Retail:Next Studies: Investing in the Shopper Experience

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Apr 08, 2010
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By George
Anderson

Price, product selection and technology can only take you so far in retailing
today because they can be matched by competitors. When it comes to creating
happy consumers, retailers need to deliver unique shopping experiences and
customer service that meets shoppers’ expectations. Living up to those expectations
is what ultimately determines how consumers perceive a retailer. Those are
the key takeaways from the third in the Retail:Next series of RetailWire surveys
conducted by Dechert-Hampe & Co. As opposed to gathering consumer perceptions, the series polls the retail industry experts and practitioners that make up the RetailWire.com audience.

Earlier this week, during a webinar to announce the results of the research, Ben
Ball, senior vice president, Dechert-Hampe, told attendees that responses to
the question of what determines customer satisfaction broke out into three
groups:

  1. Shopping experience and customer satisfaction.
  2. Product assortment.
  3. Price.

“Shopper experience and customer service clearly separated themselves from
the rest of the pack.” said Mr. Ball. “That makes a lot of sense
when you think about it. ‘Does the store meet my expectations?’ ‘Was I well
taken care of if I had a problem?’ Those are the first two things I want to
know as a consumer or shopper. Product assortment sort of fell in the middle
range here. ‘Could I find what I need?’  And interestingly enough, ‘Was I happy
with the price in terms of deals, promotions, etc.?'”

Here are the factors that most influence the shopping experience, according to
our survey respondents, using a five-point scale:

Ultimately, the study showed, the fundamentals of retailing
still matter.

Chris O’Malley, director of retail marketing for Intel Corporation’s
Embedded & Communications Group (sponsor of the study), observed, for example,
that “technology by itself is relatively useless.” Technology in
the retail environment only works, he said, if it helps stimulate various shopping
behaviors that lead to sales.

A case in point is the Apple Store, which respondents rated well above all
others as the retailer delivering the best shopping experience.

According to
Dechert-Hampe’s Ball, some might question how the research could show technology
being down on the list of ways to improve the shopping experience when Apple,
a store that totally revolves around the use and sale of technology, tops the
list of retailers that get it.

“People are underestimating Apple’s mastery of the fundamentals,” he
said. “If it were just the technology, Circuit City and CompUSA would
have been on this list instead of in Chapter 11. I think the ability to experience
the products that Apple provides; the knowledgeable brand advocates that are
there in the store; the encouragement to have you be completely immersed in
the technology and the applications; the product themselves; and right down
to the customer service provided by the Genius Bar are all outstanding examples
of Apple understanding and really maximizing the fundamentals of the shopper
experience. Now they are also using technology because that’s their product
to do it in a very differentiated way.”

Discussion Questions: What do you think are the top factors influencing
the customer experience in stores today? What means to improving the customer
experience do you think are most commonly overlooked?

Please practice The RetailWire Golden Rule when submitting your comments.

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14 Comments on "Retail:Next Studies: Investing in the Shopper Experience"


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John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
11 years 1 month ago

Great work Ben! I am glad Dechert-Hampe took time to actually study the importance overall customer experience has on retail today and their ultimate success.

Walk into a Hy-Vee store and stand in one location and I promise you someone from the store will walk up and ask if they can help you. Not only that, but they will walk you to the item you are looking for. Same goes for Trader Joe’s, a gold standard in the area of customer experience.

Technology that helps retailers, manufacturers, and ultimately consumers are great. I know because I sold technology solutions to retailers and manufacturers for over 13 years. That said they are useless without support from people that interface with consumers and constantly look for ways to enhance the shopping experience.

Apple has an amazing checkout system where each Apple advocate holds a handheld register. It would be useless if the Apple advocate could not help the consumer find the right solution for their needs.

Joan Treistman
Guest
11 years 1 month ago

The example of Apple brings to mind the need to understand who you are and what you can mean to your customers. Apple has nailed it.

