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Why Canadian Retailers Must Own the Customer Experience in the Last Mile: George Minakakis

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By George Minakakis

Every day a new generation of ideas emerge meant to provide consumers with more shopping options under the guise of convenience and a better customer experience. We now have a plethora of choices and more being developed on where and how to shop. Some are meant to draw consumers away from the physical retail world. Others are just offshoots of a brand or shopping concept trying to redefine or preserve themselves in a consumer world demanding more free time.

Over the last few years, we have noticed the line between brick and mortar stores and e-commerce blurring. We have also heard about traditional retailing becoming a hybrid model integrated with all their digital strategies and social channels. Of course, what else could it have become?

When e-commerce grew up into a more serious player, the beliefs were that it eliminated the middleman and filled the consumer’s needs for greater convenience. Service was not a big concern for e-commerce — the bar in physical retail was low to begin with. They were right then, but not so much today. Instead, it brought in a new middleman — courier services are one of them — but they can’t deliver the brand message.

Traditional retailing was also about convenience in the not-too-distant past. That’s why developers built malls, and thousands of stores were added globally to reach a time-starved public. We all know how that has been playing out. Unable to grow their revenue further, many retailers resorted to lowering costs. We all knew that you couldn’t succeed in retail by cutting service.

While writing my new book, I looked at online marketplaces and how innovative and effective they are as a growth vehicle. Many are novel innovations; however, 90-95% of all innovations fail. For marketplaces to be successful you need:

  • an attractive business model that works.
  • an adequate number of potential buyers and sellers.
  • to have the right target market identified.
  • resources (financial and intellectual) to recover from setbacks and demands of growth.
  • to build trust in the process from beginning to end, for customer satisfaction.

The growth of online marketplaces appears to make up for lost share to other behemoths and/or perhaps, keep your piece of the pie. Saks Fifth Avenue and Hudson’s Bay are on their way to launch and grow marketplaces. Walmart and Best Buy are legacy-branded retailers that have created marketplaces as well. Etsy, eBay, and even Craigslist, for example, are more peer-to-peer marketplaces.

Everyone wants a piece of that consumer pie, whether it’s new or resale.

I haven’t forgotten about Amazon. In 2020 they picked up 50 million new Prime members. Once a member is on their site, they order within three minutes. Financial analysts who follow the retail sector, say; “If you want to know where the consumer is going to be and how they will shop post-pandemic, keep close tabs on Amazon.” I agree with them.  It doesn’t stop here; Amazon has ordered 100,000 electric vehicles. Why? Because they understand the importance of owning the customer experience from beginning to end. I can’t emphasize enough how important it is that a brand is appropriately represented at the customer’s door. Amazon is not alone. Walmart has also invested in CRUISE autonomous vehicles. With the plan to own that last mile and their brand ever-present.

Retailers must own that last mile.

A small grocery upstart called ‘Fridge No More’ offers 15 minutes local delivery on E-bikes.

The staff is employed by the company they pick, package and deliver products. It may be unique, but it is a game-changer for anyone in high-density markets looking to serve their customers and control the entire experience.  The idea here, of course, that you don’t need to be locked in by the status quo.

To be clear, owning the last mile doesn’t necessarily mean you need to own the logistics. You need to understand and respond to how your product is delivered and presented to customers — making the assumptions that a customer’s past experience with your physical space will be enough and that they will understand that it’s just the process of shipping. Is a mistake! No different than cutting productive labour hours from stores.

George Minakakis
George Minakakis is the CEO of Inception Retail Group and the author of a soon-to-be-released new book, “The New Bricks and Mortar – Future-Proofing Retail”.

Marketplaces are the other middleman. Some of them are retailers who will be acting as online malls. This competitive landscape will see new entrants, and as malls, plan to add their marketplaces. All of this will only add more confusion for consumers. Whom are they buying from? How does that brand protect its relationship with its customers? They can’t! Marketplaces control the relationship with the consumer, not the retailer or seller. For marketplaces to be an ideal venue for branded retailers, they need to behave like an open-source marketplace where brands are visible. After all the digital transformations and developing a presence on social channels, losing your brands’ online visibility is high.

Controlling your brand presence in the last mile is retail’s next big challenge, or retailer’s risk having their futures controlled for them.

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