IN A RECENT conversation about business changes over the past two decades, I was asked which I thought was the most disruptive: e-commerce, digital clienteling, social media, millennial shoppers, lab-grown diamonds, personalization, responsible business practices and supply chains or industry contraction. I tried to imagine ranking them in order of impact and realized that it wasn’t possible. Or rather, that it wasn’t instructive. Each of these developments has been highly transformative, but none of these elements alone is responsible for the systemic industry change we have experienced.
Rather, it is the convergence of all these developments that has wrought so much change, not only in our industry but across all industries. It would be simple to summarize all this by saying “technology” is the big disrupter, but it’s not the whole truth. The big shift is that we consumers have changed as a result of technology — and in the process of our own evolution, we disrupted ourselves.
Each time a new technology was released, we learned to use it. Over time, not only did our learning curves become shorter, but our expectations of what we could, even should, be able to do as a result evolved. Each time that leading online merchants introduced new selling features and technologies, each time that Google changed its algorithm to get closer to the searcher, and with every social media channel innovation, our experience and expectations of what it means to shop expanded. Add a pandemic to supercharge learning curves, expectations and social awareness, and the recipe is complete.
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In my opinion, the biggest disruption of the past 10-15 years is the transformation of the behavioral dynamics of shopping and marketing. And the risk is that we get so fixated on the specific technologies of change (you need a website, you need a social media strategy, you should have technology kiosks in your store) that we miss the retail psychology of these changes.
Retailers who take the time to focus on a clearly defined target audience and who authentically attend to the psychology of that target audience will win. There will always be a place for mass retailers who sell everything to everybody … and that model is dependent on price competition. But for specialty retailers — and luxury goods sellers specifically — the winning strategy will be to identify closely with a definable target, then create the experience that’s meaningful to that target, keeping in mind the ways that shopping and buying have changed not only our behaviors, but the desires and psychology behind those behaviors.