How can retailers satisfy entitled consumers?

Discussion
Photo: RetailWire
Oct 03, 2016
Al McClain

By now, we know that shoppers are empowered to research products before entering a store, search for better values online while in a store, and sometimes know more than a store associate. In a Forrester session at the National Retail Federation’s (NRF) Digital Summit (Shop.org), Melisa Parrish and Shar VanBoskirk (both VP’s and principal analysts for Forrester) said that the shopper’s journey has gotten so digitally connected shoppers feel entitled, which they define as “empowered with attitude.”

For these shoppers, many of whom are always connected to a digital device, their expectations have risen a lot. They expect to get what they want at their moment of need, in the appropriate context. The Forrester experts also say that the digital distinction has dissolved so consumers don’t distinguish between digital and physical experiences.

The advice of the speakers for retailers and brands is to be human, helpful and handy. Retailers need to scale what their best associates do well — solving problems vs. pitching customers. Employees need to be agile, flexing to situations, treating customers as individuals with individual needs. Mses. Parrish and VanBoskirk also say e-mail remains the most effective way to reach consumers, but it must be contextual and relevant. They advise not to get into the shiny object syndrome —chasing the latest trendy tech tool to try to solve strategic problems. And, with so many social channels, they advise not participating in all, but making strategic investment in those that work best for them.

But back to that entitled consumer for a minute. In a RetailWire interview, IBM VP of strategy Steve Mello said demanding consumers are killing retailer margins, as consumers go from wanting delivery in two days to one day to two hours to having pizzas delivered by drone in 30 minutes. And they usually want it free. He advises layering an order optimizing system on top of an order management system. That way, a retailer or brand can find available product and determine where and how to ship an item, with the software considering factors such as weather, distance, employee availability, overtime pay, delivery company, etc. So, at least the retailer or brand doesn’t lose as much money trying to keep the increasingly demanding customer happy.

Discussion Questions: What are the best ways to satisfy the increasing demanding digitally connected shopper? Are there any ways to improve service and keep the cost of doing so reasonable?

Braintrust
"Retailers need to escape the mindset of reacting to and against technology — embrace these consumers because they're only going to grow."
"PLEASE! How many retail employees “pitch” customers? It’s not tin siding."
"When a retailer can provide helpful service, not just friendly service, price becomes less relevant."

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15 Comments on "How can retailers satisfy entitled consumers?"

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Jasmine Glasheen
Staff
Jasmine Glasheen
Contributing Editor
1 year 2 months ago

Improving service means monitoring customer interaction both on-floor and online.

Associate training is the key factor in appealing to the digitally-connected shopper. The customer should not know more about the products than the staff, which means making sure associates are trained in the information your store offers online.

Executives that read customer reviews and make adjustments to their online presence will be more successful than those that just don’t want to deal with the plebes. Management can’t afford to remove themselves from the customer experience.

James Tenser
BrainTrust

You raise a point worth emphasizing, Jasmine. In the pre-web days, it was a common trope for us retail journalists to insist that retail success was highly dependent upon executives who knew their stores well. The more you visited the stores, we reasoned, the better feel you might have for your customers’ shopping experiences — not to mention the competency of your merchandising and operational functions.

In a Unified Commerce world, these principles are no less true. The main difference is that the points of contact with shoppers are far more numerous and varied in nature. Poring through individual reviews may be too detail-oriented for c-level executives, but if I were in the corner office, I’d require my team to provide curated summaries. I’d make an online purchase from my own company every few days, and yes, I’d still visit stores every week.

Jasmine Glasheen
Staff
Jasmine Glasheen
Contributing Editor
1 year 2 months ago

Absolutely. Although individual review-poring isn’t necessary, getting a feel for online interactions is. Ecommerce is growing, but nothing turns off a customer faster than a heinous in-person experience. Well-executed brick and mortar, or no brick and mortar at all.

Mark Ryski
BrainTrust

While digitally connected shoppers may very well be more demanding, at the end of the day all shoppers want the same things: well merchandised, easy-to-find product, helpful store associates and a competitive price for the value offered. Today many retailers do not provide any Internet access to store personnel. When a digitally-connected customer comes into the store and has information that the store associates don’t have, even about their own store’s offerings or promotions, it makes the store associate look particularly uninformed. Providing store personnel with access to online information by allowing them to access the store’s Wi-Fi using their own personal device, or providing a tablet associates can share, is a cost-effective and reasonable way of enabling store personnel to better serve all shoppers — and especially digitally-connected ones.

William Hogben
BrainTrust

It’s a mistake to think of customers as “entitled” — they’re not demanding anything they don’t get at home from Amazon or Netflix, or on the go from Uber and Yelp. These digitally “demanding” customers are the cheapest to interact with but they have to be met where they are — on their phones. Retailers need to escape the mindset of reacting to and against technology — embrace these consumers because they’re only going to grow.

Matt Schmitt
Guest

I agree. The expectations and “demands” are being fostered by new players and new business models and are not really driven by the customers asking or demanding things. They are just reacting and expecting based on new offerings and approaches. Retailers need to adapt to the competition and to alternative and innovative approaches, and the customers will respond.

