With online buying on Amazon, the whole definition of “convenience” has changed.
“Seventy-four percent of consumers begin their product searches on Amazon,” said Doug Stephens, author and founder of Markham, Ontario-based consultancy Retail Prophet. Stephens spoke on The Retail Archetypes of the Future at CSP’s Convenience Retailing University in Nashville, Tennessee, last week. “Fifty-six percent of consumers say if they were only able to buy products from a single store, it would be Amazon.”
While retail is not rocket science, Stephens said, “We’re also dealing with new social constructs, through the pandemic and coming out of the pandemic,” he said. “More are working from home, in addition to dealing with all the new problems the industry has to grapple with. Twenty-five years ago, ‘convenience’ meant it was near where you needed it to be—along heavily traveled routes. But then the stakes went up and convenience had to get into the fresh or prepared foods business, and some ramped up even more, getting in the restaurant business.”
Competition Fierce
Stephens pointed out how strong competition has become, with Walmart offering pharmacy while Costco sells gas and will help customers plan vacations and install heating, ventilating and air conditioning (HVAC) systems.
He then pointed out how attention spans have dropped from 2.5 minutes in 2004 to 47 seconds in 2023, then noted that 70% of programmatic advertising, which uses technology to buy and sell digital ads, is never seen by a consumer.
Why are the ads not seen, he asked. “Sometimes ads just don’t show up,” Stephens said. “And even if an ad gets seen, the problem is the consumers don’t have the attention, time or wherewithal to care—and I mean that sincerely. It’s not that advertising isn’t good. It’s they don’t have time or attention.”
What To Do
“It’s not just convenience that’s under siege, it’s all categories: toys, hamburgers, furniture, beauty, you name it,” he said. “The competition for consumer attention has never been more intense.”
The problem in retail today is that offering a level of selection along with convenience, price value and quality products “is not a winning recipe anymore,” he said.
F.A.T.E.
“So how can you win against all these forces in the marketplace?” he asked. “My theory is that winners do something other businesses don’t. Winners embrace what I call ‘FATE’.”
This acronym begins with “F”: Focused Purpose.
“Do not try to be all things to all people,” he said. “Don’t try to appeal to all equally.”
A slide showed a quote from Steve Jobs: “Focus means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things we have done.”
“We ask the client, ‘If your brand is the answer, then what’s the question?’”
Stephens said, “Purpose is the new positioning, not talking about corporate values. When I say ‘purpose,’ I’m talking about what is your value, your reason for being? What do you contribute that no one else can (from the consumers’ perspective)?”
In his work, he said, “We ask the client, ‘If your brand is the answer, then what’s the question someone is asking out there that you and you alone are the exclusive answer to in your category? If you can figure that out, those are the keys to the universe.”
Point to Purpose
The second letter, A, stands for Animate the Purpose.
“Once a company has landed on its purpose, it should animate that purpose across every step of the consumer’s journey with your brand,” he said. “Remind them of the value that you contribute to their lives.”
Next is the T, standing for technologically enabled.
“Leverage the technologies and enable that purpose to come to life in the palm of the hand of the consumer in all your messaging,” he said.
Finally, “and perhaps most importantly,” he said, is the E.
“Embed the purpose into every aspect of the organization,” Stephens said. “It should be what you start every meeting with. It should be what you measure your effect on that purpose and your achievement against that purpose.”
Motivating Employees
In a slide titled Purpose Powers People, a stat revealed that at companies that have clearly defined and communicated how they create value:
- 63% of employees say they’re motivated, versus 31% at other companies
- 65% say they’re passionate about their work, versus 32% elsewhere
- More than 90% of them deliver growth and profits at or above the industry average
With purpose, “Employees will be happier and more productive, and you make more money,” he said.
Amazon’s focused purpose is to offer the highest convenience, while Walmart’s is to offer the lowest prices.
“Walmart saves me money,” he said. “Their one purpose guides other choices.”
Regarding the future, he said, “People say nobody can really predict the future, and I agree. Futurism is about understanding and being honest about what is happening now and using that knowledge to engineer the future that you want.”
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