Brendan Witcher of Forrester on Technology, Amazon & More
It’s a nice idea for a business to say they’re customer-obsessed but who is really? We hear all the time how brands want to be customer-obsessed and many proclaim that they are but, where does a brand go from serving the customer to serving itself and further to that, what is the missing piece for brands to complete the customer-obsessed puzzle? In my recent interview with Brendan Witcher, VP and Principal Analyst of Digital Business Strategy at Forrester, he described the difference, beginning with the notion of company-obsession: “I’ll come to a website and you recommend a product for me to buy. That’s not customer obsession, that’s company obsession, that’s something you want me to do, the organization wants me to do. Or I’ll put something in my cart and for the next 6 months you’re following me around the web reminding me, all in my best interest as a consumer, that I’ve left something in my cart.”
When it comes to true customer obsession, Brendan says “it’s about understanding, what does it really mean to serve me and add value for me as a consumer, who comes to your website, uses your app, and goes to the store. What is value to me? That’s what customer obsession is.” The key? Brendan went on to explain: “To be customer obsessed we have to be data led. We really need to be able to use data, we need teams that understand data, and we need to focus on collecting data about the customer, doing the kinds of things that make us know elements about the customer to deliver those experiences.
To be customer obsessed you need to be data led and have a strategy for data, that’s where companies are failing.”
Where Companies Should Put Their Tech Focus
Customer-obsession was just the tip of the iceberg in our conversation. To kick things off, Brendan and I dove into why the cornucopia of technology available to businesses can do more to inhibit their digital business strategy than enhance it. After all, the pressure is almost palpable for organizations to keep up with all the technology trends out there, causing them to spread their resources way too thin.
Brendan’s advice to organizations on where to focus their attention is on “trying to innovate on core things like omnichannel, personalization and digitizing their store experience. This is really where customers are having expectations set. They’re looking for cross-channel experiences, more personalized, relevant experiences, things that add value to their customer journey.” A problem he sees in organizations getting distracted by technology is they’re missing the mark on the basics they should know how to do, “it’s not time to put robots in your store, when you can’t get out a personalized email.” He says no consumer is going to leave a store because there’s no virtual reality because “we’re not there yet” but simply, “trying to solve customer pain points is what you should put your tech focus on.”
He makes the point that overall, organizations don’t want to get too far ahead of their customer when they’re strategizing which shiny new technology to use or, overestimating the effectiveness of a technology when its method isn’t yet in the hands of the customer: “we all remember beacons a few years ago. Beacons were going to save the world. No, they didn’t save the world and the reason they didn’t save the world is because no one walks around with their phone in front of their face. That’s too far ahead of the customer.”
Brendan’s rule of thumb is: “it’s really important to just figure out the things that customers are looking for, make sure you’re delivering on those but not only that, optimizing for those things. So if I do buy online and pick up in store, great. Great web experience. But when I get to the store and I am waiting in line for ten minutes to pick it up, you can’t find my order, they pulled the wrong thing, and the store associate was rude to me. These are all problems we need to solve so it’s about optimizing the core.”
A Refreshing Strategy to Compete with Amazon
Next, we moved onto what many view as the big bad wolf of retail that’s going to huff and puff and blow the entire market of competitors down: Amazon. Yes, there is a notion Amazon is winning at everything and while they’re a force to be reckoned with without a doubt, businesses gearing up to win against Amazon are positioning themselves all wrong, as Brendan points out: “no one is going to win against them, you can’t beat Amazon first of all. Let me just level-set with everybody on Amazon for a second. Retail is about 3.4 trillion dollars in business. Of that, about 3 trillion is physical retail, about 88%. Only 400 billion is eCommerce. So for all the news and headlines eCommerce gets, it’s still only 12% and by the way, mobile, is only 1.7% of commerce. We get all these headlines and we hear about all this digital, eCommerce and mobile but they’re tiny portions of retail.
On top of that, yeah, [Amazon] does own a lot of eCommerce, but they don’t own a lot of retail. I mean, when you remove marketplaces, and I’ll tell you in a minute why you should remove marketplaces, Amazon owns 2% of retail, 2%, that’s not a lot, it’s actually a little and it’s mostly in the eCommerce space. They don’t own physical retail yet. So to say that Amazon is winning, I would say that’s a stretch. But I would also say they’re doing a very good job of winning their customer. They do understand how to win the customer.”
His explanation, at least for me, unpacked the Amazon equation a bit better than I’ve heard before but still, as a marketer, I can’t help but wonder how do you even begin to win customers from a brand that is arguably one of the best at it? The best answer, according to Brendan is for organizations to worry less about how to beat Amazon, and focus more on how to be Amazon: “That means adopting a customer-centric focus, adopting long-term vision for your company and your technology investments.” As Brendan points out, the best way to understand this is to look at their development of the Amazon Go store. After starting to work on it in 2012, they launched it last year in 2017, spending five years investing in its development with no return on investment or confirmation it was even going to work. “I don’t know a retailer with the DNA to work on something for five years without a return on investment. This is what I mean about adopting their mindset. Adopting the mindset of ‘what does it mean to be a retailer?’ It doesn’t have to be what it traditionally has meant.”
Companies Shouldn’t Only Have a Digital Roadmap
To end our conversation, I asked Brendan what he thinks the biggest thing is that is holding organizations back and as he started off he emphasized “it’s not what you think.” He said most of the organizations he works with have a digital strategy, and are aware of the technologies they need to buy but “53% of organizations say culture limits their ability to execute the digital strategy. Even worse, 82% of organizations say organizational silos limit their ability to execute the digital strategy. And then again, the same number, 53% say ‘we don’t even have the right skillset to deliver on our digital strategy.’ It’s the non-technical elements that usually hold a company back.”
This, Brendan says, is what’s missing in the rush to get a digital strategy nailed down. “There is no strategy for change management.”
He went on to conclude “it’s not about tech. It’s not about buying the tech. It’s about getting your organization all on one page, moving forward, creating a culture of innovation, a culture of using digital to create value for customers and knowing what value really is. That to me is where I would say most organizations are failing, and they need to build a roadmap. As much as they have a technical roadmap, which they should write down by the way, most companies don’t write down their roadmaps unfortunately, they should. They need to work on a roadmap for technology but they also need to work on a roadmap for organizational change.”
It’s not very often we get to sit down with analysts but I relish every opportunity I get to hear what they have to say. What I enjoyed most about my time with Brendan is of course, to start, the unique ideas he brought across but beyond that was the way in which he shared ideas to provoke thought and shake up the common thought processes many have around some of the biggest topics of conversation in business today.
When it came to his point about the small percentage that is made up of eCommerce within the greater expanse of retail as a whole, I was shocked but then delighted at what a massive opportunity that presents for organizations in terms of their eCommerce strategy. That is a whole topic of conversation in and of itself, but for now, I urge those companies navigating the digital landscape to think more deeply about the points Brendan brought up and how to put those to work in their own organization.