‘Retail fighting back’ – What edge do experiences give?
Retail has for some time been competing with e-commerce. We have all seen the same brand creating a different experience online to their ‘bricks and mortar’ establishments. It is now more important than ever that retailers focus on creating ‘experiences’ for those better-informed shoppers.
Find out more in the attached video in a session I covered earlier or download the presentation here
Doom and Gloom?
One of my favourite statistics for a while (true for retail and other industries) is that 70% of the buying decision has been made BEFORE a customer comes to speak to you! This was true even pre COVID times. When we compare this to 10-15 years ago where it was maybe up to 30% of this decision having been made prior to the contact with the organisation. That is a drastic change in the buyer behaviour. How many retailers have cottoned on to this? If they have how have they adapted their interaction with prospective buyers?
With that in mind, and also taking into account how this pandemic has shaped our ‘bricks and mortar’ buying behaviour this is a number surely due to go up even more. At the end of the day if we have a limited window as a buyer in which to be ‘out and about’ it won’t always now be for the “I’m just looking” type of customer.
So what can physical retailers do to stay relevant and bring in the sales? This is not a new question to any of us. Many industry authorities in the retail and digital signage world have deliberated over this. Doom and gloom seems is all around us with different store closures and retailers going into administration. To the extent where some think that high street retail is dead. But, it is not time to throw in the towel. I’ve heard many times over being said before – that retail is fighting a losing battle against e-commerce, especially after COVID. This isn’t strictly true. For some businesses yes for sure they will not be able to compete, but that is because they are unable to (for whatever reason) pivot their business. By that I don’t just mean make their product/services available online. I also refer to being able to ‘bridge the gap’ between their online and physical experiences. If we can have relatable advertising online why not extend this thinking to the physical store?
It is during times of hardship, be that a recession (2008), or a pandemic that companies can learn to thrive; new normal or not. To do that they need to be agile and willing to change and adapt.
Declining footfall (COVID or not), competition from online merchants among other factors are what can contribute to the retail resurrection in the high street – for some brands at least. So much so that Amazon has dipped its very big foot in this field – arguably the largest e-commerce giant choosing to do physical stores. Crazy right?! Not really. The same as Disney before them they understand:
- The great benefit of ‘experiences’
- They understand their audience – and that ‘Value’ is generated by customers and not by the product
- They use technology to their advantage
We already know:
- At least 52% of retailers claim that customers respond to their use of digital signage messaging very well
- 71% of consumers feel that advertising on digital signage stands out more, compared to online advertising
- 700% increase in sales of a product – due to swapping out print into digital signage as well as targeted/personalised content (the company in question? Iceland frozen foods retailer, the product in question – Coconut water). A prime example of how technology can enable growth in sales by firstly understanding your audience (Clapham High Street store – on a hot summer’s day) and reacting to it by personalised and timely messaging
With just those stats alone Amazon entering this space all of a sudden doesn’t seem that crazy anymore, especially given their technology prowess.
What does the future hold?
Adaptability, agile strategies and the word that has been done to death ‘omni-channel’. But now is the time to put those words into action. COVID has highlighted those companies who are able to adapt are able to benefit and I don’t just mean the hand-sanitisers with digital signage screens plonked at the entrance of a store. But real planning of what the ‘customer journey’ needs to look like.
Here’s my quick personal example (I’m sure people will have theirs too). I’m a ‘better-informed’ buyer these days – I’ve done my research on the new car which I will be leasing. In fact I’m about 90% there (higher than the average of 70%), it’s just a case of where I get it from, barring any last minute revelations. I have at least 9 options to choose from (pricing wise), one thing that’s lacking so far is the experience of what it will actually feel like to drive it? Is it really as good in real life as it is on paper? So I book my test drive – two different places because I know pricing wise I’m onto a winner and can always fall back on internet sale if they cannot price match. But if they can and they make me feel wanted then they will get my business. Anyone reading this story will know how the rest of it shapes up.
There are two possible outcomes:
- I feel like I’m a valued customer, they pull out all the stops and let’s face it, who doesn’t like a bit of pampering (even when buying a car)? The dealership does everything in their power to give me the experience and match the online price (even with the additional overheads they have over and above the online brokers). They get my business. I go away happy and recommend them to family and friends with the added bonus that should something go wrong I can always go back and ‘speak’ with someone real.
- I walk in and am left to my own devices, no personal touch to anything. I get given the keys for a test drive – the assistant sits quietly in the passenger seat. 10 minutes later I hand the keys back. There are no questions asked, I’m just told they’ll prepare a quote for me based on the spec. They won’t be getting my business
How many other places can the above be applied to? It is not just the car industry. Travel industry, hospitality, mobile phone even. As we humans crave experiences. In most cases (and trust me I’m on the frugal side) I will pay extra for that ‘experience’. Would you?
