We look forward to Retail Systems Research’s Retail Paradox Weekly (RPW) for its keen insights and stimulating analysis. Most times the meta-paradox is—that’s such a compelling thought why isn’t it top of mindUnknown-16in the community of retail thought leaders? The RPW for August 11, 2009 is a triple play; all three of provocative articles deserve comment.

In “Introducing ‘The Engaged, Customer-centric Retailer’” Paula Roseblum points out that sentiments influence behaviors, including especially from a retailer’s perspective, purchasing behaviors. Her suggestion—aggregate customer conversations in social media, customer service emails and the like, digest it, and connect to your customers smartly in view of their sentiments toward you.

But it’s not easy to translate even an accurate assessment of sentiments, if an accurate assessment is really possible, into a reliable assessment of what consumers and customer will buy next. It’s the next buy not today’s feeling that drives retail success. Buying influences feeling as much as feeling influences buying. An accurate assessment of future buying is at least every bit as important as assessing today’s sentiments, if not more. It’s possible now to develop reliable assessments of what consumers will buy next. That seems a more direct route to satisfying customers than only meandering through their sentiments to get to the same destination. It’s not either/or, retailers should do both, but since the technology exists to take the direct route now, it’s logical to start there and let their hearts and minds follow.

Nikki Baird makes several great point in “Retail Communities: Engaging Consumers by Letting Go.” She advises retailers to move the focus of their communities to their product categories, something closer to a consumer’s needs, and away from a focus on their brand.

To explore its implications on merchandising and great products, let’s start with an insight Nikki gets from the Louis Weiss, the CMO of Vitamin Shoppe, that a retailer’s community has to have a physical manifestation already, if its virtual one is to thrive. Where did he find his community’s physical manifestation—in the aisle in front of merchandise. To see the role merchandise plays in defining a retailer’s relationship with its customers, consider the prospects for a retailer’s virtual community when chats in its aisle go along the following lines:

Customer 1: ”Gee, I was hoping to find something that helped me…(fill in the blank where a product quality satisfies a customer need.) Do you see something like that here?”

Customer 2: “No, I don’t. And you know, I was looking for something that made me…(fill in the blank with another product attribute but link it to a customer’s aspirations.)

Better yet, connect the product to a life role that defines customer 2, for example, finding a homeopathic remedy for her son’s chronic and debilitating sinus condition. A community beneficial to a retail business can’t jump from brand to a category that affects the customer’s quality of life unless its offers in the category benefit the customer in that regard. Merchandise is the lynchpin.

Brian Kilcourse’s observations from NRFTech point out how one retailer finds value in in knowing who its customers—and pets—are, and aspires to know that Mrs. Jones and Fido have walked into the store. Petsmart knows its loyal customers who account for 81% of its sales. There’s huge strategic value in that. The assets supporting this value enable something more—designing, adopting, and selling more products and services these loyal customers want and figuring out the same for customer Petsmart can make loyal.

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