Retailers, Reach For The Minimum By 2020
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.
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 Without the red tape, old leaders set in their ways, and outdated back-end technologies, these pure plays have been able to serve starving shoppers what they’ve been craving in a brick-and-mortar experience — and they’re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.