By Ed King, HighStreet
Collective
Since we started our consultancy, HighStreet, in mid-2017,
it’s become painfully clear that legacy retailers have had a difficult time
with their “omnichannel” and in-store innovation efforts. While we have
inspired many brands and retailers with our passionate message about how
shopper expectations have outpaced the rate of retail innovation by a factor of
three-to-one, the fact remains that many (including some of our clients and current
prospects) are unable, or unwilling, to make the changes necessary for
survival.
This paralysis reminds me of another staggering statistic.
According to the Journal of the American Medical Association, less than 5% of
people who survive a heart attack successfully change their eating, smoking and
exercise habits afterward. By nearly anyone’s measure, the Amazonian effect on
retail can be considered a massive coronary to the industry.
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To make matters worse for legacy retailers, along came the
Warby Parkers, the Amazons, the Caspers and other previously online-only pure plays,
all of which have enjoyed fairly immediate success in brick-and-mortar. Without
the red tape, old leaders set in their ways, and outdated back-end technologies,
these pure plays have been able to serve starving shoppers what they’ve been
craving in a brick-and-mortar experience — and they’re thriving because of it.
A 2019 survey by BDO illustrates this point. While a
whopping 84% of e-Commerce and pure-play retailers consider themselves to be thriving, only 40% of specialty
retailers, 35% of big boxes, 25% of discount stores, and 17% of department
stores claim to be.
The retail bar has been re-set, and there are new table
stakes. Shoppers now have certain “minimum” expectations of a shopping
experience. And retailers who continue to ignore these expectations will likely die.
Of course, things will vary segment by segment. But, after
doing 60-90 minutes of place-based human experience research (stores,
restaurants, airports, museums, theme parks) every day for the past several
years, we consider ourselves to have our ‘finger on the pulse’ of shopper
expectations. We believe there are basic expectations the majority of shoppers
will possess come January 1, 2020. We call them the Fundamental Five,
and you don’t have to break the bank with a massive digital transformation
effort or upend the company with a huge change management initiative to
accomplish them:
1.
Be relevant to my 2020 life;
2.
Unpack the product;
3.
Treat me like you know me;
4.
Let me shop on my terms; and
5.
Give me a reason to come back
Fundamental #1: Be
Relevant To My 2020 Life
Before taking
another single step inside your store, your customers are already weighing a
value exchange. It’s a cage match in the shopper’s brain between the effort of getting
off the couch, navigating traffic and finding a parking spot vs. the joyful
experience of shopping in a physical store that enriches their life in some way.
As expectations continue to rise and convenience becomes more tantalizing, it’s
critical that brick-and-mortars stand for something in the hearts and minds of
their customers if they hope to maintain relevance in a 2020 world.
Table Stakes:
Communicate your company’s purpose through actions and words. Actively engage
on relevant social networks and other public-facing forums.
Plus-Ups: Bring
social engagement inside the store. Commit to a philanthropic cause your
customers are interested in and offer them opportunities to get involved.
You’ll lose if:
…you ignore trends, culture and your key customers’ voice; or if you take more
than a few hours to respond via social networks to customer problems.
First Steps: Assess
your brand’s relevance and meaning to your market. Adjust your brand if
necessary. Become active on social networks and address customer comments and
concerns (good and bad) in less than an hour.
Fundamental #2: Unpack
The Product
The one
significant advantage that brick-and-mortar retailers have over the Amazons of
the world is the ability to shop in a sensory-rich, high-touch, brand immersive
environment. Shoppers love to understand the back stories of the product, love
to engage with the product, and love to envision themselves enjoying the
product. It’s what the 2020 shopper will come to expect from a physical store
visit.
Table Stakes:
Give your customers ample opportunity to try on or try out products with no
commitment. Embrace and be transparent with customer reviews. Allow brands to
communicate their stories inside the
store.
Plus-Ups: Create
cross-category, occasion-based, life story vignettes inside the store. Add
scents, music and other sensory triggers to demarcate and emotionalize the
space. Use digital to show products in different life situations.
You’ll lose if:
…you follow an operations-focused, category-centric (stack-‘em-high-and-let-‘em-fly),
not a customer life-story approach, to merchandizing; or if you charge a
restocking fee.
