Customer experience differentiation is at the core of retail innovation

The rise of DTC, net-zero commerce, hyper-local shopping, dark stores, same-day (if not, same-15-minutes) delivery, and brand drops mark the point of no return for mainstream retailers. Over the past decade, retail has somewhat sleepwalked into paradigm shifts that are shaping the modern world. The fall of Arcadia Group is just one example of what happens when you lose the script.

Now, being in the midst of the pandemic and balancing on the brink of collapse has pushed many to reevaluate their priorities. What previously seemed merely important (digitisation, personalisation, omnichannel, data, AI) has become urgent and triggered immediate restructuring initiatives. It also raised questions. How should one rethink its increasingly digital relationships with customers? What is the right way to translate brand values into omnichannel experiences? How can a brand play a bigger role in people’s lives?

I remember the days when the words “customer-centric approach” sounded like a revelation. A decade ago, the idea was actively discussed but rarely adopted. It puzzled middle management and went against the grain of corporate silos. Ten long years later traditional retailers are starting to see the world through the eyes of their customers and act accordingly. They are moving much faster too.

The new generation of e-commerce platforms from Salesforce and Adobe to Shopify and the fresh breed of in-house and partner talent are accelerating this change. What took years before, is done in months now. But the key challenge remains – making the transformation result in a net new value and creating meaningful and long-term differentiation.

The cognitive load for retailers is heavy. Revamping, optimising, and synchronising elements of the value chain can seem daunting, fragmented, and short-lived. A piecemeal approach rarely works and broader transformation programs are needed to create a fly-wheel compounding effect. Brand experience plays a key role here. A single, unifying lens that informs business decisions, defines product roadmaps, and inspires a company’s culture. For modern retail disruptors, brand is an operating system, and it goes beyond just marketing. It’s a thread that strengthens relationships across a customer’s journey and unlocks innovation at the value proposition, organisational, touch point and outreach levels.

Take Nike, for example (a client of R/GA’s). Recently named (once again) the most valuable apparel brand, the retail pioneer had created a playbook for how brands should future-proof their models and evolve relationships with customers. From articulating the core belief of “if you have a body, you are an athlete”, to creating an ecosystem of digital products and services such as Nike Shop, Nike Running Club, Nike Training Club, etc., to structuring marketing communications and community programs, Nike’s razor-sharp focus has always been on empowering their cohorts and supercharging shopping, training and life moments.

This playbook has been largely adopted by the new economy players too. From Peloton to Food 52 to Savage x Fenty to Glossier and StitchFix, what’s common is how these brands drew inspiration from communities and leveraged the notion of identity to develop distinctive, long-running propositions in otherwise commoditised spaces. Having attracted volumes of venture capital and substantial customer interest, the new wave retailers are redefining how brands talk and behave with audiences that demand authenticity, purposefulness, and value.

Modern retail will be driven by leaps in technology and customer expectations. Better deals, convenience, and faster delivery times are table stakes now. To win, brands need to develop 360 relationships with their customers and meaningfully support them on their day-to-day journeys.  Cross-channel recognition, personalisation, and experience orchestration (given the permission) will need to result not only in a more tailored and connected shopping experience but increasingly in a coherent narrative that provides a sense of purpose and elevates your brand to a more aspirational (and premium) place in customers’ hearts and minds.

Ilia Uvarov is executive creative director and retail expert at R/GA