The Competitive Advantage of In-Store Experiences
By Steven Skinner and Karl Swensen
Major retailers have successfully faced down emerging e-tailers and their aggressive pricing tactics by upgrading their e-commerce platforms and readjusting their pricing to strengthen their hold on shoppers. To fully complete their turnaround, however, they must judiciously apply bricks and mortar to their competitive advantage.
According to Cognizant’s fourth annual survey, “2013 Shopper Experience Study: Rise of the Individual Shopper,” consumers still value the in-store experience, but have exceedingly higher expectations.
In addition, 83% of retail sales still originate from in-store purchases versus those made online. As a result, immense opportunities exist for brick-and-mortar retailers to use their physical world strengths by focusing on retailing fundamentals, providing informational consistency across all touchpoints throughout the shopper’s journey, and empowering associates to make the physical world experience as good as or better than the online one.
Focus on the Fundamentals
A brick-and-mortar store allows shoppers to interact with products in ways that can’t be matched by the capabilities of online retailers. The tangible, physical aspects bring value to the in-store experience but also means fundamental store operations must be highly functional and efficient to overcome any pricing advantage found online.
Shoppers rate price and product selection among the top influencers on purchases; their top dislike is out-of-stocks and unavailability to purchase. The stakes are incredibly high, given the myriad of alternatives shoppers have to purchase elsewhere.
When dissatisfied with the price or product availability, many either leave the store or purchase online. To mitigate this risk of the shopper leaving empty-handed, retailers should get the price right in the first place, offer a meaningful assortment that is almost curated to the shopper’s needs and desires, and keep adequate inventory in stock by using predictive modeling. These tactics can help reduce the odds of lost purchases.
Provide All Touchpoints Throughout Shopper’s Journey
Not all shoppers are created equal, nor are their respective journeys. Retailers need to realize that a shopper’s journey does not necessarily start when he or she walks into the store.
With the advent of smartphones and tablets, “showrooming” has reached epidemic proportions. We all know many shoppers browse at a brick-and-mortar store before purchasing online. Retailers can combat this by seeing the shopper’s journey as non-linear, and making themselves accessible and available at all touchpoints.
Most retail executives believe their omnichannel implementations lag the competition. This could not come at a worse time since most fully expect mobile shopping to double over the next year. Consequently, it’s important that retailers provide consistency across all channels. Shoppers want a seamless shopping experience — both in and out of store. Doing so can greatly influence their final purchase.
Empower Associates to Complete the Experience
Shoppers increasingly expect personalized in-store experiences. In fact, it was a top-rated feature/service among surveyed shoppers in Cognizant’s recent survey. Not surprisingly, 32% called for an improvement in in-store customer service skills.
Brick-and-mortar stores can turn this negative into an advantage by arming their store-level associates with greater product and service knowledge than can be gleaned online. Research has shown that retail sales increase by 25% to 50% when shoppers are helped by a knowledgeable associate.
Retailers should train and provide associates with the proper resources needed to fulfill shoppers’ immediate needs. This can be done, for example, with new tablets for associates, which provide them with access to information and insight to help convert browsers to buyers. When an associate has enough knowledge to either price match against a competitor, find a product in-stock without asking a manager, or leverage direct fulfillment capabilities to ship customer orders, the selling process becomes more efficient. In turn, it also provides a better in-store shopping experience, which increases loyalty.
In Summary
Providing the ideal customer experience in your stores is really an ongoing effort. Retailers must first take stock of how to delight the customer and then gradually build key omnichannel capabilities. This will allow them to carefully work through the retailing fundamentals needed to deliver a seamless omnichannel shopping experience that compares favorably with competitive retailers — whether online or not.
Steven Skinner is senior VP, retail and consumer goods consulting, Cognizant; Karl Swensen is assistant VP, retail consulting, Cognizant.