While the questions that plague the retail industry never change, the answers are constantly in flux and evolve to respond to the broader landscape. It is the lack of stagnation in retail that has Nick Gray, a retail specialist who earned his stripes at Adidas, Nike and Westfield, believing that “retail is not rocket science, it’s harder”. At the 2024 Retail Fest in the Gold Coast Gray spoke to the defining camps that brands misattribute themselves to and as a result, fail to identify thei
y their purpose which drives sales.
Retail is camping
According to Gray, retailers distinctly fall into one of two camps; cognitive default or emotional default.
“I will be bold enough to say that as a retailer, a few of you are not in one of these camps, your time is going to be a little bit limited,” said Gray.
The default cognitive camp is made up of retailers that have consumers automatically going to their online or offline stores like ‘JB Hi-Fi’ for technology, ‘Coles’ for groceries, ‘Bunnings’ for hardware or ‘Rebel’ for sporting goods.
Brands that fall into the default emotional camp rely on purchase decisions being made from emotional connections and feelings, not automatic recall.
There exist four buckets within an emotional default brand that they can play in, culture, entertainment, expertise, or design.
“The challenge we have is that customers that a lot of brands try to play across multiple buckets and what that does is it actually creates a cognitive dissonance, and that is confusing the customer,” stated Gray.
“So what you have to do is, make sure you choose one of these, stick with it, focus on it, and really drive, invest in it and let it be your Northern Star,” he added.
The “Northern Star” Gray refers to is the purpose that should drive a retail brand outside of generating profit – the best way to define purpose is if a retail brand is the answer, what is the question?
For example, which brand aligns with my values? Patagonia, where do I take my kids to have fun? Camp, where can I go to get the absolute best advice? Hodinkee, where can I find the best design? Dyson.
Gray maintains that brands should use their purpose to carve out a place in the retail landscape and focus on providing value for the consumer.
“And the reason that that’s so important is that we’ve shifted away from focusing on selling products and focusing on ‘what is the feeling that we are selling?’,” said Gray.
“Because once you figure that out, then you’ve really got to start to build your community around that,” he added.
Path to purchase
For Gray, the understanding of a brand’s default camp and purpose is foundational to building a retail experience that connects and converts.
With points of sale for retail both online and offline it has become increasingly more difficult to map the customer journey from first discovery to final purchase.
“It used to be very, very linear, logical if you will get started at home, you do your research, you go to the store to purchase, and now it’s like flying the bottle,” said Gray.
“We have no clue where the customer is out on their customer journey anymore or part of the purchase,” he added.
Consequently, some retailers have begun to undervalue the role of their bricks-and-mortar operations if the return on investment can’t be measured with profitable in-store purchases.
“We’ve seen this blend of online and offline take place for a long time – one of the things that we have seen is the role of online and offline, literally switching,” explained Gray.
“Online now is your store, it’s all around convenience, efficiency, and ease for the customer – But your physical stores, your physical space, is your most manageable, tangible, measurable marketing tool that you have,” he added.
This is part of the phenomena that Gray describes as “invisible PR”, where experiential stores have the ability to turn visitors into consumers and consumers into ambassadors.
But to create an intangible connection with consumers retailers have to envision a physical location that creates a feeling in line with their value-driven purpose.