Photo: LevelUp
Survey: Customer experience tech rivals personal attention from staff
According to a study from Boomtown, “digital forward” brick and mortar stores and restaurants — primarily national stores and fast casual restaurants — have raised consumer expectations with their on-premise tech-investments. The omnipresence of those solutions, according to the provider of IT-support for stores and restaurants, is “increasing pressure on regional and smaller, independent stores and restaurants to transform their own customer experience or risk being left behind.”
An accompanying survey of 1,000 consumers found that in-store tech, such as online ordering capabilities, digital payment processing and self-checkout systems, is “now a critical part of a ‘good customer experience,’ rivaling personal attention from staff and traditional loyalty programs that have always kept consumers coming back for more.”
For instance, asked about expectations for local stores, 38 percent of the survey respondents liked online ordering and local pickup and 29 percent expected location-based promotions. Asked about regional stores, 49 percent liked a wide range of digital payment options, 36 percent liked online ordering and local pick up and 28 percent wanted self-checkout options.
The study found that technical glitches are fairly common, and that many consumers experiencing inefficient or malfunctioning technology will frequent that business less often and recommend it to others less. Common problems included slow or malfunctioning electronic payment systems, faulty or unavailable WiFi, incorrect inventory information online, ineffective customer support calls and malfunctioning self-service kiosks.
Consumers who prefer to shop at small, local/independent stores were more likely (14 percent) to encounter technical glitches while shopping/dining on a regular basis compared to all consumers (nine percent).
On the other hand, the survey found that a positive experience due to smooth, well-functioning technology in-store or in-restaurant led to positive action; including:
- A rise in brand confidence (46 percent)
- More frequent visits to the business (44 percent)
- More recommendations to others (43 percent)
- More frequent purchases (41 percent)
Discussion Questions
DISCUSSION QUESTIONS: Do small independent stores and restaurants get punished for lacking good in-store tech solutions widely available at larger chains? What advice would you have for smaller regionals or independents in gauging in-store tech investments?
Poll
BrainTrust
Laura Davis
Founder, Branded Ground
Lee Peterson
EVP Thought Leadership, Marketing, WD Partners
I think there is too much emphasis on the need for in-store technology and not enough focus on well trained in-store staff. It is true that many customers opt for self-checkout systems, but usually because the register lines are too long. Then when the self checkout system makes an error, and you have to wait for a human to come to solve the problem, there is frustration and it’s not a pleasant experience.
Technology is great when used wisely. Certainly ordering online and being able to pick up the item in-store is excellent, and if the store is out of the item or doesn’t stock it and you can order from the store online, that too is excellent. However, the more we take away the need for the human interaction with the customer, the higher the chance we will drive the customers away and they’ll either find competitors who make them feel important or order more of what they want online.
With so many stores dealing with less traffic, I don’t think that investing in technology that doesn’t enhance human interaction is going to be the solution. Think through the technology you’re investing in and listen to your customers and not the surveys done by the companies who sell the technology.
Technology is a means, not an end. I strongly agree with your perspective, Art. I honestly can’t believe anyone except a few Silicon Valley coders crave a more “tech-forward” shopping experience. In fact, I believe retail tech is most successful when it is so seamless that it fades into the background, and empowers shoppers and staff to succeed with less effort and greater accuracy.
Digital payment options are available to independents. They just have to make sure that their solution providers offer it, or are vigorously working to make it available. Little can replace good personal customer service, and independent owners are in a position to do a better job of training and of delivering the message to their staff more effectively than their chain counterparts.
Customer experience technology used for brand and product promotion typically pays for itself in less than six months based on increased traffic and conversion. At the current low cost of financing smaller retail, food services and consumer services locations can benefit from the modernizing effect of digital media. Large brands are increasingly using dynamic messaging and interactive displays to present products in their best light, and smaller stores can benefit from work already being done by their providers. Digital in-store media closes the competitive gap between large and smaller retail locations.
You lost me … and lost credibility when it was stated, “The study found that technical glitches are fairly common.” Shiny objects that don’t work reliably are hardly going to punish independents. Having the ability to pay a restaurant check when I’m ready on my own phone or tablet when servers’ hours are being cut repeatedly leading to long wait times — excellent. I don’t see the issue being the same in a brick-and-mortar store. That’s not to say they shouldn’t be looking at these options but they are not as posited table stakes, especially when they are not reliable.