Doug Garnett
BrainTrust

And a lot of those new business models are money losers. Makes it a bit more frustrating to consider. 🙂

Bob Phibbs
BrainTrust

“Retailers need to scale what their best associates do well — solving problems vs. pitching customers.” PLEASE! How many retail employees “pitch” customers? It’s not tin siding. The conceit of many retailers is that merchandise doesn’t have to be sold any more; that it is all about price.

It is if you are the 10 percent of those shoppers who have already decided to buy the item. The other 90 percent are in the consideration and awareness stages. They don’t need a problem fixed — they need to be intrigued and engaged with by a human being, not a buying app.

Patricia Vekich Waldron
BrainTrust
Patricia Vekich Waldron
Retail and Marketing Expert; Former IBM Executive
1 year 2 months ago

Retailers need to move their focus from digitizing their front-end to re-engineering their back-end processes so they can profitably fulfill on their brand promise.

Ori Marom
Guest

Al’s article presents a good, concise and up-to-date summary of the problem of physical retail today. In economic terms, he is describing a market failure. While many shoppers value the services rendered by physical stores they are not compelled to pay them anything over the lowest online price.

What is the solution? Better service? Better service does not compel the customer to pay anything yet increases the costs to the store.

Therefore, providing better service is not the solution. A human touch is not the solution either. These are certainly nice things to have, but stores will need a COMPLETELY new business model in order to survive. It begins with installing in-store technologies that allow physical stores to charge referral commissions.

Shep Hyken
BrainTrust

Retailers must be prepared for the knowledgeable shopper. If people on the floor don’t have the answers, they must know who to go to or where to go to get the answers. Properly training employees to be ready for the smart customer will be paramount to gaining the customer’s trust and confidence, which can turn into a sale — and ideally future sales from customers who recognize the value of doing business with a company that properly trains employees and adds value. When a retailer can provide helpful service, not just friendly service, price becomes less relevant. Just look at how Ace Hardware competes against the big box stores and the Internet. They add value with knowledgeable sales people who provide some of the most helpful service on the planet.

Ken Morris
BrainTrust
Personalized services based on customer context is the key satisfying consumers. BRP defines customer context as “the interrelated factors of customer insights and environmental conditions that make the shopping experience relevant.” Retailers have the ability to know what a customer has in her closet, what she previously purchased, what she browsed on the website and abandoned in her online cart, when she is near your store, what the weather is right now and even exactly what she is browsing and where within the store. According to a new report by Salesfloor, sales associates are an integral part of in-store experiences, with 87 percent of consumers basing purchase decisions off the advice of a retail employee. Fortunately, we are seeing a shift in retailers’ focus to investing in associate tools that enable guided selling. According to our 2016 POS survey, 40 percent of retailers indicated that “empowering associates with mobile tools” was one of their top three customer engagement priorities. This survey also found that only 14 percent of retailers currently offer “suggested selling based on… Read more »
Ralph Jacobson
BrainTrust

One key metric to keep in mind as you strive to continually satisfy today’s shoppers is the cost to serve. It’s important to focus on reducing the total cost-to-serve with last mile intelligent fulfillment, as alluded to in this article. Intelligently balance fulfillment costs against service to protect margins, utilize store capacity, and meet consumer delivery expectations as those expectations continue to rise. Expand your ability to meet demands for how, when, and where customers receive orders during peak periods by leveraging stores to maximize capacity. Do that to help manage costs to serve.

Vahe Katros
Guest

I’ll just take this question to read: How can retailers satisfy consumers?

And then I will thank the entitled shoppers for providing me with insights to continuously improve my business. That’s what good brands do. For now, in the event these shoppers identify a gap in your methods, treat that as an opportunity, tell your associates to empathize and learn from these customers, and offer to schlep (Yiddish word for non-digital interactions) to meet your customers’ needs. In the event your customer appreciates your chutzpah, they may shift from entitled shoppers to advocates on social media. Having a culture of learning from your most demanding customers sounds like the tradition of retail. L’shana tova!

Doug Garnett
BrainTrust

Interesting conversation. And we need to remember the irony: The digital things raising customer expectations are money losers.

Next day delivery all the time? What a really poor strategy for anyone who wants to build a strong business. Yet Amazon has validated the idea that consumers should expect that … and their investors have paid to create the expectation with Amazon losses.

I’m reminded of a friend of mine, an executive at the 1990s ATT Wireless, who observed that wireless providers had created their own graves by given away handsets. They had chosen as an overt strategy to convince consumers that the most critical and most expensive part of the system was worthless. And the 2000s showed he was right — they’d created a real problem.

But we should take hope that AT&T seems to have bitten the bullet and returned to a sane structure. They have moved their plans to where consumers buy the phone. And they seem have succeeded while doing it.

wpDiscuz
Braintrust
"Retailers need to escape the mindset of reacting to and against technology — embrace these consumers because they're only going to grow."
"PLEASE! How many retail employees “pitch” customers? It’s not tin siding."
"When a retailer can provide helpful service, not just friendly service, price becomes less relevant."

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