Article by Zoltán Juhász
Today a massive 31% of the world’s GDP is driven by the Retail sector. Every single piece of our environment is affected by the rapidly evolving technologies and consumer behavior that is changing day by day by introducing new retail experiences and technologies.
These challenges are disrupting traditional retailer business models where merchandise products are displayed on shelves in stores or online and waiting to be sold. Conscious and innovative business models are needed to succeed by building customer satisfaction and loyalty via Communities.
For years one of the key messages in retail was: “Put the customer at the center of everything you do as a Retailer”. A model like this provides the best shopping comfort, special attention and personalized values at a unique segmented price point. This is still valid today but it seems, more and more customers want to take a step further and get something more as customers, such as a common mission they can share with others, to feel the power of a community they are a part of, or to make change.
Retailers’ brands have to pay additional attention to those customers’ vision and expectation and take actions to be part of their future. They need to act as platforms (social, donation, education, etc.) in a collaborative retail model where customer and retailer formulate a sustainable eco-system.
The following brands/retailers are the greatest examples of how to run successful Retail Businesses that are close to their community.
is a successful socks brand. Derived from the Latin word: bumblebee. Bees live in a hive and work together to make their world a better place. They’re small, but their combined actions have a big impact on the world1. That is where the mantra “bee better” comes from. They believe that little improvements can add up to make a big difference and that every purchase goes towards directly helping someone in need.
The brand was founded on the philosophy of donating socks to those in need but has evolved to go deeper into the community. The more clothing items were sold, the more Bombas donated. One item purchased = one item donated. There is a donation counter on the website that increases every 5 seconds on average. Bombas donated over 31 million clothing items through more than 2,500 Giving Partners in 50 states across the USA.
Product innovation is also key to the success of the brand: two years of research & development, several material improvements to the design, performance, and comfort of the everyday sock has been implemented in the product. Continuous innovation with each successive production release is applied on an ongoing basis.
The brand is highly committed to customer satisfaction and 100% happiness is guaranteed. If the order somehow failed the customers’ expectations, a dedicated in-house customer happiness team assists each customer to resolve any issues.
This retail business model mixes quality products with a mission of helping people in need in the whole country via an easy, safe, transparent donation platform. The community wearing Bombas products has the message to the world “bee better”¹.
www.bombas.com 
is an online beauty retailer best known for monthly subscription of personalized samples. Easy, fast and careless solution for people who do not have the time or just do not want to go after beauty things.
Products have been picked to match the customer’s profile (skin, hair style, eye color etc.) within amonthly subscription package. Customers receive product samples for trial. If some of the products are appropriate the full-size version can be ordered. The monthly sample packages also have high value and it is super convenient that Birchbox knows who their customers are and what they may like month by month on an individual level. To be able to run a business model like this, foundation data, product attributes and customer profile data has to be well organized to be able to find the best matches between customers and products without face to face interaction.
The assortment features around 500 prestige and two in-house brands, so it is easy to find the best fit for their customers and to surprise them with new beauty experiences. Birchbox knows that beauty isn’t every women’s and men’s passion but they believe everybody deserves to have the best products. This is only feasible if you stay relevant to what you are offering.
Birchbox is now available in retail stores at Walgreens: “In Walgreens, we have found an exciting partner that supports our mission of reaching an underserved customer who doesn’t prioritize beauty,” said Katia Beauchamp, CEO, and Cofounder of Birchbox. “Birchbox has effectively changed the relationship that this customer, who represents 70 percent of the market, has with beauty and increased her spend in the category. Walgreens is deeply committed to beauty and shares our vision for a different type of retail experience – one that is holistic, seamless and designed to help shoppers make informed confident decisions. Together we will continue to evolve the integration of our physical and digital shopping experiences.” ²
Birchbox also provides the opportunity of the online product submission process and acts as a platform where products of beauty brands can hit the Birchbox community if they fully meet the company standards.
www.birchbox.com 
is a fashion and accessories brand founded on the philosophy of sustainability and support global poverty alleviation. The organization is dedicated to be B Corp Certified. B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. B Corps are accelerating a global culture shift to redefine success in business and build a more inclusive and sustainable economy.
Products are manufactured by the highest standards with the design of timeless style and they do not rely on trends, these products will last longer and won’t be thrown away in the next fashion season.
Factories are located in Asia and South-America but how they operate has a huge impact. “That means taking ethics into account during every phase of a product’s lifecycle—from its design to its manufacture and sale. We’re into funky; we’re into sustainable; we’re into treating those who sew our products with respect. How do we do that? Each one of our factories agrees to a rigorous code of conduct, completes an audit or relevant certification, and agrees to help promote fair labor practices.”³
Cotopaxi is allocating 1% of annual revenues to the Cotopaxi foundation. Each year, Cotopaxi awards are granted to outstanding non-profit partners. They are carefully selected for their track records at improving the human condition and alleviating poverty (International Rescue Committee, Escuela Nueva, UN Foundation, Mercy Corps, Utah Refugee Services).
There is no question that retail businesses in the future have to provide transparency and achieve a sustainable worldwide ecosystem of producing goods with minimal greenhouse gas emissions. On the other side, customers have the power to make responsible decisions on what and where they spend their money and what that money will be invested in by the brand/retailer.
Cotopaxi is a good example that people are not just buying products and their attributes (color, size, pattern, design, type of textile etc). Cotopaxi customers are also buying vision and mission they are believing in and that transform the brand into a community.
www.cotopaxi.com Although the above three examples are different, the same key success factors are identified for raising business efficiency and helping the organization be sustainable on a long term basis:
- Consolidated data foundation: It is essential to produce accurate information from big data set and be able to explore and understand correlations in customer behavior to predict next business actions.
- Diversity: Research shows that diversity and inclusion make businesses more successful. Diversity in retail matters across leadership, workforce, workplace culture, marketing, as well as a consumer perspective.
- Customer Segmentation: Know your customers and know who they are. Do not want everybody as your customer. Focus on your existing customers and let them bring others into your customer base. Customers become communities easily.
- Transparency: Do not hide any information. Customers are keen on news and facts. They want them directly from you. The more they know about the brand/retailer the closer they feel to it.
- Stay Relevant: Customers are moving so fast retailers have to stay relevant. There are countless sources of information and competitors who want to disrupt your business. Be honest and know the best that you are selling.
- Leverage the power of your customers: Customers have a lot of power and they want more. They are aware that there is a huge race to gain more customers and to keep them long term. Let them share experiences, involve them in your business so they get hyper-engaged.
- Experience and Information sharing is vital for retail success. Listen to your employees, they know the answers for internal issues. Organize workshops, let them brainstorm and share their experiences. They often know the solution, just listen to them.
- Innovate continuously: Do not let technology pass you by without action taken to get the benefits. It is much more difficult to take a huge jump ahead to get over the gaps than continuously take small actions to stay always on top.
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²: https://edge.birchbox.com/uploads/Birchbox-at-Walgreens-Press-Release.pdf