In Europe and the US, there have been a significant number of store closures in recent years. However, there is a recognition that if done right, the brick and mortar store still has a significant role to play.
The key to deriving value from stores is to enhance the customer experience, which means the store needs to be connected. The user journey through clienteling is one aspect of the store experience, but some retailers are thinking about the wider connected store in areas such as interactive displays, RFID tagging, and beacon technology.
Beyond the layer of the connected store, there is still a retail operation that needs to be addressed and deliver on its promise. The operations cost to maintain stores is high for a number of reasons. It can be the way the stock is managed from production to end of life, or because the business model is not different enough, or not good enough, or not profitable enough. Maybe the cost of operation is high because retail changed forever, and changing the way things were always done in order to make the business profitable again and meet new standards is proving to be more difficult than making a fresh new start.
As a response to these challenges, most retailers have decided to downsize and some are making huge investments to maintain the connected store. But something fundamental seems to be missing – and that does not seem to be technology alone. The fundamental insight from our discussions during 2018 is centered on people, from users to consumers. The modern value chain demands innovation – but this time technology is just a consequence of the change, and it should not be the reason why people change.
Why are stores important?
Stores are expensive to run and maintain. Generally, foot traffic is falling, but stores are still an important sales channel. When customers are asked what they value in the in-store experience, the following reasons are highlighted:
- Store assistant knowledge and expertise is appreciated
- Customers want to touch, see, and feel products
- There are still many assisted-sales scenarios – bicycles, jewelry, eyeglasses, clothes
- It’s very common to view products online and buy them in the store
How can retailers drive in-store growth?
There are plenty of opportunities to use innovation in stores. Based on feedback from the retailers we work closely with, we have designed a number of innovations for the “complete experience” of the connected store. These innovations do not require a complete reinvention of the store concept, so they can be adopted immediately and independently of the retailer’s digital maturity level.
- Speed to close: This is the ability to identify a product, check availability, request delivery from the back of the house, check out through an app available to the store’s assistant, and deliver the product to the customer in the store or to an address the customer provides.
- Back of house runner app: Push requests to someone in the back of the house to “fetch” products for a sales associate working with a customer. Communication between sales assistants inside the store is often neglected, and it’s one of the main reasons contributing to in-store inefficiencies, particularly in big department stores.
- The magazine clip: It is not uncommon for a customer to come into a store with a page from a magazine or a photo on their phone and ask the store associate if they have the item in stock. The store assistant can scan the customer’s picture and use image-recognition technology to match the item to a product.
- Communicating via social media: Many store associates, especially personal shoppers, communicate directly with customers through social media (Facebook, SMS, Instagram, etc.). But none of that engagement is captured in the organization’s contact history. Also, GDPR compliance is sometimes not well managed, so a customer profile is not available. It should be possible to see that conversation it in the customer’s interaction history so the organization knows the level of engagement and previous conversations to avoid duplicated marketing (for example).
- Personalized service: A retail associate can create a personalized “look” for a customer and share it using their preferred communication method. This enables associates to be proactive in promoting new product lines and cross-selling with other products they think a customer may be interested in.
- After-sales: For too long, the after-sales process has been, quite literally, an afterthought that typically is manually intensive and paper-based. Instead, it’s possible to give store associates the ability to create service requests (submitting tickets automatically, including attaching photos and notes, for things like alterations and repairs).
To drive growth in the store, store associates need technology to support their work on the sales floor. Without technology, sales associates are powerless and can’t adequately serve customers. New in-store solutions centered on the user and the customer need to be cloud-based and connect simply with legacy systems. Traditional methods to digitalize the business will not deliver results fast enough nor well enough.
Decision-making for the connected store needs to come from the area of the business with commerce and/ or digital marketing experience. This is a completely different way to approach digitalization of a retail sales channel, but ultimately it is how you will bring results.
How can you set up your organization for success and be sure you’re providing products and solutions customers can trust? Visit us at NRF: Retail’s Big Show, SAP Retail to learn more about experiences you can trust.