Delivering the best possible experience for customers is now table stakes for retailers. More product choice online has fragmented retail, reducing the power of the geographic monopoly that long-standing brick-and-mortar giants once held. Amazon customers can get what they need anywhere, anytime, and at the touch of a button. Given that level of convenience, digital native retailers are looking at how to step up their game.
Many retailers have come to assume that they need to compete with Amazon to keep their business afloat resulting in an intense game of “me too.” Retailers race to offer the same things as Amazon, such as same-day delivery, free shipping and the endless aisle. If they can compete with Amazon, the thinking goes, they can stay in the game.
Unfortunately, this is a large-scale logistics game that the vast majority of retailers have already lost, and will continue to lose as Amazon won it years ago. To succeed, they need to go in a different, more unique direction when it comes to serving their customers.
Customer Experience Has Many Facets
The truth is, Amazon doesn’t offer every dimension of the customer experience. It offers items at discounted prices, with convenient and low-cost shipping and huge assortments. Assortment, however, is not just about quantity, but quality. The shopping experience isn’t just about making it possible to buy something from an endless aisle, but it’s about being guided through a process that is supportive and helpful. Ultimately, a good shopping experience is one that makes your customer happy. And this comes in many different shapes and sizes.
You can differentiate from Amazon if you can provide delightful experiences. Pick another dimension of customer experience besides price, quantity and convenience—and be the best at it.
JC Penney is a solid example of a retailer winning at customer experience with its unique position as the largest hair salon chain in America, according to Fortune. In fact, the company rebranded its salons in 2016 to offer a “modern, cutting-edge salon concept” called The Salon by InStyle to further appeal to its target audience—lower-to-middle class consumers. JC Penney offers the opportunity to get a good haircut in their store, banking on the natural inclination for many to continue to browse the store and perhaps buy a blouse or a pair of jeans. In April, the retailer invested further in this effort hiring more stylists, rolling out an online haircut scheduling capability and partnering with Sephora for on-site, in-store beauty consultants. In many ways, no other retailer can compete with this unique in-store experience in the department store space.
E-commerce retailers have the opportunity to differentiate themselves in exciting ways. Take Huckberry, an outdoor clothing and gear retailer. They curate a limited and highly interesting assortment of products and market via clever emails that are sent to members a few times per week. Keep in mind, these are all products you could find elsewhere and receive faster. But the way Huckberry assists in the discovery process and collects and curates its offerings is unique – users get an experience that aims to be “part store, part magazine, and part inspiration.” This has fostered a network of loyal customers who wouldn’t have it any other way.
The Need for a Fundamental Retail Shift
In 2014, retailers first started to panic about how to compete in an evolving digital universe that seemed to be leaving them behind. Even though e-commerce remains less than 10 percent of total retail sales, margins have tightened to the point that they have dried up and store closures have spread. It was clear that traditional retail required a fundamental shift.
But where to start? Certainly, there are no easy answers to today’s retail challenges. What we do know is that a better customer experience offers retailers the best shot at success in a post-geographic, monopoly landscape.
First, create a plan. What other services can you offer? Where do you stand out? Next, make sure you can deliver the digital and mobile experience that your customers expect. No matter what, every retailer today needs to offer its customers content they want, informed by data. Include reviews, high-resolution images, videos, detailed product descriptions, specs and related products. Quality online content is what fuels customer interactions and inspires a connection, whether online or in-person.
Finally, you must measure the results of your customer experience efforts. The simplest way to do this is track sales and measure how people interact with your brand. But there is more: Go and walk the floors. Talk to your customers. Call them up on the phone. Send them thank-you gifts. Do the hard work, not just from behind a desk looking at the raw data, but from a qualitative standpoint—reach out and discover what is resonating with your customers. Find out if they are delighted with what you have to offer.
An Optimistic View of Retail and Customer Experience
There are many examples in the retail world of those taking advantage of opportunities to boost the customer experiences—from JC Penney’s hair salons to PetSmart’s store grooming experiences to Home Depot’s refocus on expert guidance. These efforts will play larger and larger roles for retailers as they transform in the constantly evolving digital age.
It’s important to acknowledge that the reported “tension” between e-commerce and brick-and-mortar is inaccurate. The tension exists between those lingering in a traditional geographic monopoly mindset and those that realize they need to provide a differentiated experience to better delight customers. Unfortunately, some will settle for the status quo and “the way it’s always been done” mindset, ultimately clearing a spot for themselves in the retail graveyard. Others are rising to the challenge, stepping outside of comfort zones and figuring it out—and these are the ones to watch.Favorite