Reinventing Retail

What do Apple, Warby Parker, and up and coming appliance retailer Pirch have in common? They have reinvented retail.

Everyone knows the Apple story – how Steve Jobs insisted that the Apple Stores provide an amazing experience for shoppers, creating a digital playground that ushers shoppers through an intuitive journey that is as much about building the brand as it is about making sales. This ethos has seen the tech company average US$5546 per square foot in its stores – significantly more than its closest competitor.

Similarly, newcomer Pirch is achieving US$2500 per square foot in its seven stores across the US in a few years since its opening. Also offering a unique retail approach, Pirch provides a 360-degree sensory experience complete with live cooktops and ovens, with chefs preparing meals on them, as well as working showers and even a spa.

In a time of online shopping and smaller inventories, these two high-end retailers have created an aura of exclusivity and a reputation for great customer service by providing unique, innovative retail experiences.

While you would be forgiven for assuming that Apple and Pirch can get away with changing the way things are done because of their expensive offerings, but low cost retailers can’t, the facts prove otherwise. Online eyewear store Warby Parker – started to provide cheaper glasses than those typically available in high-end stores – has expanded its business into unique brick and mortar stores that are yielding extremely high returns.

All three of these companies got it right. But have you noticed how many other retailers get it wrong?

I am not just talking about ‘JC Penney’s Epic Rebranding Fail’ (Forbes June 2012), where former CEO Ron Johnson tried to impose an Apple experience on a clientele that wanted savings far more than exclusivity and tailored customer service; I am talking about the little gaps in customer journeys that create big holes in revenue.

I recently entered a local homeware store that had a beautiful storefront and great merchandising, but when it came to a sales person helping me decide on a gift for a friend’s wedding, the experience fell flat. I’m a little embarrassed to admit I don’t know the difference between a juice mixer and a blender, but neither did the salesperson helping me because they were from the linen department, filling in for the person who had a day off.

Customer journeys must be created with the customer in mind. While that might sound obvious, far too many retailers don’t start their journeys by solving problems from the customer’s point of view. The reason for this is because all too often, retail companies don’t know who their customers are and what they want.

“I’m a little embarrassed to admit I don’t know the difference between a juice mixer and a blender, but neither did the salesperson helping me because they were from the linen department, filling in for the person who had a day off.”

The data to find this out is readily available from a number of sources: Surveys, social media, and contact centre feedback, among others. However far too many retailers are not using the tools and customer data they have available to them to build a comprehensive view of their customers.

Finding out what customers value most in their journeys is as easy as mining and analysing the data. The same applies to gaining an understanding of what their frustrations and unmet needs are. If these are identified and recognised, they can be used to provide real-time feedback to frontline staff in order to improve in-store experiences. Using this as an operational model will see gains in a very short space of time, as improvements and changes will occur immediately as issues are acknowledged. We see this in the data – Net Promoter scores (NPS) go up followed shortly by gains in revenue at stores where these NPS gains are experienced.

Added to this is the disconnect between the online and physical shopping experiences. A comprehensive view of the customer is impossible if retailers don’t have oversight of the customer across both channels. And yet, most companies design their online and brick and mortar customer journeys in isolation. An out of stock store item situation can be innovatively addressed by a salesperson ordering from the online store right then and there, capturing the customers contact details in the process!

In today’s digital age, marrying the two has never been more important. Retailers are still working on the assumption that most of their revenue comes from walk-in business, with patchwork solutions such as loyalty cards and store credit being used to create customer profiles being implemented to get around this. However, very few are using these to offer personalised experiences built on a comprehensive, single view of the customer from the data available over a multitude of channels.

From store visits, to point of sale, to online purchases and social media and other feedback, how the customer likes to shop is easily understood. However, this data is not being utilised by many retailers and the customer is not really being studied from this perspective.

The technology is there to remedy this situation. In fact, technology and supply chain are the new battlegrounds for retail, according to international retailer Target’s CIO Mike McNamara. “The retailers with the strongest technology and supply chain will have the best chance of winning,” he said when he announced the company’s new focus on technologies that enhance customers’ store experience as well as other digital efforts.

The retail industry is in the throes of transformation. Today’s savvy customers are demanding a seamless, personalised and convenient experience. Technology is at the heart of achieving this, and creating true engagement with our customers’ stories. We’d love to talk to you about how inQuba offers a single-view-of-feedback across all channels and uses relationship memory and context mapping to proactively engage customers across the retail journey. Email me at mike@inquba.com

 

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