Retailers are starting to understand that you cannot control the customer; the customer controls you. In the past it was more about retailers presenting their offerings on their own terms and people didn't have as many options. Now, if retailers want to remain competitive, they have to become customer-centric and invest in giving their customers the experiences they seek.
The term 'customer-centric' is one of the buzz words in marketing speak that is sometimes used rather loosely. A carefully designed and proactive strategic process that puts experiences that customers want in the channels of their choice - very different from the primarily reactive customer focus that typified ways of doing business in the past.
To remain competitive in the modern economy, organisations have to understand that their customers need to be at the centre of everything, and they have to know how to "operationalise" this strategy and how to sustain the engagement into the future.
One needs to stay ahead of the trends and discern which ones are here to stay. Continuous innovation is key in order to keep up with customer demand and to retain customer loyalty - there can be no endpoint, it must be ongoing.
Fuelled by the Internet growth, companies have phenomenal new opportunities and new channels for buying and selling. The Internet has completely taken over the channels by which people can buy things.
A leading global trend in customer-centricity is omni-channel retail. If you are going to be competitive, you have to service the customer via whatever channels they choose to work with - be it through call centres, online or mobile platforms. Companies have to make that leap to invest in all the channels. Store and Internet retail now has to be seamless, with products available on both platforms and delivered from both platforms (usually at a similar cost).
There is a growing movement towards zero inventory stores, where the shop floor becomes a place to touch, feel and experience, but the selected merchandise is delivered from a central warehouse. Retailers do not need to keep a stock of inventory on site and have the flexibility to customise orders before delivery.
This concept is taking off particularly well in 'experience lounges' in electronic retail, for instance, where customers can spend time in the showroom enjoying the high touch experience of the products before they choose to buy. Here the quality of the experience becomes the critical differentiator for securing sales and retaining customer loyalty.
Consumers now also use the Internet to do their research. They know in advance what features to look for and what the prices of products are. The auto industry is a prime example: very few buyers visit a showroom in order to build an understanding of different models offered by a manufacturer. The buyer comes to the showroom to touch and to feel - to validate his or her decision.
The power of social media has also had a profound impact on buying behaviour. Current statistics show that a company today only owns about 22% of the ability to influence the buying decision. People listening to stories from other customers about how they have been treated or what emotions have been experienced influence 78% of the buying decision. This phenomenon has accelerated the importance of a customer centric business model as a competitive differentiator and the onus is on organisations to earn the right to have consumers tell their story.
Many South African companies are showing great leadership in developing customer centric processes. Although there are remarkable innovators amongst global operators, such as Amazon and Starbucks, the advances being made by local retailers such as Woolworths and Pick n Pay, for example is to be commended.
The conclusion is that there are pockets of excellence from which all business leaders in the country can draw inspiration. However, businesses are not adequately designed and leadership is not sufficiently enlightened to make sure that all processes are joined up in such a way that there is a consistent delivery of a defined experience. We are subject to randomness - that's what frustrates people.