Agreed on the “Shiny objects” aspect 100 percent. Just because the technology is the latest and greatest doesn’t solve the core problem of good service. If it is an essential function (i.e., checkout) and can be done correctly, efficiently and seamlessly then I would recommend independents go for it. Otherwise, be wary of the claim that chasing something new (for the sake of “new”) will generate more business. Consumers (albeit fewer of them) are going to the larger chains for selection and convenience — I don’t think this is why they are visiting independents.
Some consumers may like more technology at retail, but before embracing tech, retailers must ensure that it will consistently work. Otherwise, it’s worse than having no tech at all. Small retailers should adopt the technology they are comfortable working with and continue to emphasize their differences from large, national chains. And they should monitor technological advances, looking for reliable technology that can be easily added to their stores to enhance the customer shopping experience.
Let’s not forget that much of mobile POS and simplified payment options were driven by the independents when the technology first launched. iPad POS software and options like Square started with the small guys and helped to set customer expectations. Sure, things like digital signage or video analytics might be more expensive to roll out but plenty of lower-cost options exist for independents. They can use these options to remain nimble and “test and learn,” since they are not concerned with legacy IT or large-scale rollout.
I feel like it’s the opposite, that smaller retailers have the advantage in this area. I’ll take both of course (see also: the Starbucks app and associates) but when push comes to shove, a great associate beats button pushing every time in my book.
I agree, small retailers have the ability to customize and adjust the technology they utilize in a much nimbler manner.
Agree! And independents who pride themselves on good service will go out of their way to teach their associates.
This is a non-issue, when comparing customer service, and offering technology to customers. Direct customer service is what consumers crave and business thrives on. Consumers want personal interaction not technological options. Other than basic connectivity, consumers enjoy being helped, not finding help, and this is the key to successful retail.
Yes, consumers like services, whether they be technical or in person, that positively impact their shopping journey. And they want those services to work. While small independent stores may not jump on the tech bandwagon, there are many ways for them to equally provide a positive shopping experience. All retailers need to be thinking about serving their customers in one way or another. For my 2 cents.
It seems to me that personalized service is the one trump card smaller retail has to its advantage. I don’t think that will ever change. However, when technology is merged very effectively (and working) into the in-store/in-restaurant experience of customers, it is perceived as a message to the customer that the business cares about improving their experience and receiving input from the customer’s point of view. Amen to Bob Phibbs’s comment, “When I am ready to pay my check …” — be sure to read his post.
Small retailers that are thriving are not doing it because of technology … it’s because they are providing what so many big retailers are not — great experiences driven by a caring staff and a genuine commitment towards hospitality. They care, and their shoppers know it.
Many of us are in sync on this. Does that mean we are saying that many retailers who cannot communicate the vision down to the stores (Starbucks excepted) rely on technology-provided CX to make up for that deficiency? Hmmmm…
It seems that it depends on the business, its audience and the size (one- or two-store mom-and-pop vs. small regional chain). I couldn’t imagine most of the small retailers I patronize suffering from a lack of technology. I think this is because in many instances retailers apply technology to make things more convenient, and for mom-and-pops in areas like books, music, etc., convenience isn’t what customers go there looking for. Rather they’re seeking curation, product knowledge, connection/sense of community and the like. I think to some extent the same is true of restaurants — if the food is good and singular at a place that has been open forever, the cash register being a shoe box is not only unimportant to the customer experience, it can be part of the appeal. And when it comes to promotion — cost of implementation aside, technology can even be brand-incongruous. It would hardly make sense for an artisanal tchotchke shop to go with a big flashy display.
Things may be different with, say, busy local/regional grocery chains, where technology could be implemented to help speed along checkout. Then again, though there’s a line at the grocery story almost every time I visit — there is an equally long line every time I go to Walgreens. So I am not sure how far ahead tech investment is putting big national chains in that regard.
