Retail may be undergoing a period of “intense change,” but rather than feel overwhelmed, those in the business should instead look for the many opportunities such change enables.

That’s the mantra of experienced digital marketing executive Sarah Engel, president of January Digital and a strategic advisor to Shoptalk. Engel talked with Inside Retail’s Amie Larter for an episode of the podcast Retail Untangled, recorded on the sidelines of last month’s Shoptalk Fall in Chicago. 

During the podcast, Engel addressed changing customer expectations of brands interacting across multiple channels, changing shopper demographics, and the essential role of customer loyalty and retention, among other challenges.

However, Engel’s overwhelming message is that while many people in retail may feel overwhelmed by the changes, she sees this next retail phase offering many opportunities. “I am an optimist and love retail, so maybe I’ve always felt there’s opportunity.” 

Embracing change starts at the very top, she says. Sharing the Shoptalk stage with brand leaders from ThredUp, Pattern Brands, J Crew, and Fabletics, Engel found a common attitude: “All four were saying they were going to lead the change.”

Technology shifts, and consumers shift. Successful leaders will pay attention to every signal and then be decisive about what change is needed, she explains.

“I’m hearing more than anything from senior-level leaders here that they are being decisive about what the goal is and what that change is going to be, and then leading from the top. They’re not letting it happen to them.”

For example, when embracing technology – especially AI – be decisive about what you build out and why. Ask yourself: What is the end goal from a customer standpoint? What do you want your customers to experience? How can technology enable that experience? Or how does it help internally? And how does it allow these really smart people that I have to do something different and better, to be more creative, to be more strategic? 

“You can let technology happen to you, or you can go: This is exactly how we will go about it. This is how we’re going to shift our organisation,” says Engel.

What customers want

Engel says retailers must carefully observe what shoppers want because patterns and behaviour are changing, and retailers must follow to be at the top of their game. 

She quotes Steve Dennis, who told the Shoptalk Fall audience: ‘Boring retail is what will die’. 

“He is right. If we are going to offer products that aren’t super exciting on a [platform] that’s not exciting and expect people to continue to buy, that’s not the reality of how consumers take in information, of the competitive environment.

“A boring brand is no longer going to be good enough. Be very clear on who you are, what that means, and how you show up in the marketplace, all the way down to your marketing efforts. This is more important than ever because you can’t live in a grey area and not be super clear about who you are and make gains.”

Engel urges brands to focus on their customers’ wants rather than “follow your competitors down the rabbit hole” by matching whatever they do. 

Understand new generations and how they shop

Likewise, faced with changing consumer behaviour, brands can take the easy path and say Gen Z and Gen Alpha shop differently, and ‘this is happening to us’, or they can commit to understanding them. 

Brands need to adopt decisive leadership and build their own path. Saying you will become customer-centric is not enough. Consumers don’t have the patience to wait for brands to change. They want to know what your brand is doing now. 

“Customers need to experience our brands and purchase when and where they want,” Engel continues. “That doesn’t sound like rocket science. However, it is incredibly complicated, especially as you add on [channels].”

Retailers today must have all their data together to know who the customer is and be able to personalise the in-store experience, not just online. If a retailer’s online and in-store systems are not connected and talking to each other, you can’t share that data. That makes it harder to build in-store engagement. There is a human element to retail, says Engel, who profoundly respects store associates. 

“All of those elements are incredibly complicated. But also then, layer on top of that every media channel that you’re running in, social commerce, where they may be transacting and never come to your site. It has gotten a lot more complicated.”

Loyalty, retention and a leaky bucket

In conversations with retail leaders, Engel often hears that brands are finding building and retaining loyalty is getting more expensive and more difficult, that they have a “leaky bucket”. 

She says that where conversations in the past have been anchored on acquiring new customers and achieving loyalty forever, retailers now need to understand the lifetime value of customers. 

“We need to get somebody to make a second or third purchase. We need to have deep respect for our current customers,” she says, rather than “chase the shiny object” and focus on Gen Z or other rising demographic groups.  

Loyalty can also be built by engagement. During Shoptalk, Engel had many conversations about what influence means – celebrity endorsements, the backlash and the expense of getting it wrong when those celebrities do not align with the brand’s values. Does it make sense? Is it authentic, or is it oversaturated now? 

To Engel, such endorsements come back to loyalty. Fabletics, an active lifestyle wear brand, released a range of scrubs for people working in the medical profession. A Facebook group of scrubs buyers was created to support the launch so all these potential customers could talk together as a community. 

“We are shifting our understanding and acceptance of what dictates influence. From a creative standpoint, consumer-generated content is powerful at the most basic level. The [consumers] explain the benefits of your product, they care deeply about it, they are advocates,” she explains. 

• Listen to the podcast to hear Engel talk more about the changing face of retail today, including Fabletics’ unique online experience and its marriage with in-store engagement and why developers at the head office level need to visit stores and shop online to experience the customer pain points personally.