We are in an economy where deaggregation is actually cheaper, more efficient and more beneficial than aggregation. The governing idea of retailing has been to ship all of your products to a big box retailer and have consumers buy them there for efficiency and economy of scale. But now, thanks to technology, the model has flipped; servicing the collection of individual interactions is actually cheaper than aggregation, and the end experience is actually better. That is why I developed the BOSS model, and why I believe that these four shifts in perspective can help move any company’s retail approach forward.
When I presented this at the IAB Direct Brand Summit I received strong interest in it as a guide to the new retail reality, so I thought I would expand on this presentation a bit for readers.
As a quick introduction, the four pillars of the BOSS Model are:
Bonding, not branding
Orators, not customers
Showrooms, not stores
Science, not service
A close relationship that develops as a result of shared experiences with a brand.
If you were doing business 100 or so years ago you would have seen the origins of bonding. If you ran a shop that I frequented, we would have developed a bond between us based on the trusted exchange of goods for money. Fast forward, and the scale of commercialization eventually removed that opportunity by creating anonymity. But we have now regained our ability to bond.
Today, Direct To Consumer (DTC) brands bond with every interaction. When I take my daily vitamins I am looking at a package that literally says “Made for David” on it because I get my vitamin pack personalized for me from Care/of. Consider the very different experience than I would have every morning if I had purchased them at a vitamin store instead.
The biggest challenge for established CPG brands is having this kind of resonance. The key here is to create compelling content for engaged and expanding communities. One of the best legacy companies doing this is Nike. When I travel I take my running shoes with me, and thanks to Nike I can pop online and find someone else to go for a run with wherever I am. That is a bond that starts with the company and expands well beyond them.
Vocal fans and “regular customers” who feel compelled to tell others about your brand and your company.
DTC companies realized in their early days that Millennials like to discover stuff and share their discoveries online. And of course, that sharing is amplified because of their social channels. If you are able to create a story and a narrative that is really appealing, you can gain traction quickly.
The story around Away luggage was built through a careful cultivation of brand orators. They went online and shared all the things they loved about their Away suitcases: they talked about the portability, the great price and about how their bags could even charge their phones. They also loved the content that the brand produced, and how it informed their travels.
A lot of DTC brands have also done a good job of getting broadly famous people (and those famous within a focused group) to become micro-influencers. Why? Because when your goal is to create orators, you develop the innate ability to pull the right triggers so that customers feel motivated to tell their stories about you.
Physical spaces where customers are given an elevated and in-depth experience.
What big retailers have traditionally done is to combine the selling and the inventory functions of retailing under one roof. That no longer resonates. If I want inventory I will go to Amazon because they literally have everything, and if I want an experience I will go to the Allbirds store because of their personalized Service Bar.
Some big retailers have adapted through acquisition. Walmart has benefitted from the acquisition of Bonobos, Eloquii, ShoeBuy and ModCloth, and from the thinking and organizational viewpoints of company founders like Andy Dunn, who pioneered the zero inventory store; an experiential space where the brand holds interviews instead of inventory.
Smaller retailers have options as well. They can develop a great aesthetic to the physical footprint to give people a reason to come in. Think about Christmas shopping for instance. Stores can be more than a place to buy gifts; they can also be a place to experience the Christmas season in a more immersive way. The second thing they can do is to develop their own in-house brands that mimic the lower cost/higher quality/faster delivery of direct brands. And the third thing they can consider is opening stores with a smaller footprint and less inventory, but with more customization.
The systemic knowledge of the world gained through observation and experimentation.
Most large CPG players are really good at top down research. They can see where there is a market gap, and can do all the right formulations to get distribution and awareness for their products. But when you are in a world that is much more bottom up than top down, you have to start at the opposite point with the customer journey.
What does a guy shopping for razors really want? He wants a company to help solve the particular problem he has with shaving. Wandering into a store and trying to figure out what incarnation of razors he needs, and at what price, not to mention having to find someone to unlock the shelf once he decides, is not an optimized experience. These kinds of observations let the new razor companies disrupt and dislodge the giants of the industry. Instead of sending guys on a wild goose chase, they send them a box in the mail with exactly what they need.
Benefits Beyond Retail
A lot of what is happening in retail now is not only better for the entrepreneur and the end customer but better for the world in general. Without taking too much of a high and mighty view, if you have a company like Smile Direct that is giving people access to dental care at a price they are able to pay, or one like Plus Ultra, whose bamboo toothbrushes have prevented tons of plastic from entering landfills and oceans, you have a benefit for the greater good. These kinds of benefits are a direct result of the DNA that is built into these new retailers, and into the future of retail itself.