While online spending continues to thrive, a new survey by Leo Burnett shows that all hope isn’t lost for brick and mortar outlets if they focus on excelling in the customer experience.
Despite the constant availability, variety and convenience of the web, 50% of consumers say that the in-store shopping experience and seeing a product in real life is still irreplaceable. Moreover, 43% said they still thrive off of seeing and touching the actual product before making a purchase. Leo Burnett surveyed 2,200 American shoppers to examine some of the biggest challenges retailers are facing with regard to sustain and grow sales — starting with the need to nurturethe consumer mindset.
However, there is a significant minority closing in on brick and mortars, with 20% of participants claiming that the Internet is a substantial and even preferred substitute for going to a store. Online research before purchase is also a key trend in the survey, with 34% of respondents indicating they gather information via Internet before making an in-store purchase.
This momentum of Internet retailing brings forward a new cycle consisting of dipping store traffic, declining sales, cost cuts and mediocre customer experiences.
According to Dr. Alan Treadgold, Head of Retail Strategy for Leo Burnett, brick and mortar retailers can break the cycle by addressing buyers’ needs — with better prices, product availability and stellar customer service. However, Treadgold says the main key is for stores to be “experimental, more engaging, more stimulating, and more theatrical than their online counterparts.”
While others in the market are suffering, examples of retailers breaking the cycle are seen primarily in value-oriented apparel outlets like Uniqlo, TopShop, Zara and H&M.
“What defines these retailers, and others like them, is a willingness to look at and if necessary change many of the practices in their business and to keep a relentless focus on delivering interesting, differentiating and value – and valued – experiences for their shoppers,” Treadgold said.
Another hot-button that affects the retail environment is application of in-store technology, such as electronic kiosks. Although this new adoption has been credited for developing the next generation of retail, shoppers surveyed claimed they often feel disconnected to the retailer and as a result, are unfulfilled with the in-store experience.
Instead of focusing on technological advances, Treadgold said it is important for retailers to focus energy on their brand and enhancing the shopping experience by engaging customers throughout the buying process. Stand-out brand characteristics are also vital for creating a stellar in-store experience to improve traffic and purchases.
Treadgold cites Apple, Ikea and Victoria’s Secret as retailers that excel in creating bold branding. Although these companies rank high within their category of retail, they project willingness to break out of their retail category mold and as a result, create a unique, differentiating experience in comparison to other retailers in their category.
According to the study, the main way to win in retail is for a company to focus on their cluster, be it ‘price led,’ ‘ideas led,’ ‘all about ease,’ ‘price plus,’ ‘efficient errands,’ or ‘all about atmosphere,’ and focus on what shoppers’ expectations are with each visit. To explain this method, Treadgold focused on the ‘all about atmosphere’ cluster, citing Williams Sonoma, Pottery Barn and Tiffany’s as examples of stores that offer a winning experience.
“Shoppers expect of these types of retailers that the stores will be atmospheric and will lead on delivering a sense of an occasion and an experience,” he said. “In this store type it’s about being stimulated, having effective sales support, serving up interesting ideas, having stimulating merchandise that’s presented in engaging ways and so on. So, as ever, the more we know about what motivates the shopper, the better able we are to deliver on their expectations.”