BrainTrust Query: The Customer is Wired…Are You?
Commentary by Doug Stephens, president, Retail
Prophet
Through a special arrangement,
presented here for discussion is a summary of a current article from
the Retail Prophet Consulting blog.
There’s an impending "parting of the
seas" taking place with respect to the nature of in-store experiences as we
move into the future. It’s creating an ever widening gap between what I refer
to as "fully automated" experiences on one side and "fully animated"
experiences on the other.
The fully automated experience will involve in-store
systems that enable consumers to self-manage every aspect of their shopping
venture. In these environments technology is the hero and is merely supported
by people.
The fully animated experience on the other hand will be a very human
effort that goes well beyond simply providing service. Sales associates take
on the role of trusted advisers to consumers who are prepared to pay a premium
for their expert advice and personal attention. In these environments people
are the heroes and are merely supported by technology.
Opinions are likely
to vary greatly on this but here’s a short list of what I consider to be essential
technologies for small and medium sized retailers to support that animated
store experience:
1. Local Search: The future of search technology is undoubtedly location-specific,
so at the very minimum, retailers should be making sure that their business
is listed with free services like the Google Local Business Center.
2. Social Media and Networking: Blogging, Facebook, Twitter, Flickr,
and YouTube are not only powerful tools to market one’s expertise and value
but actively using them will also make a business rank higher in web searches.
3. Mobile-Optimized Website: Increasingly, web searches are being done
while consumers are on-the-go. How your website appears on a mobile device
can make or break the customer’s decision to visit your location over a competitor’s
store. So, in addition to having a modern, easily navigable website, it’s worth
investing in formatting it to be visible and functional on the small screen.
4. Portable Point of Sale: One of the most common complaints among
customers is having to wait to pay for their merchandise. One way to alleviate
long lines is to equip the store and perhaps even each sales associate with
a portable point of sale device. Once reserved for major retailers, mobile
POS programs and hardware are now within reach for most retailers, provided
they have some basic system requirements.
5. Customer Relationship Management (CRM) Systems: Increasingly, consumers
are less homogenous demographically, more elusive and far more fickle in their
preferences. A quality CRM system will allow you to collect, manage, and act
on reliable customer data. With good information you can keep the business
in sync with the flow of customers and the pattern of needs and demand. Furthermore,
you can communicate relevant offers and value added information to the appropriate
customer groups at the right time.
6. Mobile Marketing: Mobile marketing, a comparatively new technology,
is already available in various formats to small retail. SMS (text message)
programs and even location-based couponing platforms that deliver offers to
consumers who come within proximity of the store, are available to forward-thinking
retailers who want to meet the needs of tech savvy customers.
Discussion
Questions: What minimum level of technology do small and medium sized retailers
need to present an "animated" experience? What do you think of the
suggestions offered in the article? Which ones might be missing?
Doug, as always, has some very useful advice here. In a world where many independents don’t have a good website though, many of these suggestions would be a hard sell. Additionally, while major urban centers are keen on technology, reality right now is not as broad. I think a more apt question might be, “Some customers are wired…are you?” The greatest untapped technology is the human being standing on the sales floor–waiting to be turned on.
Doug, as usual, has produced a terrific, thoughtful article on the topic.
There’s a couple of caveats. The first is best described by an old saying at ad agencies–“nothing sinks a bad product faster than great advertising.” The point being that, with the exception of local search, each of the listed areas requires a fairly significant investment in discretionary resources. In this environment, it’s a worthwhile exercise to consider whether to put these resources into improving the in-store experience, for example, versus putting them into something that will attract more customers into a poor experience.
The second caveat is to make sure that the target customer is someone who actually uses the technology. The assumption that everyone uses Twitter, Facebook, etc, is certainly reasonable relative to Gens X and Y and a growing percentage of boomers, but is still not pervasive. It’s always a good idea to know your customer as well as you can. In considering an investment in some of the technologies described, it’s critical.
I’m all about Doug’s point about social media. My thoughts are that having a strong presence in social media outlets such as Facebook, LinkedIn or using sites like Twitter are the best low-cost ways for smaller retailers to market themselves. The big challenge is the time needed to manage these kinds of things. Smaller merchants don’t have the the time or resources to actively tweet ‘n post as much as the big guys can. Social media is the consummate time hog.
Great post. I think that Doug hit the key areas that a small or mid-sized retailer needs to stay competitive. These 6 areas do not require a great expenditure on the part of the business owner, nor do they require a lot of time to keep current. The key is to make them part of the day-to-day running of the business. By staying front of mind with consumers, small and mid-sized retailers can then use the “animated” part of their business to the best advantage.
I don’t know that you could call all of the suggestions “essential” when even major retailers have not fully utilized them and tied them all together.
For small to mid-sized retailers to take on the entire list would seem to be an all-consuming resource drain and distraction. In my conversations with small to mid-sized retailers, they talk about being overwhelmed with choices and needing advice regarding which platforms will have the most impact. As it is, many are receiving bad advice and dipping into social media and location-based marketing without having a decent website in place.
There is a real need for unbiased expertise in this area; companies that can provide scalable, phased roadmaps that will differentiate these businesses rather than just putting them in the big pool and letting the best (and biggest) guy win.
For most small retailers, I’d probably start with some form of frequent shopper program, which should yield a greater understanding of who shops your stores and their purchase patterns.
Those insights should help guide decisions regarding the other retail marketing technologies mentioned. Then layer on some category common sense: SMS reminders might be great for Blackberry-toting customers of a dry cleaner but pointless for the Buick-driving patrons of a hearing aid shop.