The products sold at the Apple store are high ticket, high risk products. Providing an atmosphere where shoppers feel they are being cared for, nurtured and directed to products that will deliver what they expect with the least amount of risk is walking in lockstep with the customer.

Other retailers have various scenarios, some related to high risk purchases, some related to length of time in the store (“weekly shopping”). It’s imperative for these retailers to understand who they are and what they mean to their customers. Once this understanding is achieved, they can plan an atmosphere and service philosophy that aligns itself with customer needs–known or unknown–that will guarantee the store return visits.

Bill Emerson
Guest
Bill Emerson
11 years 1 month ago
In a buyers market environment, where everything is available virtually everywhere, the key attribute of success is remembering and acting on a simple fact–you’re dealing with human beings who know a lot less about the store (or site) than the retailer. As pathetically obvious as that sounds, there are very few retailers that consistently deliver on that simple fact for an equally simple reason–it is very difficult to accomplish. Retailers, also human, tend to arrange and organize themselves around what is simplest and most sensible for them–buyers organized around vendors leading to sales floors organized around buying responsibilities. Merchandise bought and displayed under the assumptions that the consumer is as knowledgeable about the products as the retailers. Signage, directional and informational, that is created with an implicit assumption that the consumer knows as much about the store as they do. As cited, Apple is a great example of how to effectively use technology. They understand that, while most (but not all) of their customers are tech-savvy, they don’t inherently know the technology as well as… Read more »
Ian Percy
Guest
11 years 1 month ago
The “fundamentals,” or what I call the “mechanistic focus,” are the admission fee if you want to play in the retail game (or any other game for that matter). They will not make you a consumer magnet. Good examples of this point were noted. Let me move to a medical metaphor. Western medicine is largely mechanistic. Cut that organ out, take that drug, etc. But we’re slowly admitting to the reality of an innate intuitive intelligence (aka spirit, energy) that can in itself tell your body how to heal or better, how not to get out of alignment in the first place. It’s like discovering a whole new power you didn’t even know you had. All you have to do is throw the switch! Becoming a destination store, a consumer magnet, an engaging enterprise results from the alignment of every form of energy in the circumstance. That whole list of factors? It’s all one thing! It would be a mistake to think you can pick a few high scoring variables, fix them, and be done.… Read more »
Doug Fleener
Guest
11 years 1 month ago

Maybe I’m missing something here, but wondering why “People” aren’t part of the influences. Anybody can build a Genius Bar, but it is the people that engage the customer that ultimately determines the quality of that experience.

For most retail, and certainly specialty retail, the staff attitudes and actions have a huge impact on the customer experience. People remember how someone made them feel a lot longer than what they saw. I love the Apple store and Apple products, but those stores would not be the same without the extremely knowledgeable zealots that work there.

Doron Levy
Guest
Doron Levy
11 years 1 month ago

Excellent analysis Ben. Looks like most factors hold similar weight so I say set the tone for the experience early on. A while back I wrote about what the customers sees in the first 250 or so feet. That is probably the biggest controllable factor in setting up for a great customer experience.

Great info Ben! Merchants should take this to the bank and really apply what we have learned here.

Dave Wendland
Guest
11 years 1 month ago

Mr. Ball said it best when he suggested “Shopper experience and customer service clearly separate [retailers] from the rest of the pack.”

This is a topic that will remain on the strategic action plans for many organizations … the trick, however, is doing something about it! As previously highlighted, Hy-Vee has focused on service; so has Wegmans. But I honestly don’t believe they are done yet (nor is anyone who wants to be a standout!). Technology has a place at retail to enhance the shopper experience–without replacing the one-to-one interaction. Our firm is testing this idea in several formats at the present time.

Shopper experience, or as I prefer to call it “buyer experience,” starts before the consumer enters the store and should honestly never end. Retailers that recognize and embrace the overall experience will be the true winners!

