Late last year, Leger launched WOW Retail Monitor. It examined over 120 retailers in Ontario on 16 key dimensions of customer experience looking at retail offerings and quality of customer service, store look/feel, time spent checking out, and the degree to which the experience is customized for the customer. It has given us some great insights as to what it takes to bring true delight to the customer experience.
To provide some context to this research, we have identified some key retail trends for 2015. Here are the highlights:
Self-service. Customer service is not cheap. It’s very expensive. And it’s very difficult to do right. Self-service is great. There are lots of examples everywhere – in grocery stores, at airports, kiosks at hotels and even government services. This is wonderful for both retailers and customers because it’s cheap and also gives customers a sense of control as if they are in charge (they are not…). Having done significant amount of work in user Interface design/usability, this is a very exciting trend for us. This is where our experience in usability testing, user experience testing, and user path analysis can impact and improve the world of retail. As a senior manager at NCR Self-Service Solutions Group recently said, “Retailers need to be able to accommodate how shoppers want to use the technology, not the other way around”.
Cost Polarization is something we are also watching. Target is a great example of what is took place as a result of cost polarization. While luxury retailers like Holt Renfrew are reporting profitable years alongside the continued healthy growth of Wal-Mart at the other end of the cost spectrum, middle of the road retailers like Target were squeezed and had no room to spread its wings. With continued shrinking of the middle class, there is less and less room for those retailers occupying that space. Also consumers are changing as they experience cost polarization. Think about having to deal with a customer who drives his compact car to Holts, wearing a $10 t-shirt he got in a vintage store paired with a $200 pair of jeans, looking for $2000 designer earrings for his wife. Having to manage the expectations of these modern day customers can be challenging for most retailers.
Retail blurring is also a trend we have been witnessing for a number of years. A few years back we talked about retail blurring as grocery store selling housewares, drug stores selling groceries, coffee shop selling CDs, etc. Now, let’s add another layer to this blurring effect: We are now blurring the lines between online experiences and physical/offline environment – some call this the omni-channel approach. Modern day consumers are incredibly demanding. They want the same experience they have online – vast inventory, customized service and hassle free checkout – in the offline experience. A great example of this is Sneakerboy, a high-end, designer sneakers retailer out of Australia. Much like Apple stores, Sneakerboy has no fixed points of sale. Instead, consumers check out via a Sneakerboy app (on their own smart phones or in-store kiosks) that remembers their shoe size2, payment preferences and purchase history — and provides tailored information about new products. The store’s product release cycle is more in tune with the rhythm of the Internet than traditional seasonal drops, providing constantly updated, seasonless delivery of new products with often a quick strike release of special limited editions. But perhaps most importantly, Sneakerboy houses no purchasable inventory on site, only a range of samples in various sizes for fitting purposes. All transactions are processed via a single web platform and the product shipped within 3-5 days. A lot of retailers see this as the gold standard in what is possible when you combine technology and brick-and-mortar. Please take a look at http://www.sneakerboy.com/.
“We are always open” . Thirty years ago, on average, we slept for 9 hours every night. Now it’s just 6.9 hours. People are leading increasingly hectic lives. This is driving trends like drive-by dining, mobile banking and it’s also killing giant malls, which takes TOO MUCH TIME to shop. Also, many of us are suffering from some sort of ADD and getting increasingly bored with the same brands in the same places, which in turn is driving ‘pop-up’ retail and exclusive ‘limited time only’ products and offers. Modern day retailers need to think about how they can service their customer 24/7 as quickly as it can, every time.
Lastly, Focus on customer EXPERIENCE. This is not just on how retailers manage the in-store experience but how they handle the return experience, red-flagged experiences, and online experiences. We know that during a red-flagged experience, 90% of the customers are likely to come back if the retailer takes the time to address their concerns. One of the key features of our Leger Metrics solution (http://legermetrics.com) is about enhancing the process of customer recovery. When something negative happens at the store level, we want to make sure we can tell the complete story, to the right people within your organization as quickly as possible so that it can be resolved as quickly as possible. We then go one step further: if a customer is positively recovered, we want them to talk about it. We are going to enable this customer to talk about their experience through social media. An advanced customer recovery process is what differentiates Leger Metrics from our competitors. We are very proud to bring this to our clients.
Modern day retailing has lots of challenges and obstacles but understanding the intricacies of customer journey and focusing on those experiences at multiple contact points will get us much closer to delighting your customers.
Scott Cho is a senior member of Leger’s consulting team, providing high-level strategic advice and client services. As Vice President focusing on technology and retail category, he helps his clients in a strategic planning and development role. He brings extensive North American experience when consulting and personally moderating groups the Leger’s consumer products, technology and retail clients. His extensive quantitative and qualitative research experience include market assessment and new product development, corporate branding and marketing strategy development, customer satisfaction, stakeholder research, and advertising research.