2013 was once again a record year for UK Online Retail. Sales were 16.5% higher than the previous year and the highest increase for four years. Total UK retail sales rose by just 0.4%*. This trend, though, is just the beginning.
As logistics become faster and more flexible, as access to product and payment methods become more pervasive and as online product interaction becomes more intuitive, meaningful and mobile, customers will not need to shop in stores. They will only choose to, when stores provide something more engaging or useful than online. Therefore it follows that the role of retail in the near future will be primarily one of delivering experiences to customers.
Being a remarkable retailer will be necessary and will require some serious soul searching to understand how customers want to buy products and services and how an experience is delivered in store that is both engaging and meaningful to your customer.
For some retailers, purchases may be made entirely on line with product delivered directly to the customer, the store may, instead, be about providing trial and service and to build a relationship of trust between the customer & retailer or product’s brand. In some cases retail will become an automated experience, satisfying extreme convenience like the Sprinkles CupCake ATM.
Whatever the business model, it is likely that there will be significantly fewer stores on the high street as those that don’t provide “wow” disappear. Getting to the heart of what customers find useful, valuable and engaging will be necessary but as now, requires careful planning & execution.
Basic ingredients of remarkableness
To truly elicit customer engagement in store, three core things still need to act in harmony, throughout the entire customer journey:
- Offer (retailer’s products and services)
- Need (customer’s needs and shopping missions)
- Experience (brand environment and personality)
Though a simple concept, it’s complex to apply and there are many reasons this isn’t always delivered at retail. For one, retailers often have different business functions each with their own objectives and these don’t always start with customer needs or look at their whole journey.
In my agency role, I’ve found this design approach a great leveler and a way of merging customer and business objectives, resulting in a more relevant customer experience and in most cases leading to an increase in retail engagement, sales and margin.
Here are a couple of examples from working in the telecoms sector that highlight how powerful the results can be when you get this right.
I’ve always loved the Telecoms sector. It’s complex, fast moving and has multiple stakeholders. These days they’ll include handset manufacturer, network provider, retailer and “the new kid on the block” operating system. Then you have further content providers, service providers and even fashion brands.
Several years ago there was a store redesign project with a European network provider. They had a dominant market position and at the time, as most of their revenue was from selling content services on their network, their activity in store was focused on communicating this to customers. On the face of it this was a logical retail strategy.
When we talked to their customers though, we learned they were most interested in the latest cool handset technology. This insight inspired a very different customer experience and a store design that focused on trialing new handsets. What was truly amazing was that this simple re-articulation of their offer produced a massive jump in engagement and a fourfold sales increase.
Here to help
More recently I worked on a retail re-design project for a global mobile network provider. Our insight was that their customer’s biggest need was to have someone simplify the complexity of the ever changing technology. This manifested a store experience that was distinctly human. Warm and domestic cues replaced the traditionally aggressive high tech experience. To customers the outward retail role reassuringly became that of friendly service and support. Again this resulted in positive NPS score for the client.
Two very different insights leading to two very different retail experiences for customers.
As change inevitably continues on the high street, it’s going to be important to challenge current retail norms and view them through the lens of what customers are looking for and what new services are emerging. Future inspiration may come from innovation outside the immediate business sector.
It’s also worth remembering sectors that have already faced dramatic change such as the cinema industry which reinvented itself from flea pit to the richer entertainment experience of the multiplex when threatened by the rise of the video, DVD and streaming mobile content. High street banks closed or became coffee shops when on-line banking automated many services. Then as need emerged they become comfortable meeting places for bank staff and their customers and a way for banks to be more human.
Retail is still detail but being remarkable will be the new norm.