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Innovation: Change in Consumer Behavior

Over the past two weeks we’ve discussed technology innovation and its impact on the retail industry. However, we have yet to touch on what is probably the most significant factor in the adoption of innovation: change.

Innovation, by definition, is a change to a process or system, with inventors striving to make something easier, faster, and better for the consumer so that those consumers will change their behavior and adopt the innovation.

There’s a great deal of effort and strategy put in by the inventors to get the consumers to adopt this “change,” and the adoption of the innovation is influenced by these factors:

– Consumer characteristics (demographics, socioeconomic factors)

– Characteristics of the product (e.g. the experience, the ease of use, the benefits)

– Social influences (who else is using this, not wanting to feel left behind)

So there are elements that make people resistant to change, but there are also factors that make people want a change.

In the past decade, consumer behavior has rapidly changed as new innovations have come to life. One of the most glaring examples is shopping online versus in-store. As e-commerce has become more sophisticated and on-demand, more and more people are visiting sites like Amazon to buy their toilet paper, shampoo, or Diet Coke, and expect delivery within a day.

The same goes with retail, e-commerce to be specific. Business Insider says, “The number of online shoppers has grown by nearly 20 million from 2015 to 2016”. Less and less shoppers get in the car and travel to a mall, especially without researching online first. NY NOW articulated that “89% of shoppers do online research before purchasing an item in-store, and 45% of those use their phone to do it.” And now with Amazon consistently on consumers’ minds (and shopping carts), these numbers will continue to rise. Ten years ago, these same individuals were driving to their local Duane Reades, Safeways, or grocery stores to pick up their items and lug them home.

Another illustration of consumer behavioral change is returns. Consumers are buying multiples of items in different sizes and colorways to try on at home to then maybe purchase just one of those items. Zappos, a pioneer in online apparel and footwear sales, was one of the first to do this. Zappos offers free online returns, with a prepaid shipping label and extended timeframes to ship products back. Prior to the innovation of easy online returns, consumers unsure of their size or color would go into the store to try on the item, or more limitedly just buy one online, aware of the risk of it not fitting. Zappos catalyzed change in behavior through easy processing and is now a leader and a “go-to” for shoppers.

This consumer behavioral change isn’t just with shopping. We frequently adapt to changes in technologies in all aspects of our life. Instead of waiting on the street in the pouring rain, we can now order an Uber to arrive at our doorstep. Instead of waiting in a long line to get a coffee and risk being late to work, we can now order ahead on our iPhones and have it waiting at the counter when we arrive, having prepaid from our Apple Wallet. And while we used to have to get up out of bed to turn the light off, or go across the room to change the thermostat, we can just ask Alexa to do it for us. Life has become more convenient, more hands free, and faster with these constant innovations and optimizations on our behavior as consumers. And retail is not far behind.

But given the rapid adoption rate of consumer technologies, why do retailers lag behind at all?

The answer is change.

The following are six main reasons people fear and say no to change.

– Complexity – It’s not as easy as it seems. Retail businesses are complicated, and it is more risky to make big changes in a business process that stems through all company departments. It requires a thorough plan, as well as having everyone on board with the new changes.

– Resources – Not everyone is tech savvy and will understand the new changes. Plus, retailers are cutting staff count for financial reasons, so there needs to be a careful balance of skills and roles.

– Bandwidth – There are limited IT resources to handle the introduction of new technology.

– Energy – There’s a high burnout rate among retail leaders to implement new technology.

– Consistency – If it’s not broken, why fix it? This is one of the biggest obstacles to process innovation, to get people to understand that while it may not be broken, there are still areas to optimize that can lead to immense business impacts.

– Laziness – The “art” of procrastination. Is it necessary for someone to change the way they are currently doing something? Change requires time and conviction.

People are inherently resistant to any kind of alteration in their lifestyle. Change is perceived to be risky and can scare off “laggards” (refer back to our Blog #1) asking questions such as, “Why would I need this?” becoming the last ones to adopt new behaviors.

So then, what does drive people to adopt innovation and change their behaviors?

– Turnkey solutions – These are systems that can can easily be implemented into someone’s business or day-to-day life without requiring tech resources or a lot of time to be spent.

– Successful case studies – The proof is in the pudding, as they say. If the new system has been demonstrated to work in multiple times with multiple companies, it is easier to convince companies and consumers that it will work for them as well. Stories, videos, case studies, and other forms of social sharing are critical here.

– Competition – Everyone wants to get ahead and be the best, meaning they want to try new solutions and take on the role of the forerunner in their space.

– Necessity – Sometimes change isn’t up for choice, sometimes it’s mandatory. In order to keep business afloat, people must innovate and introduce new digital solutions.

At INTURN, we see people fear change everyday. Similar to other innovations, not everyone will be immediately ready to adopt the change. Thankfully we are able to offer and support elements that do successfully drive the adoption change.

So you get the picture, to change or not to change, that’s the question. We’ve shown you the reasons why people avoid change and the factors that help people accept it. Either way, though, change happens, and the best way to stay ahead and be successful, in retail or any other industry, is to adopt innovations in all aspects of the business. Technology is “changing” whether both inventors and consumers like it or not, and it’s better not to be left behind.