Consumers are not very tolerant of inefficient processes or anything that creates friction in their shopping experience. That said, I do think they will cut some slack for small business operators, as they understand that they don’t have the same level of financial resources or IT staff as large chains.
For independent and small regional chain retailers it is helpful to choose technology from a vendor that provides a one-stop shop for hardware, software and support. Also, leveraging cloud-based applications for almost everything is a smart approach.
IT is not a core competency for retailers — but it is a necessity. A cloud approach enables retailers to significantly reduce infrastructure, improve security and increase operational effectiveness. Given the move to the cloud and a growing preference by retailers for utility-based, as-a-service solutions, we see the next step in this evolution as “IT-as-a-Service.” This is a real opportunity for retailers with a one-stop-service for all their IT needs — hardware, infrastructure, applications, implementation and maintenance services. At the store level, moving to the cloud creates a lean environment with low/no maintenance costs, centralized security and a true real-time environment that changes everything.
I’ll continue to believe the primary shopping and buying drivers are…brand(s), product, staff, tech. If the whole experience is tech-enabled, all the better. But if it’s not tech-enabled, small stores and big stores alike can still compete based on the first three criteria.
I often visit a mall where there is an Apple store almost directly across the aisle from a Microsoft store. Both are as tech-enabled as you can get. The Apple store is always jammed. The Microsoft store is always crickets. In China they are seriously tech-enabled with WeChat and AliPay. In a little over a year I think the only credit card I ever saw emerge from a wallet was my own. It’s a very level playing field when it comes to tech-enabled retail. So it comes immediately back to brand, product and staff. Brand plus product rule. Staff can rule or at least differentiate. Tech is a short-term advantage for some until it becomes a level playing field.
I don’t view this as an either/or between technology and personal experience.
In a fast food or casual restaurant, speed and efficiency are often critical. Technology helps to address this and therefore improves the experience for customers. However other things, such as needing advice or recommendations, are still more the province of personal service and human interaction.
As for small retailers being at a disadvantage — I don’t buy it. Almost every good niche coffee shop and retail chain I visit use platforms like Square for payment and ordering. It’s super efficient and better than the registers of most larger retailers.
Not relying on technology is where independent retailers will win every time.
Handheld checkout and free Wi-Fi aside, there is nothing better than one-on-one interaction and personal service from a store associate. Smart indies use technology as a tool to enhance service, not to replace it.
Often settlers get the land, and pioneers get the arrows. Independent retailers have the benefit of seeing what’s been trialed (often at the highest investment cost) and what’s failed, and what ultimately gets consumer traction. They then have the opportunity to invest at a lower premiums. There are so many of these technologies from payments to e-commerce that have been democratized with very low costs and barriers to entry.
It’s an increasingly younger consumer with nearly half of the workforce being in Gen Y and Z in the next few years. That means a digitally-native consumer where in-store technology is just a brick in the wall. One that must marry to the rest of the retailer’s presence offline and online.
The cost of different systems are coming down low enough that even the smaller independent stores and restaurants can afford them. Furthermore, the smaller independents have an opportunity to create a local or boutique experience that the big ones can’t always replicate. That’s worth something. Combine that with amazing service and involvement with the local community and customers will endear themselves to the local and small independents.
It’s critical for these smaller independent stores and restaurants to be smart in how they invest in technology. They’ll need to understand what’s most important (the moments that matter) to the customer’s experience. Once those moments are identified, the next step is to understand their performance in those areas, and determine how to best meet the need of a customer through either a technology or people solution. Under or over-delivering in technology or the people space could be a problem — the magic comes in knowing when customers want self-service technology options versus human interaction.
I had to get a laugh at the survey question “…ALL retailers”: does a dry cleaner need BOPIS? Does a barber need self-checkout?
So this illustrates the perils of one-size-fits-all recommendations. Given the limitations that indies face (financial, technical, etc.) I would say the only “must have” is a web site (that gives useful and [should be] obvious info like location, hours). Beyond that they should allocate their resources as they see fit. I’d much rather a business spend time improving product sourcing or expanding their hours than developing 15 different ways to pay. Of course many tech innovation don’t take many resources, and the excuse of “can’t” is really “don’t want to” but that’s for each individual to decide.