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Doug Stephens is one of the world’s foremost retail industry futurists. His intellectual work and thinking have influenced many of the world’s best-known retailers, agencies and brands including Walmart, Home Depot, Disney, BMW, Citibank, eBay, Intel and WestJet. Prior to founding Retail Prophet, Doug spent over 20 years in the retail industry and is the author of The Retail Revival: Re-Imagining Business for the New Age of Consumerism.

UnboundID: Are customers more or less loyal today versus a few years ago? What’s the latest thinking on loyalty in the age of the digital consumer?

Stephens: Twenty or 30 years ago, there wasn’t as much choice and we didn’t even know our options. As a result, inertia was often mistaken for loyalty. With the advent of the Internet and mobile technology, consumers now have the opposite problem: As consumers we have a much infinite array of choice at our fingertips—almost too much choice. Loyalty has been redefined as a result.

Millennial moms are defining loyalty in months not years. They expect to be delighted by something new every few months. We live in a world where Apple releases a new phone every six months, whether we need it or not. The clothing retailer Zara no longer introduces new lines by season but on a daily basis. Brands like Forever 21, Starbucks, Apple and Zara are generating loyalty because they are continually rolling out new things. Consequently, they can hang on to customers longer because they are keeping them fascinated and interested in their brands.

UnboundID: Does that make it harder to compete for lower profile, “average” brands?

Stephens: A few decades ago, a retailer could be average. They could advertise their way out of it and reach enough customers that way to withstand their own mediocrity. But that’s no longer the case. The effectiveness of media is increasingly questionable. Companies have to do something new that will capture consumers’ attention, such as creating an entirely new business model like Uber did, or a new product like the Apple Watch. That’s why some major retailers are doing so poorly. They are now neither the most convenient option, nor are they the most enjoyable option. They’re average and as a result, they’re slowly becoming invisible.

UnboundID: What are retailers doing in regard to trust and privacy?

Stephens: Privacy is much like a currency and we trade it every day for things we perceive are of value, such as social media. I know I am trading privacy away on Facebook to connect with friends or on Google to find information. This becomes an issue, however, when there is no overt promise on value from the brand. Brands tend to use a lot of smoke and mirrors and say vague things to get our personal information and then use it to send us junk and ads. There’s a different approach.

Neiman Marcus released an app recently, which allows customers to see who is working in the store that day, choose a preferred sales associate to meet with, share their purchase information and preferences, and make an appointment with them. When the customer arrives for their appointment, the Neiman’s employee has everything ready for them. It’s an overt exchange of value.

Look at Starbucks: you can now order your drink ahead of time online and pick it up in the store. This is a commodity product but by creating a different kind of experience for the customer they’ve created an incredible degree of loyalty.

UnboundID: Amazon just opened a brick and mortar; Google’s pondered it. What is the future of retail?

Stephens: One of the things that is clearly happening is that the strategic value of physical stores is changing dramatically. Media is now becoming a direct route to buy products. Whether that’s on YouTube, Facebook or Shazam, you can now directly purchase an item from an advertiser at those properties. So the question becomes, what’s the purpose of the brick-and-mortar store?

Established brands are all wrestling with this. I believe that stores can be a place where consumers can learn and have fun and experience brands. Many online retailers, who understand this, are now coming offline. Brands like eyeglass retailer Warby Parker and men’s clothing retailer Bonobos are making an enormous impact on the future of the physical store. That trend will continue and will put a lot of pressure on conventional retailers.

Likewise, online retail will become more immersive and physical. We will see a lot more experimentation with virtual reality. Online retailers will work to allow shoppers to immerse themselves in the shopping experience. This next stage of e-commerce will definitely enable a more natural shopping experience, like actually being in a physical store.

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Want to know more about how to win customers in the multichannel, digital world? Check out the infographic Secrets to Multichannel Customer Experience Success.