Remember Lewis Carroll’s provocative admonition from the White Queen to Alice? “‘It’s a poor sort of memory that only works backwards.’” Retailers face exactly that sort of challenge today. Their memory is immersed in computer screen after computer screen of data analyzed in every way imaginable.

What’s the trouble with this exhaustive history? First, it only tells us where we’ve been. Second, thanks to enormous strides in information technology, everyone has the same information. So it offers no competitive edge.

Nature has equipped each of us with an unrivalled powerhouse – one that has fallen into serious disuse. It’s called gut instinct – the capacity to react to information in an instant. Trained by endless centuries of experience, gut instinct exists to help us with problems of the present and the future.

Today’s retailers – so often analytically driven – embrace the illusion that precise data on sales patterns gives them a superior command of their destiny. In reality, this immersion in a world of numbers has made retailers more passive and less alert to genuine customer needs.

At the same time, consumers yearn for guidance. They don’t want to be dictated to, but they welcome trustworthy suggestions that enable them to define better who they are. The retail community, on the other hand, has just fed customers what we believed would be good for them . . . but mostly what would be profitable for merchants. Yesterday’s retailer sold goods. Tomorrow’s retailer coaches customers and enables self-enhancement.

The new reality has unsettling attributes. That’s another reason why it’s easy and comfortable to dodge dealing with it, but that posture is dangerous. Instead, try a quick dunk in these ice-water realizations:

· We are entering a new world, liberated from privacy. That’s a scary thought, isn’t it? We’re becoming a naked society. Product labels reveal an increasing amount of information and arm consumers with the content data they need to opt for generics versus branded goods. Web cookies can tell us a great deal about shopping preferences. While one often sees outrage that our privacy is being violated, I’m inclined to believe that this sort of information, unlike identity theft, hardly puts us at risk. It won’t take long for customers to realize the material benefits of scrap-booking their identity so retailers can help design the ideal items and product array to match their individual lifestyle and consumption needs.

· Remedial customer service is the wrong angle. Look at the design of today’s stores. You’ll typically find a customer service desk situated at the store’s front end. It’s engineered to fix problems. When I visualize of the store of the future, I imagine customer service centers throughout the store. They won’t be doing remedial work. They will help customers design products in advance of purchase – partly through trained human guidance and partly through interactive terminals. The product domain might be a new bedroom interior . . . or customization of the perfect back pack to accommodate your specific array of gadgets. I look enviously at the St. Louis-based Build-A-Bear Workshop chain. It’s surely a pioneer.

· The next giant step will be to move beyond customizing stuffed animals to an entire retail world of “Build-A-You” that allows you as a shopper to customize your purchasing identity and to become an artisan in crafting the world you want to buy. More and more retailers of the future offering wanted differences will be responsive “Me Salons” in which the chief product designers will be customers themselves, guided by skilled retail coaches at the store level and on the Internet.

· As a result, the position of brands is further imperiled. Remember the 1773 Boston Tea Party when colonists recoiled at a tax imposition on tea they had no say in devising. In all, 334 chests of tea were dumped into Boston Harbor as an act of resistance. I contend that a comparable “brand tax” exists on once vaunted branded goods; and customers won’t buy them unless (1) there is a decisive added value, and (2) more and more, they have a voice in design and personalization of the merchandise. Customer resistance will simply be not to buy branded merchandise when they can stroll down the aisle or across the street to select either commodity merchandise . . . or personally tailored product they had a hand in shaping.

The logic of this “smart-is-the-new-cool” world can’t be tracked with charts and graphs. This profoundly different environment is not something you know in your head. It’s a world you assimilate through direct experience in observing consumers behave in stores . . . at home . . . and on the Internet. This isn’t a knowledge thing. It’s an act of realization. This is absorption logic . . . not textbook reasoning.

If you want to reawaken your slumbering gut instincts, observe and interact with customers as they grapple with real-world purchasing and product issues. It’s the healthiest inhalation therapy for your business I can recommend.

Tags: "brand tax", "Build-A-You", Boston Tea Party, Build-A-Bear, customer service, gut instinct