First Steps: Break
down the silos and communicate with different merchants and departments. Make
the dressing room environment comfortable and welcoming. Exhibit digital
content that shows products being used in real-life situations.
Fundamental #3: Treat
Me Like You Know Me
Imagine
shopping online and each time you visit your favorite e-Commerce retailer, you
have to sign in, only to “start over” from scratch. That’s right, no saved
sizes or past purchase history. No preference-based recommendations. No saved
credit card data. Absurd, right? Well, that’s how MOST shoppers feel when they
walk into a brick-and-mortar store. A new associate greets her and doesn’t know
her from Eve. Meaning she must “start over” each visit. In 2020, shoppers will
come to expect stores to know them upon entering.
Table Stakes:
Over-index on SKUs that are trending, store by store, neighborhood by
neighborhood. Have a mobile or tablet-based tool for sales associates to look
up past purchases, know sizes and preferences and make recommendations.
Plus-Ups: Offer
a mobile app with personalized pricing. Have an in-store measurement system
that gathers dwell and engagement data.
You’ll lose if:
…your store relies on hunches and a “that’s how we’ve always done it” mentality;
or if all of your stores carry the same SKUs regardless of local preferences; or
if your customers feel like they are “starting over” each time they visit.
First Steps:
Gather pertinent data on customers and make the data available to associates
inside the store. Share best practices store to store.
Fundamental #4: Let
Me Shop On My Terms
Thanks to
social media and our always-on lifestyles, people are in a constant state of
shopping. No longer is shopping planned — it just occurs. Shoppers have come to
expect that retailers are available to them anytime and anywhere they need them
to be. E-Commerce and in-store are no longer different things in the mind of
the 2020 shopper.
Table Stakes:
Give your shoppers the ability to buy online, in-store or via BOPIS (buy
online, pick up in store). Offer free shipping and delivery for products not in
stock.
Plus-Ups: Offer
peer reviews at the shelf via electronic shelf labels. Offer endless aisle
digital solutions that show the entire breadth of SKUs and utilize visual and/or
voice search. Enable purchase functions embedded directly inside social media
channels.
You’ll lose if:
…you force customers to walk to the back of the store to pick up their
merchandize; or if you force customers to drive across town to another location
to get an out-of-stock product; or if your e-Commerce sales and your in-store
sales teams still live in different, competing worlds.
First Steps:
Tie together inventory data online and store by store. Adopt a shipping and
delivery system all the way to the front door. Create an overarching corporate
sales function, rather than separate e-Commerce and in-store sales functions.
Fundamental #5: Give
Me A Reason To Come Back
When a
shopper makes the decision to visit your store, it’s absolutely critical to
make them feel like they made a good choice. You must think like a
choreographer when it comes to an in-store visit. It’s important to know when a
shopper wants attention and when they want to be left alone…to know what flips
their switch emotionally and what doesn’t. The 2020 shopper will come to expect
a bespoke experience from the time they park to the time they leave.
Table Stakes:
Have trained associates who genuinely care and come from a heart-of-service
mentality. Offer roaming checkout. Recognize and reward loyal customers. Have
basic in-store measurement systems to optimize merchandising strategies.
Plus-Ups: Offer
multiple mobile payment options. Automate mundane tasks to enable associates to
offer more attentive service, and to remove friction from the shopping
experience. Have an advanced measurement system that understands shoppers’
emotions and states of mind in different zones in the store.
You’ll lose if:
…your customers still have to wait in a checkout line to purchase; or if your
customers aren’t greeted or kindly approached during their visit; or if loyal
customers aren’t recognized and rewarded in some way; or if you don’t know
which areas of the store are emotionally lighting up shoppers’ brains and which
ones are turning them off.
First Steps: Hire
and train associates based on personality first, skills second. Expand POS to
include mobile payments. Install a measurement system inside the store that
gathers data like a physical web site and produces actionable insights.
Ed King is Co-Founder of
HighStreet
Collective, a “roll-up-their-sleeves” retail consultancy. They
recently launched their Living Retail Lab™ in Atlanta, GA. Many of the
technologies and initiatives referenced in this article will be featured and field
tested in their lab “live sprints” inside of Citizen Supply at Ponce City
Market in 2019. For more information, go to www.LivingRetailLab.com.