Mark Burr
Guest
11 years 1 month ago

I’m with Doug Fleener on this one. All the technology, image, decor, layout, etc, won’t matter a bit if you don’t have the right people to complement it and after all, they are the most important ‘customer-facing’ thing you have.

Lee Peterson
Guest
11 years 1 month ago

What’s important to make clear about the study is that the respondents were not consumers, they were retail and manufacturing execs. Which is the reason price was so far down the list. I have not seen a consumer-driven study of this nature that did NOT have price as either a #1 or #2 in quite a few years.

In that regard, the fact that execs answered in such a fashion also helps to explain why ‘tech’ is so low on the list: most retail execs don’t know how it’s going to blend in with the experience going forward. They’re trying to figure it out! Consumers are just waiting for retailers to catch up with where they are.

It’s going to be a great decade going forward as tech finally does integrate with the retail experience in a meaningful way (like Apple’s check out or Chipotle’s app)–and I don’t mean kiosks and LCD screens.

George Whalin
Guest
George Whalin
11 years 1 month ago

I always find such studies as this interesting and informative but none of these “factors” matter if the customer is ignored or treated poorly. I was recently in a large Best Buy store in California. I spent approximately 40 minutes in the store and was completely ignored by the staff. This is one of the Best Buy stores with a musical instrument department and a new high-end Magnolia audio-video department. The store has all of the technology one could want. Like most Best Buy stores they didn’t even have a greeter at the door that morning. So what do all of these things accomplish if the people working in the store aren’t attentive, well-trained and focused on helping every customer?

Michael Tesler
Guest
Michael Tesler
11 years 1 month ago

Nothing wrong with meeting customer expectations, but the truly great retailers are the ones that are continually finding ways to exceed customer expectations.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
11 years 1 month ago

My crew believed that you had to screw up to get a customer for life. Let me explain. To us, customer confrontations were known as “moments of truth,” and management of those moments was a primary key to creating shopper loyalty. We taught our associates to take responsibility for the customer’s discontent, ask for forgiveness, and do whatever it took to satisfy their need. Messing up, admitting it, asking for forgiveness, and providing an acceptable solution communicates culpability and honesty. By our very nature, we love to forgive. This was our “Triple A Response” – Acknowledgment, Apology, and Acceptable Solution.

At the risk of repeating an analogy shared here previously, consider this: Aristotle Onassis once was asked why Jackie Kennedy-Onassis was never embraced as warmly as previous first ladies by the American public. “She needed to commit a small indiscretion and then apologize,” he said, “so Americans could forgive her and hold her closer to their hearts.”

Management of moments of truth is the top factor influencing customer experiences in stores.

Jerry Gelsomino
Guest
11 years 1 month ago

I agree with the list and the priorities listed. However, I am surprised by one missing ingredient that didn’t show up on the radar: Employees! Whether they are knowledgeable, courteous, helpful, or just can point you to where the bathrooms are, these people are invaluable. It may be unusual to hear a store design-type talking this way, but good sales associates and customer-centric back of house do most of the heavy lifting in demonstrating the store’s brand.

Why doesn’t this show up on the list?

Gary Edwards, PhD
Guest
Gary Edwards, PhD
11 years 20 days ago
The Q1 2010 Empathica Consumer Insights Panel identified that the customer experience is largely dependent on customer service. Retailers face challenging prospects in that the majority of consumers (55%) believe that customer service is getting worse today, and at the same time they have less tolerance for poor service. Furthermore, when individuals have a bad experience, one in four U.S. consumers state they will tell others not to go to this particular brand. In a time when consumers are heavily influenced in their shopping decisions on price (with coupons being a big motivator), retailers must have a thorough understanding of what their target audience desires. Only in knowing the needs of its core customer base, and the unique way in which they have come to expect to be serviced can a retailer strive to deliver an optimal customer experience. And of course, knowing is not enough. Successful retailers put operational rigor and constant customer feedback measurement in place to sure that the optimal experience isn’t just a “wow” exceptional moment, it’s the everyday expectation of… Read more »
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