We know that retailers are facing challenging times, well spare a thought for the beleaguered newspaper industry. It has faced a torrid time at the hands of people choosing to read content online for free. Couple this with the mighty tough task of competing with the duopoly of Google and Facebook for the budgets of digital advertisers and it’s a toxic cocktail.
It therefore came as a big surprise to see that the New York Times recently reported a 49% surge in online subscribers. In the fourth quarter it added 157,000 paying online readers. The reason for this was a very simple – a fundamental change in its strategy.
The revenue model has moved from advertising-led to being subscriber-based. What this means is that the focus has shifted towards giving the readers (i.e. customers) what they want as opposed to what the potential advertisers would find attractive.
The CEO of the New York Time stated: “We still regard advertising as an important revenue stream but believe that our focus on establishing close and enduring relationships with paying and deeply engaged users is the best way of building a successful and sustainable business.”
At the crux of this statement is the recognition that future success is about putting the customer at the heart of the business. This is a statement that is all too frequently trotted out by retailers but far too few of them actually put it into practice.
They must be more pro-active in this area because the one common factor of the new breed of online-only branded retailers that have emerged – the technical term for them is DVNBs (digitally native vertical brands) – is their customer focus.
Their models are built around this very focus and it is supported by content and social media. They have been created to provide a solution to what they regard as a failing by the established players. Whether that involves offering cheaper prescription lenses, regular postal deliveries of commodity products such as razors, or tailored subscription boxes of new grooming products, they have seen a customer pain-point and solved it.
They are wholly focused on the experience they deliver to the customer and this is often aligned with a socially conscious stance. The sooner traditional retailers recognise this situation and realign themselves with their customers the better chance they have of giving the DVNBs a run for their money.
Glynn Davis, editor of Retail Insider
K3 Retail partners with businesses to provide connected technologies based on Microsoft Dynamics 365 so retailers can reach their goals now and in the future. In a size that best fits future plans wherever you need it – Cloud, Hybrid or On-premise. Our solutions drive more than 800 international retail brands from Charles Tyrwhitt and The White Company to Ryman and Sue Ryder, Hobbycraft, Wasabi and Ted Baker, K3 Retail is a Microsoft Gold Certified Partner and the UK’s leading Microsoft Dynamics retail partner.