Retailers must provide IMMERSIVE shopping experiences. If a retailer wants a shopper to take time to visit a brick-and-mortar store, they need to provide education and/or experience, ideally both. The days of utilitarian stores and shopping have been displaced by shopping online and home delivery.
As part of my series about the “How To Create A Fantastic Retail Experience That Keeps Bringing Customers Back For More”, I had the pleasure of interviewing Gary Hawkins.
Gary Hawkins has lived his career ahead of the curve, putting him in the right place at the right time to help guide the fast moving consumer goods retail industry into the future during a time of exponential technology growth using never-before-available capabilities to innovate the future of shopping. Hawkins is the Founder and CEO of CART (Center for Advancing Retail & Technology). He is also a strategic advisor with Birdzi, a provider of personalized digital customer engagement solutions for grocery retailers.
Drawing on his work advising leading companies around the world, Hawkins is a regular guest lecturer at Georgetown University’s McDonough School of Business and keynote speaker at retail conferences in the US and abroad. Hawkins is the author of three books including the latest, “Retail in the Age of ‘i’,” which explores the future of retail propelled by the exponential growth of technology. Retail Mindsteps serves as Hawkins’ personal blog and is a repository of myriad articles and papers written for industry publications, in which he distills the complexity of tech-fueled retail innovation into digestible and actionable insights.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I literally grew up in the grocery business, my family owned a couple of stores and a wholesale business. I launched one of the first loyalty programs in the U.S. supermarket sector 28 years ago and helped lead much of the early learning around customer data, behavior, intelligence and economics. After speaking at retail conferences in the U.S. and then around the world, I assisted prominent retailers in the U.S., Europe, South America and Japan with developing ‘customer intelligence.’ My work then shifted to brand manufacturers as companies like P&G, Unilever and others asked me to help them develop shopper-focused strategies and collaborate with retailers using all of this new data. During this time, technology was becoming more and more important and I was pulled into the tech world as new capabilities enabled new ways to do retail.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
Two people stand out: The first is my wife, Heather, for supporting me while I was doing all of this work and traveling extensively around the world while she stayed home raising our four children. I was so busy that she kept a picture of me taped to the refrigerator door to remind our kids what their father looked like! I could not have done what I have without her help and support.
The other person is Brian Woolf. Brian researched and produced a Coca-Cola Research Study back in 1994 that broke open the whole area of frequent shopper programs. The study showed the true behavior of shoppers based upon the data gathered through retailer programs. It was Brian who brought me on stage with him at retail conferences to share my experiences and learning, starting me on a path to being a keynote speaker at retail conventions and conferences around the world. It was also Brian who encouraged me to write my first book, eventually leading to others published here and internationally. I am grateful for his guidance and friendship over the years.
Is there a particular book, podcast, or film that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
Instead of a book or film, it was actually an experience years ago that had a major impact on me. I shared that experience in a recent paper I released, “Retail 4.0: The Age of Metamorphosis.”
The experience was an Outward Bound biking trip I did years ago. Towards the end of the trip, I took a bad fall, injuring my shoulder and ribs. Having trained for months getting ready for the trip I resolved to at least try to do the final day century ride, a 100-mile ride. It was only after I made it to the end and returned home that I learned I had fractured my shoulder, cracked a couple of ribs and needed stitches in my head. My takeaway was simple: We can all do much more than we think we can. Our limitations are in our heads.
As it relates to retail and technology, one of the largest challenges a retailer has is believing they can transform their businesses and processes to remain competitive in a time of growing disruption and digital change. They can.
What do you think makes your company stand out? Can you share a story?
In my role as CEO of CART (Center for Advancing Retail & Technology), I think it is the unique perspective my team and I bring to the retailers, wholesalers, brand manufacturers and technology solution providers we work with. A deep understanding of retail along with our experience across the supply chain and a view into new tech and innovation combine to give us unique perspectives. Two of my kids work with me and I think that a family business works well in retail, which has so many family businesses.
