The year is off to a furious start and if the first week is any indication, we are going to be in for quite a ride. It sounds cliché but this year feels different, for all kinds of reasons. Yet it already feels as though it is validating many things we’ve been thinking, working towards and expecting from the market.
The 2017 work year started with a clear sign that reinforced everything we’ve been saying about the future of customer loyalty (and the present): Amazon. Leaving my house for the office last Tuesday this was the first thing I saw:
Without getting to metaphysical, it sure seemed like a sign that Amazon and its omnipresent and increasingly significant role in global commerce shows no indication of weakening. Amazon is more and more present not just in digital realms, but, thanks to their customer centric marketing strategy, in the physical one as well. And as they push forward with Alexa, Echo and more, look for the company to extend its lead.
On the contrary, the first week of 2017 saw Macy’s shedding 10,000 jobs after a holiday sales decline and Limited shutting its doors entirely. Not a good start to the year for traditional retail.
The week concluded with Neiman Marcus announcing "that it is not in its best interests" to proceed with its IPO. This after putting up weak numbers and citing declining customer loyalty due to price transparency as reasons for its poor performance. Think about this: a retailer blames customer for being disloyal because of price transparency. If pricing is transparent then the retailer has failed to create a customer centric marketing strategy to drive loyalty based on some other aspect of its brand or merchandise (or combination). Clearly the customer’s fault. Apparently retail’s obsession with competing on price is the customer’s fault too?
It will be interesting to see what the next 51 weeks of the year bring. We stand by our view that brands prioritizing relevance and customer centricity as part of their business plan – especially versus price promotion – will prevail and prosper.