Digital transformation is disrupting every industry in the world today. Online retailers are driving customers away from brick and mortar retailers. Digital disruptors use data analytics to find out what customers want, when they want it and how they want it. In the next two years, the majority of consumers (60-70%) will be millennials. Yet the majority of retailers won’t survive if they don’t learn, grow and adapt to their needs. Companies need to create the right products and customer experiences to appeal to this growing demographic.
However, many large established retailers disagree:
“Our customers want to touch and feel our products before they buy.”
“They want to make sure our products fit and feel right.”
“They are loyal to our brand.”
“They don’t want to wait for delivery of their purchases, and then wait again for an exchange.”
“They like to come in and take a look around and talk to someone face to face.”
Will millennials feel the same way? Or will they value the convenience of online shopping more?
Industry experts predict retail stores in the next 10 years will become smaller and more tailored to customer needs. Stores will become shopper-centric, concerned with creating valuable in-store experiences. The seamless integration of online and offline media channels, will also be a major focus.
How will retailers learn what their customers need and want?
Integrating millennial insights
One retail company that successfully navigated the digital precipice is English luxury fashion brand Burberry. When Angela Ahrendts started as CEO in 2006, Burberry was struggling with a brand that had lost its product focus. Recognising that 70 per cent of her employees and customers were under 30, Ahrendts launched The Strategic Innovation Council. This monthly reverse mentoring forum connected the next generation of great thinkers with the Senior Executive Council. The council allowed ideas to flourish. The executive team turned the best ideas into brand-enhancing initiatives.
The results were dramatic. Over the next 8 years, Burberry’s global revenue rose from £743 million to £2.3 billion.
What is reverse mentoring?
In 1999, Jack Welch, CEO of General Electric, popularised the concept of reverse mentoring. He paired 500 of his top executives with junior employees to learn how to use the internet. Reverse mentoring connects experienced managers to learn from younger, less experienced staff members.
Since then, many global companies have leveraged the power of reverse mentoring to develop insight-driven cultures. Examples are Target, HP, Coca Cola and Cisco. Retailers that place learning about the customer at the core of everyday practices are better suited to adapt to digital disruption. Using customer insights to discover what customers really want and creating new ways to engage is how disruptors triumph over established organisations.
Retail staff interact with customers all day long. Contrast this with a saturated online environment. Marketers work hard to make sense of masses of data. Retail staff converse with customers about their needs, wants and concerns face to face. They can ask questions, observe changes in buying habits, trends, preferences and likes and dislikes.
Sharing these insights with senior executives in a reverse mentoring relationship from the shop floor is now possible with technology. Creating an insight driven culture can align businesses with the current and future needs of customers, ensuring retailers survive.
Learning and development in the retail environment
Studies estimate millennial employees will comprise 50% of the US workforce by 2020. Surveys show that most millennials place learning and development high on their reason to stay with an employer.
Although many retailers do offer online store management courses, new mobile led experiences are more effective. Staff can step away from customers, speak with a mentor on a connected device and return to the floor quickly. They aren’t required to sit at a desk to complete online training. Retail staff can still serve customers. There’s also no longer a need to upskill at headquarters.
A reverse mentoring technology platform
WERKIN’s tech-enabled mentoring platform facilitates reverse mentoring on everyday connected devices between headquarters and retail staff. Team members create digital profiles of their skills, experience and achievements. Algorithms impartially match senior executives with junior retail staff and multi-disciplinary teams. Learning and insight sharing can occur from the shop floor.
The long-term success of any retailer depends on adapting to changing customer needs. Studies show using insights, diversity and collaboration drives innovation and profit. Listening and learning from younger generations who reflect customers expands senior executive perspectives. Reverse mentoring is creating a cultural shift in many global companies towards more vibrant, digital and profitable futures. WERKIN's reverse mentoring platform can bring together diverse perspectives and encourage a flow of customer insights from the shop floor to senior executives. Knowing what customers want drives powerful retail transformation and can ensure retailers survive and thrive through digital disruption.