Relative to my role as a strategic advisor to Birdzi, I again believe I bring some unique experience. In 2005, I created the first true, personalized marketing capability for mass retail by combining an early model of the first automated promotion targeting engine, created years ago by a startup that sought me out, with a surrounding tech platform. I used our retail store for testing and piloting that technology, before ultimately selling it to a tech company. During that time, I wrestled with all the challenges retailers grapple with when evolving from a product-based company to a true customer-focused retailer. That experience and knowledge have helped inform my work with Birdzi, where I get to work with an amazing team to leverage big data and AI to reinvent retail.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
The same ‘tips’ I have shared with our kids as they were growing up. Find something you love to do, do it to the best of your ability, and you’ll find success. Loving what you do and being passionate about it helps avoid burnout.
Ok super. Now let’s jump to the main questions of our interview. The so-called “Retail Apocalypse” has been going on for about a decade. The Pandemic only made things much worse for retailers in general. While many retailers are struggling, some retailers, like Lululemon, Kroger, and Costco are quite profitable. Can you share a few lessons that other retailers can learn from the success of profitable retailers?
While many retail sectors have indeed suffered during the past year, certain sectors like food retailing have actually thrived. Certainly, grocery retailers had many headaches to work through and overcome, like limiting the number of people in the store and implementing new cleaning processes. However, nearly all supermarket retailers have seen substantial sales increases. Other retailers, like those involved with health & wellness, fitness, etc. have also seen strong sales.
I think there are a couple of lessons that can be learned. The first is the ability to innovate in real time. Supermarket operators had to adapt to rapidly changing guidance from health officials, oftentimes with different guidelines and regulations by state or even country. When the pressure is on, people and organizations can often do far more, far more quickly, than they believe.
The second lesson relates to the importance of being online. Nearly every form of retail now has a digital component, often selling online. Maintaining current and accurate information along with providing a good user experience is key to being successful in the digital world.
Amazon is going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise retail companies and eCommerce companies, for them to be successful in the face of such strong competition?
Competing purely on price is often a race to the bottom and a race that will typically only have one winner. Today, shopper motivations are far more complex and are not simply driven by the lowest price. In many areas, especially food, shoppers increasingly want to know where products come from and how they’re produced and packaged. This kind of transparency is quickly becoming an expectation and technologies like blockchain are helping provide confidence in products and a view to the supply chain.
Retailers, whether in-store or online, need to provide relevant marketing in their communications with each shopper; this includes relevancy in special promotions — both products and prices. And in any retail sector that relies on repeat business (think food, clothing, etc.), it is important to build relationships with shoppers to move the competitive battle away from just price.
What are the most common mistakes you have seen CEOs & founders make when they start a retail business? What can be done to avoid those errors?
Historically, before online shopping became so prevalent, the location of a brick-and-mortar store was of prime importance. I’ve seen many retailers make poor choices, or rationalize poor locations, which resulted in poor performance.
I’ve also seen many business people make mistakes around pricing, not fully understanding their costs and logistics, and setting prices too low to be profitable.
I would also add a failure to invest in enough — and the right — marketing. It’s so important to develop a story around your retail business so that shoppers remember it, something that creates a reason to shop there beyond just price. Maybe it’s about unique products, or it’s about unique services. There’s always a powerful story, the work lies in understanding it. Every founder has a reason why they created the business they did — inevitably their ‘story’ lies in that reason.
This might be intuitive, but I think it’s helpful to specifically articulate it. In your words, can you share a few reasons why great customer service and a great customer experience is essential for success in business in general and for retail in particular?
Any business is tough; retail is often competitively brutal. In nearly any retail sector, providing good quality products at a fair price is table stakes. To be successful, companies must provide great service and experiences. I have seen data from retailers of all sizes in markets around the world that reinforce the idea that acquiring a new customer is expensive. It is far more profitable to retain and grow the shoppers you already have.
We have all had times either in a store, or online, when we’ve had a very poor experience as a customer or user. If the importance of a good customer experience is so intuitive, and apparent, where is the disconnect? How is it that so many companies do not make this a priority?
More often than not I think breakdowns occur because the retailer does not have the systems in place to help their associates ‘know’ and understand their customers. Sure, any given retail associate can be having a bad day and not come across well to a customer. But I believe that the majority of associates do want to do the right thing, they want to help make that customer happy, but they are sometimes challenged by systems and processes that work against them in the specific situation.
Can you share with us a story from your experience about a customer who was “Wowed” by the experience you provided?
