruption

Everything has Changed and Nothing is Different

BY LEN LEWIS

“Don’t throw the past away you might need it some rainy day

Dreams can come true again when everything old is new again”

So go the lyrics of an old, somewhat sophomoric song. But should it be the manta of 21st century retailing which, faced with disruption from non-traditional retailers, has forgotten the lessons of the past?

“That’s why the title of my session is ‘Everything has changed and nothing is different’,” said Scott Stratten, founder and president of Un-Marketing, and a featured presenter at this year’s CGA Strategic Conference. “It means we’re back to the core of the business which is building trust in products and companies.

“What’s old might be new again, but this time you need to have it on an app,” said Stratten, whose presentation spans a variety of issues from disruption in the marketplace and social media to simply building or rebuilding connections and trust with customers.

“Disruption doesn’t mean the old ways are done,” he said. “It just means exploring other options. For instance, a lot of marketing that carries more weight is consumer-generated like reviews on Yelp and Google. They can be more powerful in attracting new customers than a print ad.”

Despite inroads by Amazon and others, traditional grocery shopping is not dead.

“Grocery stores and grocery delivery – which has been around for decades can certainly co-exist. You just have to fine tune it,” he said. “I remember the days of going to the grocery store with my mom when they pushed the tubs out on the conveyor belt and a nice young person helped you put the groceries in your trunk. It wasn’t efficient or necessary to have cars idling in front of store. But people loved it.”

None of this has to do with changing demographics, often cited as a root cause of the industry’s ills.

“I don’t think this is the issue,” said Stratten. “Disruption for me is change without time to resist it. Much of that has been brought about by technology in everything from food delivery to monthly subscription boxes that contain all the ingredients and portions to fully cooked prepared foods. I love all the different options and I’m middle age. My mom is approaching her 80s and loves the convenience. So, convenience is not a generational thing. It’s one of the basics of the business.”

A part of this is nostalgia, said Stratten, adding that at the end of the day consumers liked it because the service makes shoppers feel special.

“Over the past decade some of these touches have gone away for the sake of efficiency. It’s understandable given that margins in the industry are so thin,” he said.

The bigger issue for retailers and all businesses is communication.

“To approach that we have to look at changes in society – not just people,” said Stratten. “I’ve read that millennials are killing off everything in the world from soda and beer sales to movie theaters. I’m amazed we’re still walking around. But they haven’t killed anything. This is progress – just disruptive progress.”

But consumer preference is not necessarily a matter of disruption.

“It’s about things that have been around for a century like price, selection and convenience,” Stratten noted. “And sometimes preference is because a store may be on the side of the street in the direction I’m going, or because there’s a Starbucks inside, or I could be going to Walmart because I also need a car battery.”

Taking this a step further is differentiation, an important and valuable strategy in a world of commodities, but less effective than we think, according to Stratten, adding that if two stores are selling the same staples, then differentiation points don’t have anything to do with formal branding.

“It’s about when I go to the butcher counter and he remembers helping me with a smoked brisket. Now I’ve got a guy!” he said. “So I can say to him, I’m going to try this. What do you think?”

Stratten says consumers all want that connection and to feel special.

“I’m not talking about feeling that every cashier or person stocking the shelf is your best friend,” Stratten said. “It’s about having a place that makes you feel the best. You can get bread, milk and eggs any place. I’ll go to the store that treats me like a customer, not an interruption.”

When a brand has a marketing budget everyone points to increasing it for digital.

“You have to ask if you’re spending the existing budget in the best way possible,” he said. “It’s no longer the old axiom – ‘I know that half my marketing works I just don’t know which half.’ There’s no excuse not to track, test and reconfirm what we’re doing on a daily basis.”

“Consumers all want that connection and to feel special… it’s about having a place that makes you feel the best.”

Asked whether this means less focus on technology and more on personal communication, he replied: “When I talk about disruption it doesn’t mean that some of the old school, classic marketing strategies don’t work. All marketing works if you do it right.

“Anyone who preaches that certain ways are dead is usually selling something else,” he continued. “We’re not here to tear down billboards and the direct mail industry. There’s still a place for things like grocery flyers or coupons. We’re in an age of overtracking and we know what drives traffic to the stores.”

But some companies may be guilty of over-messaging.

“We are bombarded with advertising,” Stratten believes. “I was in a bathroom stall last week and there was an ad in there – talk about a monopoly on someone’s attention. Given the location it could be great for an ad on prune juice. Targeting is key.”

But when companies go digital and stories go viral, companies must be prepared.

“When things go wrong, even if it’s just a small complaint on Yelp, people are looking for is validation that they’ve been heard,” he said. “Many people complaining are just saying ‘listen to me.’ The worst type of customer complaint you can have is the one you can’t hear. Then it just festers and grows and nothing is solved.

“Nothing’s changed,” he added. “We do business with brands and businesses we trust. People are pretty forgiving if a business owns up when a mistake is made and just says it will do better.”

However, this doesn’t happen often enough, which Stratten traces to companies with multiple locations run by individuals.

“You may have a corporate or brand voice and style. But with different managers or owners it’s hard to react quickly on a regional level – if at all. It’s important for the corporate side to monitor those things so you can have a common brand voice.

“Customer expectations have reached real time levels…but you have to equip employees with the ability to solve problems.”

“If you tell a customer something will be fixed and it isn’t, you’re making matters worse. You can’t monitor every location all day. You need an air traffic controller for the brand who looks, listens, and delegates appropriately by telling stores to handle issues and follow up with the customer,” said Stratten. “When you run a store you can have a 1,000 things on your plate every day. Having someone with their ear to the ground is very effective.”

Brands like Taco Bell and Zappo’s have done this very well, according to Stratten, adding that some airlines have also been effective. This can be surprising considering that everyone on the planet is bonded by three things – no one likes their cell phone company, their bank or airline.”

In fact, he noted that banks and airlines have been the leaders in receptive responsive to their marketing.

“I walked off an international flight recently when I realized I left my suit hanging on a coat rack in the plane,” Stratten recalls. “I couldn’t turn around so I sent a note on twitter to American Airlines. Within three minutes they were on the phone with someone on the plane who actually beat me to baggage claim with my suit.”

To Stratten, the worst thing is when someone on a social media account says they’re sorry and gives you a number to call.

Stratten believes an increasing number of companies are into real time problem solving.

“Customer expectations have reached real time levels,” he said. “But you have to equip employees with the ability to solve problems.

A lot of brands have people running social media, but a lot of them still give no power to the people running these accounts.”

So, he continued, they tell you to go to the website and file a comment or call another number.

“You want to be able to answer customer issues on the communication platform they originally chose because that’s where they are comfortable,” he said. “You want customers to think they are talking to you – whether you’re Delta Airlines, Kroger or Whole Foods – not Kevin at a customer service center in Dallas. The power to do things is the level a brand ambassador on social media should be given.”

Are companies getting the message?

“I don’t think they are,” he said. “A lot of retail businesses retail would love disruption to go away and go back to the time when the only way to get something was to go get it. Amazon screwed that up for everyone.”

Stratten shared how he ordered an item online and they said it would take four to six weeks.

“You expected shipping to take that long 15 years ago,” he said. “Now, we won’t buy something if it can’t get here tomorrow. Humans have a base need for instant gratification.”

You can blame it all on Amazon, but retailers have marketing and branding opportunities every day at their stores, said Stratten.

“Everyone walking the aisles is evaluating us,” he said. “That’s why I find the secret shopper industry interesting. We try to be on our best behavior we know they’re in the store. But in reality everyone’s a secret shopper. However, those people don’t just tell your boss. They tell the world.” ■