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What Is Retail 3.0?
“Retail 1.0” was the era of the national brands. It was supplier driven through mass media and lasted until the mid 1990s when Walmart entered the grocery business.
“Retail 2.0” saw power shift to the retailers with data drawn from card-based loyalty programs. At the same time, chains applied sophisticated marketing skills to their private brands.
Now there is “Retail 3.0” for the age of the shopper.
“Retail 3.0 is the next-generation retail eco system, driven by relevant marketing to the individual shopper, and supported by real-time marketing and supply chain synergies, all built on a foundation of shopper-identified transaction data,” explains Gary Hawkins, president of the Center for Advancing Retail Technology.
Connecting all the digital retail systems to create more relevant, individualized marketing for shoppers will boost efficiencies for everyone in the supply chain, says Hawkins, also president of Green Hills Market in Syracuse, N.Y.
Shoppers are “bombarded” by irrelevant marketing messages and an abundance of information on the Internet, including social networking. So marketers are looking to retail with relevant individualized marketing as a way to cut through the clutter.
“The store is now being seen as a marketing canvas, driven by shopper insights and shopper marketing. Brands and marketers are searching for new opportunities in-store to communicate with the shopper when they are making decisions and purchases,” Hawkins says.
To deliver the relevance that shoppers are looking for, existing digital technologies need to be integrated. “There are a lot of different technologies and solutions that are already in market and that are coming to market, but what excites us is the opportunity to take all these different solutions that are digital and connect them,” Hawkins says.
“When you do that and then focus on maximizing each shopper’s lifetime value, aligning supply chain activities to that, and optimizing the entire system, it’s a whole new world. We think there is a massive opportunity out there for value creation across the supply chain - for manufacturers, wholesalers, retailers, but also for the shopper.”
But before a retailer or a brand can take advantage of a lot of these new technologies, they need understand their shoppers, their behavior and their lifetime value. “They need to understand what it is they are after, where they are going, and then how to get there, rather than, ‘This is a new cool idea. I’m going to try this technology today,’” Hawkins says.
This kind of understanding gets “put on steroids through the use of some of these new data warehouse tools that enable a retailer or a brand to drill into massive quantities of data very, very quickly.”
This helps them see and understand - almost in real time - what is happening in-store, such as the impact of promotions, displays and signs. Then the industry should be thinking about the implications of true one-to-one marketing as mass promotion starts winding down.
This article was based on presentations by Gary Hawkins at the annual LEAD Marketing Conference, which focuses on Loyalty, Engagement, Analytics and Digital applications.
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