Customers Buying Habits Are Changing. Adapt or Watch Your Business Die
Every day I get an email from RetailWire.com, a daily publication that is read by thousands of people in the retail industry. It’s the number one forum for discussions about hundreds of important issues in the industry. Now, before we go further, even though RetailWire.com focuses on the retail industry, what I’m about to share is relevant to every business in every industry.
A recent article in RetailWire posed a question about virtual reality and if it will make brick-and-mortar stores less relevant. By the way, if you haven’t experienced virtual reality, you must. It’s incredible. You put on what looks like goggles and you see the most amazing three dimensional images and videos. Okay, back to answering the question. My response was that virtual reality and augmented reality are just enhanced ways of viewing and experiencing products online. Yes, it will change the way people shop online, but it’s still “virtual.” It’s not real! You can’t touch the material to determine the quality of the suit or dress you’re looking at through a virtual reality headset. You can’t try it on either. So, how could this technology make physical stores less relevant?
The discussion of physical stores becoming irrelevant has been a topic of conversation for years. The first online purchase was made in 1994. According to a video produced by Shopify, an online shopping software program, the first online transaction was on August 11, 1994 through Dan Kohn’s online startup company when a friend bought a Sting CD over the internet. People said this kind of business would never work. People would never buy online. Well, never say never. Shortly after that Amazon came into the picture. And, here we are today.
Adobe’s research claimed last year’s Black Friday’s online sales were over $3 billion. And Cyber Monday’s sales, just three days later were also over $3 billion. Forrester predicts that by the year 2020, just three years from now, online sales will exceed $523 billion!
So, should retailers be scared? Maybe… because some retailers aren’t willing to change. And there are companies in virtually any industry that aren’t willing to change either. So, here is the lesson:
Business – in all industries – is changing. The old saying is true: The only thing that is consistent is change. So, get used to it.
Will online stores kill physical stores?
Did ATM’s eliminate bank tellers?
Did “Video Kill the Radio Star” when MTV went live back in 1981?
The answers are no, no and no!
Maybe the consumer is migrating to do more shopping online. It may make a physical store a little less “relevant” – but it doesn’t make the retailer less relevant! A retailer, as anyone or any company in business, must adjust and change. What makes a retailer less relevant won’t be because sales are moving from in-store to online. It will be because the retailer doesn’t adapt to the way their customers want to buy. And, it’s the same for any business. Your customers buying habits are changing. Adapt or watch your business die a slow and painful death. You must be willing to change as your customer’s change.
Advisors Will Be Extinct in 5 Years Unless…
I’ve had financial advisors for more than 40 years. Not once in those years have I called my advisor to find out what stock/funds I should buy or sell. But I have called to find out where I should get my first mortgage, when to sell my house, or how much income I could get in retirement.
In short -- and I think I’m pretty typical – I was looking for financial advice, as it relates to my life.
Here’s the disconnect, what most advisors do is simply manage their clients’ assets. They determine what to buy, and what to sell, they think about risk management, about growing their practice by finding new clients and about getting paid.
Historically that has been the business model. But as more women take control over financial assets, they, like me, will be looking for a different experience. And unless the financial community is willing to change ….. advisors, as they are today will be extinct in five years.
Advisors who want to survive will have to do a lot more than just manage money – they will have to provide genuine “advice”. That means doing what’s right for the client, not pushing product and pretending it’s advice.
Women especially, but all investors generally, are becoming more and more cynical. They says, “If I want advice about reducing my debt, that’s what I want and not ‘here’s more debt’ because that’s what my advisor gets paid for! And if saving taxes is what I want then saving taxes should take precedent over selling me a product.”
You may be thinking that spending your time providing advice isn’t lucrative but the reality is that in the long run – it pays off in spades. The advisors who take the time to build real relationships with clients, who provide advice as it relates to their clients’ lives, even when there is no immediate financial benefit to themselves, those who don’t simply push product – are the ones who over time have the most successful practices.
Generally women understand and value service, but they will say, “If I’m paying, I want to know what I’m paying for: Is it for returns? Is it for advice? Is it for administration? I want to know. Then I can make up my mind what’s worth it and what isn’t.”
Investing is becoming a commoditized business and technology is replacing research that no one else can find. Today the average advisor is hard pressed to consistently beat the markets, and with women emerging as the client of the future, unless they start providing real advice, their jobs will likely be extinct in five years.
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