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Retail Relevance Requires Rethinking Customer Connection


Retail is a tough business. That’s not news to anyone who is a merchant, shopkeeper, supplier or landlord.

What is news is what some retailers, brands and startups are doing to leapfrog over the competition in a fiercely hostile environment.

Take Nordstrom for example. Nordstrom sees growth opportunities but as Jamie Nordstrom, head of told the New York Times last week, “We’ve been thinking about where growth is going to come from across all retail over the next 10 years and certainly square-footage growth is not where that growth is coming from.”

To deliver growth in another channel Nordstrom has partnered with Bonobos, the online menswear brand. In the deal Bonobos gets cash and retail distribution. Nordstrom on the other hand gets insight into expertise on email marketing and online retailing – both greatly needed by the 111 year-old retailer.

Look at Vault Denim. A business that’s only a couple years old but is experiencing neaarly unprecedented growth selling designer denim jeans via home parties. Vault has incredibly low overhead but relies on a motivated and energetic league of independent fashion consultants to sell Vault inventory in the living rooms of suburban middle America.

Then there’s Nanette Lepore. Lepore’s designs are red carpet material. But it’s her technology that is off the charts stunning. As early as 2007 Lepore’s customers could stand in front of a special mirror, while a camera relayed live video images of the customer to an Internet site where online participants could view her outfit. When Web viewers responded by sending her comments, their instant messages popped up on the left side of the mirror for. They also selected items for her to try on, causing virtual images of the clothing to appear before her in the middle of the mirror, like life-size holograms.

Today customers can share their mirror image in a Lepore shop with their Facebook friends – getting realtime feedback and comments. Lepore is on the leading edge of social retail.

But it is the big retailers in serious need of help. Many seem lost when pressed to embrace new customer connection points. To counter that several large retailers are acquiring innovation, just as Nordstrom has. In March 2011, the pharmacy chain Walgreen acquired its online rival for roughly $409 million. One month later, Wal-Mart Stores paid about $300 million for Kosmix, a social media start-up, that’s been renamed WalmartLabs, that now serves as the retailer’s lab for building and testing new Web and mobile applications.

Fancy mirrors, cool strategic partnerships and acquisitions may help sell product but they are not a sure thing. The only thing guaranteed in today’s economy is that more people are using technology to shop and buy. Connecting with those customers requires rock-solid merchandising savvy, great product, exceptional service and complete understanding of consumer behavior in a world where customers have taken control of the retail relationship. Throwing technology on crappy product is like putting lipstick on a pig.

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