The Retail Revolution
It might sound crazy to think of things this way, but what do all industrial revolutions through the ages have in common? One or two factors have come into play which cannot be ignored and have a big impact on outcomes for the future. The common denominator in them all has been ‘technology’. People have always tried to use technology that they have had available to make their lives easier and bring things up to the next level.
If this was true of the first industrial revolution in the 18th century (steam engine), the second revolution at the end of the 19th century (new sources of energy electricity, gas and oil), the third revolution in the second half of the 20th century (telecommunications, computers) then it is true of the fourth revolution – which we are in right now. Industry 4.0 as it is commonly referred to, the fourth industrial revolution with the dawn of the internet and virtual reality worlds.
Technology has changed and will continue to change how humans interact in retail settings both online and offline. Retailers stuck in the dark ages will miss out on the new opportunities and differentiators over competitors which technological enablements can give them. Just because we are going through the internet era does not mean that ‘experiences’ are any less important, if anything it is more so. The Invidis Yearbook 2020 covers a lot of this very well. Another favourite of mine is the ‘Project Nourished’ (well described by Gary Hawkins in his Retail 4.0 The Age of Metamorphosis document) – an initiative which sought to transform the eating experience. By using virtual reality, aroma dispensers and other sensory tools this team successfully convinced diners that they were eating sushi, lobster etc when in actual fact they were eating seaweed and other substitute food. But it goes to show just how much digital capabilities can impact and alter our view of the physical world.
A recent survey on the importance of customer experience and journey discusses some of the findings based on answers from different retailers:
Source: Knexus Group
There are a lot of stats here – but the biggest takeaway for me is that 92% of retailers acknowledge customer experience is vital to their business, yet 41% of them say that they lack the in-house expertise to put this in place.
Why do consumers still prefer a visit to the physical store?*
- 47% of people still want to go in store and purchase items as it gives them the ability to touch and feel and try the product before buying. (car example again)
- 47% of them prefer the convenience of taking the purchase home instantly (who hasn’t researched a laptop or a new gadget and when you were able to get it from the store there and then have gone and purchased the same day rather than waiting for delivery?)
- 36% of them like to have the ability to browse and discover new things (my mother still does this every time with supermarket shopping – you know the drill, go down every aisle even when you have a list)
If you are in this field already and have had experience in delivering a true ‘customer experience journey’ then you will already be familiar with the kind of examples I will cover below and the importance of initially knowing the buyer persona – and this is just scratching the surface:
- QR codes – learn more information about the product in question
- Table booking / online app for ordering coffee on the go
- ‘Smart shopping carts’ (instead of pushing) – meaning customers can keep their hands free and focus on looking after children and any other personal tasks. Well done JD.com with their 7Fresh high-tech supermarket.
- Interactive in-store experience – get the customer involved with the journey Optojump Interactive Experience at Under Armour
- Automated checkout – Amazon Go – offering a mixture of data-driven shopping experience. Enter the store, pick-up items, and leave without queuing or checking out – some people’s dream isn’t it?!
- Motion-based content
- Virtual reality showrooms (Audi VR showroom)
- Audience analytics (understand if indeed you are talking to your perceived audience at the right time)
All of the above and more have aided physical retailers to improve the customer experience journey. But there are too few of us doing this. We need to think about every aspect and all of the steps of the customer journey and find ways to mitigate any fear (in COVID times). It will be the businesses who step up to this and help their customers streamline their shopping experience from start to finish who will have the opportunity to create customer loyalty far-reaching beyond the COVID times.
COVID or not I believe it is clear that more of us in the retail space need to embrace the benefits of weaving technology into the customer experience journeys. With careful planning and spending in the right areas, the initial investment will most certainly be worth the return. The technology is there ready to be embraced. A word of caution though, while the technology might be there to be embraced it does not mean that everyone is equipped to understand how to best make it work and more importantly willing to. Sometimes the crucial facts of the target audience/buyer persona, understanding the different customer phases, touchpoints etc are not thought about from the outset and not enough importance is placed upon these. This is where IT and AV partners can do their best with the industry education on how to bring everything together.
For retailers out there who have an online presence and have spent millions fine-tuning their e-commerce strategies (by analysing data), they apply the same logic to the physical spaces – thank you Salesforce for the great infographic here:
- Draw intelligence from the data you gather (Audience analytics or AI etc) – invest in individuals for the business to crunch the numbers as they will be pivotal
- Those doing it successfully are highly collaborative with their I.T. teams
- Seamless analytics would increase sales by more than 20%, improve customer loyalty and acquisition
Fast-paced changes are afoot and agile mindsets will be required to create exponential value for those retailers who do adapt. The speed at which this is going to be happening will be much quicker than before, so I urge you to have those conversations with your clients and help them on their journeys.