For the past few years the retail industry has seen store after store shuttered as shoppers increasingly prefer the convenience of making purchases from their phones and laptops to the in-store retail experience.
This recent Capgemini report found that 32% of people surveyed would rather wash dishes than go shopping in a physical retail location, while more than 40% consider it a chore. More than half of people surveyed identified major frustrations with difficulties in comparing products, long checkout lines, inability to locate items, lack of personalized promotions or discounts, and poor guidance or service provided by store associates. Not surprisingly, most of these problems disappear when you avoid the store and pick up your tablet. These challenges must be addressed if retailers want people to keep walking through their doors.
Retail consultant and former executive at Neiman Marcus and Sears, Steven P. Dennis, just wrote this piece on his blog asking the question, “What if Retail Traffic Declines Last Forever?” Dennis writes, “While there is a belief that e-commerce’s economics are superior to brick & mortar stores, that frequently is not the case, primarily owing to challenging supply chain costs, high product returns and compressed margins. As traditional retailers invest heavily in building their digital operations–and creating the much vaunted seamlessly integrated shopping experience–many are merely spending a lot of money to move sales from one channel to the other, often at lower profitability.”
While we agree with his overall assessment, in our opinion, retailers should not worry so much about the quantity of traffic they receive in their retail locations. Instead, they should focus more on the quality of it. They should stop competing head-to-head with e-commerce firms and play to their unique strengths by leveraging the brick and mortar experience to attract better customers and, in turn, give them a more enriching experience than they get online.
Currently, many shoppers use digital means to enhance the in-store retail experience. They read in-depth product specs, check user reviews before picking something up off the shelf, and compare prices to make sure they’re getting the best deal. The brick and mortar experience has changed very little, while online shopping has improved in almost every facet. Retailers have done little to bring the conveniences and information-rich experience of online shopping into the real world. With the proliferation of free shipping and flexible return policies, it’s no wonder that consumers are staying home.
However, as we’ve said before, virtually all retailers should have a brick-and-mortar presence.
It all comes down to AEIOU:
- Advice: This is always delivered better in person than online. When is the last time a salesperson in a department store helped you put together an outfit? Or measured you to make sure you were wearing the right size? Many e-commerce sites (most notably Amazon) recommend other products based on what you’ve looked at or bought. A live person can do it better, asking your preferences, whether you’re shopping for a gift, etc. Chat bots aren’t as terrible as they used to be, but they’re still far from perfect.
- Experiential value: The Lowes Foods grocery store in North Carolina has a brewery outlet inside the store. You can get a cup of craft beer and set it snugly into the cup holder in your shopping cart as you browse immaculate aisles stacked attractively along with strategically placed product samples for your snacking pleasure. Shopping slightly buzzed in a pleasant, well laid-out supermarket (with snacks) makes it that much more attractive than logging on to FreshDirect.
- Interaction: Talking with real humans, can often (but admittedly not always) enrich the in-store retail experience. If retailers focused on hiring more skilled salespeople who could provide personalized service to their best customers, the brick and mortar experience could take on a new life. Some of the higher end department stores do this well, but they should expand it beyond their “platinum” customers to the “gold” and “silver” ones too.
- Opportunities: We’ve all gotten product recommendations from Amazon or other sites with similar engines that missed the mark because they don’t know how to parse our past buying history. Perhaps we let our spouse use our account or recently bought a gift for a five-year old niece, and that skews the recommendations we receive for months ahead. Humans, trained to sell effectively, can uncover meaningful and successful cross-selling opportunities that don’t blindly follow an algorithm.
- Understanding: Traditional retailers should be in a better position to capture relevant data about buying and browsing habits than any online rival. Being able to ask a salesperson who interacts with customers every day what people are looking for and how the inventory or overall experience can be improved is invaluable. Retailers have a great gift in being able to collect and leverage such data, but they do it poorly today (if at all).
Customers will likely never come back to physical retail locations in the numbers they once did, but they don’t have to. If brands are smart about identifying their high-value customers, ensuring that they are the ones walking through the doors, and providing a value-added experience, retail will continue to evolve for the better.