MIAMI BEACH, Fla. – The NACS Leadership Forum kicked off yesterday evening with Harvard Business School Professor and Stanley Roth Fellow Dr. Rajiv Lal telling attendees that convenience is the hottest currency in retail today. Lal presented the opening general session, “Retail Revolution: Will Your Brick-and-Mortar Survive?”
“I think you should singularly focus on one thing, which is customer experience,” Lal said. “If you can make customer experience better, there’s no end as to what you can accomplish.”
Lal discussed post-Internet retailing in-depth, noting that while Internet sales grew even during the recession, retail space also increased. He noted examples of Staples, Best Buy, Bed Bath & Beyond, Pet Smart and Dick’s Sporting Goods all with flat or decreased revenue, but pointing out that online sales don’t necessarily affect all aspects of a brick-and-mortar store.
“Why didn’t the supermarkets suffer because of Diapers.com?” Lal asked. “If you don’t make money on diapers, you [can still] make money on everything else.”
He also went in-depth into Amazon, noting that today the retailer is not just the world’s biggest bookstore, but in fact the world’s biggest store. “Amazon has done an amazing job of making sure you consider that to be the first place to shop,” he said.
Lal said that because customers are now very targeted about what they want to buy, retailers need to focus on gross margins, basket size and shopping frequency. He focused on the lessons that c-store owners can learn specifically from electronics and supermarkets. He shared an anecdote about a customer who goes to Best Buy to purchase a new phone, but ends up searching for it and buying it online while inside the store. C-stores should recognize these new threats that other, larger retailers have ignored for too long. “It’s called shop at Best Buy, and buy at Amazon,” he joked.
He also said c-stores should think about how they’re maximizing their square footage. “You ask any retailer, they all recognize they have too much space in the store,” Lal said. “But they don’t have good answers about how to shrink the size of the store.”
He also urged attendees to think outside the box and tackle the last mile, including using data and CRM systems on a mobile platform and using their parking lots for customers to pick up goods ordered. “Why can’t you start home delivery? You have Instacart, you have Uber—you can use these assets,” he said.
Lal closed his session noting that retailers are not quick to experiment with new ideas and that this fear can be paralyzing. Ultimately, c-store owners need to ask themselves: “Are we going to be happy with what we have, or are we going to invest in the future?”