Years ago, when I was a practicing retailer and CEO of my family’s operations, we were in the early days of our loyalty program and beginning to understand the value of our best customers. For example, in grocery retail, the top 30% of shoppers ranked by spending generate an estimated 80% of a retailer’s total annual sales. And those shoppers also provide an even higher portion of the retailer’s total gross profits.
Understanding this — and wanting to move away from just price-based competition to develop relationships with our shoppers — we held a special thank you party at holiday time for our top 100 customers and their significant others. We closed the store early one evening between Thanksgiving and Christmas, invited our customers in, set up some beautiful buffets just to say ‘thank you.’ We didn’t sell anything that night, that wasn’t the purpose. That event generated more word of mouth from those customers than anything I think we had ever done. Even several years later I would overhear customers talking about that special evening.
Did that Wow! experience have any long term ripple effects? Can you share the story?
The special party event created strong loyalty between our management team and those top customers. It also drove home how few of those top customers we knew personally. The event drove significant, positive word of mouth for us for years after the event.
A fantastic retail experience isn’t just one specific thing. It can be a composite of many different subtle elements fused together. Can you help us break down and identify the different ingredients that come together to create a “fantastic retail experience”?
I think ‘fantastic retail experiences’ need to provide at least one of the following:
Entertain me: Provide me some unexpected or unusual experience that makes me forget about my daily headaches and surprises and delights me.
Educate me: Teach me something I didn’t know — especially around some product or service I care about. Educate me about that special brie cheese you’re promoting this week. Where is it from? How is it made? What farms are involved?
Recognize me: Know me by name. Recognize my value to you, as a retailer, if we interact or if there is some issue. It is incredibly frustrating to deal with some kind of product or service issue when you’re a good customer and they don’t understand or recognize that. Retailers who have good systems and have this kind of knowledge can turn problems into advantages.
Ok super. Here is the main question of our interview. Based on your experience and success, what are the five most important things one should know in order to create a fantastic retail experience that keeps bringing customers back for more? Please share a story or an example for each.
My last book is called “Retail in the Age of ‘i’,” and in the book, I talk about the five ‘i’s needed for retail to survive and thrive today. I think those five ‘i’s identify the most important things retailers need to focus on.
1. The INDIVIDUAL customer. Many retailers don’t know who their customers are. Other retailers may have loyalty programs but they only focus on the household. I believe that retailers need to know, understand and focus on each individual customer. The world is increasingly becoming tailored to each of us individually.
2. It requires INTELLIGENCE to focus on, market to and service each customer. That intelligence lies in big data, certainly customer purchase data, and the ability to develop insights and understanding from the data in service to the individual customer.
3. To gain and make use of that intelligence requires INTEGRATION of systems and technologies across the retail organization. How well a retailer can make customer-based analytics and insights available to operations, merchandising, marketing, etc. directly dictate the experience that the retailer provides. The ability to communicate and gain feedback from each individual customer is a fundamental requirement.
4. Retailers must provide IMMERSIVE shopping experiences. If a retailer wants a shopper to take time to visit a brick-and-mortar store, they need to provide education and/or experience, ideally both. The days of utilitarian stores and shopping have been displaced by shopping online and home delivery.
5. The last ‘i’ is INNOVATION. Technology is moving faster every day, bringing new capabilities and innovation into the retail industry at a growing rate. Retailers need to be aware of all these new capabilities, especially as new tech relates to new shopper expectations.
Thank you for all of that. We are nearly done. Here is our final ‘meaty’ question. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I would love to see our government — at all levels, from local to federal — adopt some of the basic precepts of loyalty that I learned in retail. I believe it’s important to invest in local businesses that have been around for generations and helping them grow, rather than using tax incentives to lure new businesses to a locale. I believe that if the government focused on helping local and regional businesses grow, rather than providing massive bailouts for failed businesses or using massive tax incentives to create artificial economic environments, it would benefit everyone. These steps would lead to more jobs and ultimately more tax dollars being generated in a much more sustainable way. The same concepts apply here as they do in retail; retailers should recognize and invest in their regular shoppers, instead of always trying to gain new shoppers to their stores.
How can our readers further follow your work?
- Learn more about me online: https://www.advancingretail.org/
- Follow me on Twitter: https://twitter.com/hawkinsretail
- Connect with me on LinkedIn: https://www.linkedin.com/public-profile/in/gary-hawkins-20830b4
This was very inspiring. Thank you so much for the time you spent with this!