By: Logan Rodriguez
The retail landscape as we know it today is no longer just about buying and selling products -- it's about quickly adapting to change and driving success through data-driven opportunities. With digital roots and the data access and agility that comes with them, e-commerce brands do this best; intelligently dissecting and acting on key data points to best serve the consumer through unique and relevant brand experiences. Yet despite this lead, many of today’s consumers believe that brick-and-mortar stores still reign supreme when it comes to making a purchase.
Unfortunately, many of today’s retailers are still pitting e-commerce against in-store, and it’s impacting both the brand success and the customer experience. But the notion that it’s a battle between ecommerce and physical retail is misguided and more complex, as the reality is both teams offer valuable aspects that contribute to the customer experience. For instance, 55% of consumers would rather purchase from a retailer with a physical store presence than an online-only brand because both online and physical stores offer situational advantages. This is forcing brick-and-mortar stores to become more agile in the face of data, and nobody knows agility better than ecommerce brands.
So how can brick-and-mortar stores preserve their reign on retail? Follow ecommerce’s lead, and take note of a few key lessons.
Lesson 1: Deliver on the data
Historically, digital-first brands have been better at getting to know customers, staying ahead of trends, anticipating changes, and utilizing data. In fact, digital-first brands drive action out of data really well; they send reminder emails about that item in your cart that's ready to be purchased, they target you with relevant ads as you continue to shop across the web, or they recommend sidebar products based on your past purchases.
So how can retailers bring those same data-driven experiences store side? For starters, internal teams must get comfortable with culling data. We recently performed an in-depth survey on the state of data across multiple industries and found that -- despite brands having access to more data than ever before -- nearly 40% companies struggle to take effective action on data. And unfortunately, retail stores struggle the most with data related initiatives (44%) -- with 39% of retail respondents admitting to personal struggles with how to convert data into actionable improvements.
Data is only as good as the action it inspires. Following in ecommerce’s footsteps, brick-and-mortar retailers should look for opportunities that create relevant, useful, and personalized opportunities for in-store shoppers. Today’s shoppers want a seamless omnichannel experience; they want the ability to shop brands across all avenues, and they want to have a great experience without much friction. Maybe it's a mobile push notification with current sales and promotions as soon as a shopper arrives on site. Or simply equipping sales associates with helpful customer data when they check out, so they can check up on the shopper’s latest purchase and make tailored recommendations. Whatever the case may be, brick and mortar retailers should be looking for ways to make the most of their data -- delivering the same personalized experience today’s shoppers find online.
Lesson 2: Tools, Training, and Transparency
Anticipating consumer demand is an ongoing quest. Each season retailers ask themselves: should we produce 1,000 units of a product, or 50,000? Another hit-or-miss practice is trend forecasting. A number of online companies have solved this problem by setting up lean supply chains and integrating useful internal tools to help streamline demand processes -- from consumers and from corporate. These tools are crucial for collaborating cross-departmentally; ensuring that each team is aligned and moving the business forward.
Ecommerce teams are armed with sophisticated analytics tools to help them better understand performance at every level. They are equipped with tools and training needed to meet the customer demand and ensure the company continues to progress. Go to a brick-and-mortar store, however, and team members are largely using pen and paper, spreadsheets, and bulky binders to handle some of the most critical areas of the business.
Those outdated tools leave store teams with little visibility beyond their four walls. What’s more, in 2016 we conducted a national survey of store managers and uncovered that only 42% of store managers felt they had the proper tools and training to be successful, never mind the lack of support -- one-third of store managers don’t feel empowered to make decisions quickly.
Additionally, inventory is a big area of inconsistency for retail stores; preventing total brand transparency from store to store. Versus their online counterparts, who have immediate front and back end transparency into their stock. This miss goes back to physical retailers getting comfortable with the uncomfortable, and utilizing data and updated tools on the back end to help maintain a consistent company protocol, and, ultimately, customer experience. If brick-and-mortar is going to compete with their online counterparts, it’s time to arm the in-store teams with the same level of tools, training, and transparency provided to ecommerce teams.
Lesson 3: Play to Your Strengths
Online-only retailers reap many digital benefits: their data collection capabilities are instantaneous and far-reaching, their online inventory is expansive, and they are able to intelligently advertise through a wide range of channels. Despite all this, brick-and-mortar stores continue to be consumers’ preferred place to complete a purchase -- in fact, 91% of shoppers research products online, then purchase in-store.
Just as ecommerce sites capitalize on the digital footprint, brick-and-mortar retailers have the opportunity to fulfill the visceral needs of shoppers.
A holiday survey we conducted in fall of 2016 showed 65% of shoppers turn to stores for their holiday shopping so they can feel, touch, and see products before they purchase. For many shoppers, in-store offers more than just instant gratification; it’s where retailers have the opportunity to bring the brand to life.
Conversely, 70% of holiday shoppers reported abandoning a purchase because of a bad in-store experience, citing poor customer service and rigid return policies as the top two reasons. For physical retailers, positive store performance often relies on the knowledge and attitude of sales associates. If their training is lacking, the customer’s experience will be as well.
Brick-and-mortar retail isn’t floundering. Year after year, customers continue to convey when it comes to shopping preferences, traditional trumps digital. But in order for brick-and-mortar to remain relevant for future years, they must be willing to work the areas where they are weak and ecommerce is strong.
About the Author:
Logan Rodriguez is the Strategic Account Director at Square Root. With over 20 years of experience in the retail industry, Logan is an expert in store operations and driving brand initiatives. Prior to his role at Square Root, he was with Macy’s for nearly a decade. He held several different roles with Macy’s including Corporate Manager based in New York, District Merchant responsible for 13 different stores, and VP Store Manager with over 200 Associates.
Image courtesy of flickr creative commons: https://flic.kr/p/5jiZwH
More exclusive content from Pointofsale.com:
Get The Point of Sale News once a month, once a week or once a day. Subscribe here.