Not much to add except that we need to remember that this is a moving target. By the time the last retailer is on Twitter or Facebook the viral environment will have evolved and moved on. Ditto with mobile technologies. The point here, I guess, is that technology waits for no enterprise and consumers are increasingly technology driven.
We are in a unique period in history…where the consumer is pulling new technology from the retailer. What we think is essential today will be an ‘old story’ tomorrow.
So in my view, what’s most essential is technological nimbleness. Eighteen months is an eternity–what to speak of an acceptable time to implementation.
At minimum, be always on, always available, and in line with the brand identity. The pace of change is stunning…and it isn’t slowing down anytime soon.
Terrific post on one of the fastest evolving topics we have ever experienced. All retailers, whether independent or national, should be considering not only how to sensibly implement support for the emerging technology platforms but also ensure they have a plan in place to manage the additional workload engagement will create.
I agree with several others in this discussion that emphasis should be on improving the overall in-store experience and encouraging current customers to increase their market basket. Here are the first three things I would consider: implement a shopper loyalty program–and offer real value to frequent customers; introduce an in-store kiosk (our firm launched one last year that is combining endless aisles with frequent shopper activation and companion sale advice…and there are others that have features that may be right for a particular retail operation); and integrate the retailer’s website with in-store experiences thus extending and enhancing the shopping trip.
Just when you think you have the key to unlock this exciting new frontier, someone will undoubtedly change the lock.
Doug shared some thoughtful ideas that retailers should seriously consider and then discuss internally to better understand their approach and focus.
For years everyone was focused on automation and replacing people, streamlining supply chains, and cutting cost. For larger chains like Wal-Mart a focus on automation can create huge efficiencies and cost reductions, but hurt the overall customer experience since less time is spent on animation. For smaller and midsized retailers the opportunity around animation is far more important in helping them differentiate themselves from competitors that focus primarily on price. A focus on technologies that help small and midsized retailers enhance their animated experience can create a far greater yield than just focusing on automaton.
If you can’t beat Walmart on price then blow them away on animation (service, strong CRM solutions, useful mobile apps, a strategy for Facebook and other social networks, etc.)
The name of the article says it all, “The Customer is Wired…Are You?” Small and medium size retailers must look at their business not as brick and mortar locations, but as a universal entry to what they have to offer. They must look at the store as a service to their customer, not a requisite to buying their offerings. Once they decouple their “stores” from their foundations, Doug’s suggestions become a plan to successful retailing.
Being close to their customers is an even more critical issue of the small and medium size operations. It is their chance to get an advantage on their larger competitors, where the customers are necessarily nameless.
Social media provides a table for sincerity. Users know that the larger the organization the more canned their social media involvement is. There is a wide opening for those who have the insight to wire to their customers in every way possible.
I voted for enhanced checkout, and think there is a huge opening here for someone to create a standardized checkout (cash is fungible) that will work across stores, channels, etc. PayPal might be a logical player here.
I also think that addressing these questions to retailers misses the important mark of manufacturers or a consortium of manufacturers to do something along the same line. Retailers no longer own the retail space, unless the brands cede it to them.
My third comment is that all of the suggestions are dynamite! And right on target, given the fluidity of the world as this particular movement makes its way forward. I do note and agree with the comment on adapting for small screens. Small screens on cell phones and PDAs are having a retail impact in the developing world, where sometimes the only access to the internet–for some shoppers–is through these devices.
These points all make sense on a broad perspective, but for any specific independent retailer, the real question is who the customer is and what their needs are. Every independent retailer is different, and the vast range of products, services, customers and experiences defies any summarization.
The very best independent retailers have an acute awareness of their positioning within their markets, who their customers are, and how best to reach them. Technologically, they are not out in front of them, nor behind them, but right there with them.
Great summary! I agree with all of the previous commentators who stated that this article provides on-point suggestions.
I do think the list provided could be a bit intimidating for the average (or even excellent) small retailer. Having worked for one of the largest retailers, I know major corporations with entire departments dedicated to the implementation of new technology are having a problem creating strategies in all of the areas mentioned. That said, I feel it is important to have a clearly articulated strategy in place before jumping in to all of the shiny new options out there. For instance, if you know your target market is ‘younger’ and not likely to read emails, then by all means displace effort you were spending on that channel in favor of tweets that are likely to attract their attention.
It’s a exciting time to be in business though, and I look forward to the continuing advancement of all of these channels!
The list is a great list, but also a very over-whelming list! No way a small/medium retailer can do it ALL. But they should be spending some time and resource in some of these areas. They have to see what works and then spend the appropriate resources in the right area depending on their customers.
Doug:
Excellent advice for a small business. I think that your recommendations can be enhanced by first developing a strategy for building customer relationships. The “what” needs to come before the “how.” After you build a plan for how you will engage your customers, particularly your best customers, then you can permit those customers to select their preferred channel of communication.
For a small to medium business, the relationship building strategy is simple in concept, a bit more challenging in execution:
* Build an authentic relationship (using the voice of a real person), and provide customers with information that reflects their needs. For example, in women’s apparel, you can provide advice on design and fashion, including information on product you might not carry, such as watches, eyeglasses and shoes.
* Bring the customer “into the family” by introducing staff members and sharing information about the store, new arrivals, etc.
* Provide a forum for customers to share ideas, such as Facebook
* After you have earned the right to converse with your customers, then you can provide offers. Those offers should always reflect some knowledge of the customer and their purchases, supporting the positioning of “they know me.”
After ALL THIS planning, then you can begin to provide content and offers through customer preferred channels. You are right though, that not everyone is on social media–you need to ask which channels customers wish, and then provide your communications flow through them.
The plan is where you make or break it. A better plan through fewer channels always wins out.