When it comes to retail, 2019 is fittingly the Year of the Pig. Here's why...
In 2018, one trend emerged that stands above all others. It’s one that stands aside from the same old trends of the past few years being that ecommerce is growing and experiences are increasingly important. It’s faced setbacks through highly publicised cases of misuse and privacy breaches. It’s seen the incapable and lazy ignore its existence and opt for the safety of the known to their own detriment.
The trend is the importance of data in becoming a truly customer centric business. More than a trend, it is unequivocally the game changer for retailers and is set to be the most important prediction for businesses wanting a competitive advantage in 2019. So why aren’t more businesses getting on board?
Well, the less than 1% of organisations doing it in the world will tell you it’s not easy. And that’s why when it comes to 2019 being the Year of the Pig in Chinese Zodiac, we’ll see what kind of pig every business is.
There will be those that live up the domestic farm pig’s reputation. They will be lazy, gluttonous, dirty and a bit simple and enjoy continuing to play in the mud. And sadly, when it comes to the end of their days, they will be delicious and cheap for someone to come along and eat right up. They will be the businesses that continue to buy data and hand it right off to another third party rather than own the relationship with their customers. They’ll use data to advertise rather than engage. They’ll keep hungry for new customers rather than retaining those they have. They’ll be lazy with their tools while their competitors work hard at gaining an advantage and they’ll stay in the discount cycle wars, getting lower and lower until they can’t dig themselves out of the mud anymore. Eventually they will face the inevitable ending of being caught, put out of their misery and, well, for some they may even be carved up and the best bits sold off.
Then there will be those that are wild boars. They won’t be tamed and hand fed, nor will they become lazy, dirty and complacent. They’ll be hard to catch; too fast and too muscular and fierce out in front of those looking to hunt them down. They’ll march bravely ahead, strike violently and have a hardened impenetrable skin. These businesses will be the ones taking the harder path to a wider gain. They will own their relationships with their customers and have no need to take hand fed data from a third party. They will use their intelligence and their data as their strength, knowing what their customers want before they do, delivering it ahead of the competition, and owning a relationship that cannot be replicated nor penetrated. And in the end, while they may be hunted, they won’t be caught and they won’t face the same fate felt by their lazy counterparts.
So why would any business choose to be the lazy pig? Well in short, because being lazy is easy. It’s a well worn and predictable path and it’s one that is deeply rooted in legacy. In Australian retail, it’s unfortunately common. We’re a nation of legacy systems, too hard baskets and a deep seated fear of change. Ironically it’s this seemingly risk averse attitude that is leaving us at the biggest risk of all as globalisation removes geographic advantage and opens the world’s businesses to us with the click of a button.
Which begs the question, if it’s easy to be a lazy pig but the outcome is so dire, what makes it so hard to be a wild boar if the rewards are so great? The answer is that the shift from a lazy pig to a wild boar requires a cultural change so great that many businesses are paralysed by the possibilities and the work required. It demands not only a shift of technology and tactic, but also attitude and alignment. The entire organisation must be willing and armed to change everything they do and every way they behave in order to become truly customer centric. From the top down, the organisation must realign it’s thinking to start with the customer and not the product it’s selling. It must use it’s own first party data which is often siloed, disparate and incomplete. It must understand, analyse and determine a path forward for the brand, its promise, its product, its values, its experiences and most importantly its customers and prioritise these above their advertising, their perceived wealth and their shareholders.
It can seem overwhelming. For many businesses, they are going with the flow. Some may not be lazy pigs, but they are almost certainly domesticated. Most will have their staples that make them feel safe like the expensive and complicated marketing platform that works with their over engineered and integration averse POS and the CRM that provides little in the way of data insights. Instead they rely on the third party data of affiliates and media buyers to boost their advertising reach to find “like” audiences to the ones they perceive they have using only the demographic and subjective data they have scraped together from each system to define “the customer’.
Perhaps it’s because some believe you’re only as good as the tools you have that so many overcompensate with the systems they use because there are very few who are using all of these to their advantage and instead they continue to go with what they know. Often, despite all these seeming creature comforts, this leads to competing on little more than price. And like the pig being hand fed on the farm, they eventually find that although comfortable, they are unable to move and stuck deep in the mud.
The wild boars, though facing what seems to be more risks on the surface, are in reality more likely to survive and thrive. They aren’t hand fed via advertising and third party data. They’ve used their own knowledge to identify how they will survive. By owning the relationship with the customer, they have everything they need right in front of them. They understand their behaviours, needs and wants and know this is far more valuable than identifying just what they look like and where they live. They see their customers as individuals and they behave accordingly. Their business pivots on the information they exchange. Their food source as it were, becomes easier to identify and their ability to capture it becomes more honed. The individual customer is delivered value through products and services that meets their needs when they want it, and how they want it. In exchange, they provide the business with revenue, loyalty, advocacy and data for their future decision making. As a result they will continue to thrive and stay ahead of those that hunt them.
Life as a wild boar is rewarding, but finding that freedom beyond the farm gate requires a leap of faith and forward thinking. Start with pulling yourself out of the mud. Don’t get trapped in the discount cycle and compete on price alone. It’s a race to the bottom and you won’t move from there. Once you’re out, remember the only way to keep moving forward is to not be lazy. Don’t maintain the status quo just because it feels safe. Investigate your ecosystem, look for more nimble tools and stay agile. And lastly, don’t be hand fed by third parties. Own your own data and relationships with your customers, see them all as individuals and deliver them personalised and valuable experiences. Plug the gaps in the data, bring it all together into a unified customer data platform to make delivery of these experiences easier and start to learn and focus your business on the insights your customers provide.
It will take effort, but it will be worth it. So in 2019, take a look at your business and decide which pig you will be this year.