A quick survey of the retail landscape can make you queasy, or even depressed. Unless you’re scoping for opportunities.
Not an easy thing to do if you’re hunkered down and focused on quarterly numbers. But this is how many brick-and-mortar retailers operate.
By “operate,” I mean “live to see another day.”
Consider what it takes to compete in today’s marketplace. Online shopping, omnichannel offerings and technologies, and experiential retail have laid waste to the old “stack ‘em high and let ‘em fly” business model. To differentiate the brand and grow profits over time—not by slashing costs, but by building a loyal customer base—requires not just a dedicated investment, but buy in throughout the organization.
All of this has proven too overwhelming for some of the biggest names in retail. It’s easy to blame Amazon. But the truth is, these brands were too complacent. They failed to adapt.
“It’s going to be a year of transition and a year of reckoning and a year of awakening for retailers.”
-Marshal Cohen, chief industry analyst, NPD Group
If your goal is short-term profitability at all costs, the first step to breaking out of this cycle (and breaking away from your competitors) is to recognize what’s happening in the industry and what it means for your business.
Here are four realities you can’t ignore, and the most effective ways to respond.
Foot Traffic Is Down
It’s estimated that between 2009 and 2013, retail foot traffic in the U.S. declined by half. Since then, it has continued to dwindle year over year. As a result, many retailers have reduced staffing in their stores.
With fewer employees in the store and fewer customers walking through the door, brands are tempted to bombard customers with all kinds of information (discounts, promotional offers, new products, etc.). The priority is to promote the brand, rather than try to help.
Your New Strategy
Stop attempting the hard sell, and start focusing on building loyalty. Direct your associates to break the ice and make an emotional connection via active listening. They should ask customers what brought them into the store, probe the “why” behind the need, and apply inventory and product knowledge to deliver a “service + 1” experience.
As part of your training program, clearly outline your expectations and their significance to the brand. Instead of giving employees a list of things to recite, explain how the encounter should flow. Provide helpful examples and plenty of role-playing opportunities.
Not All Customers Visit Stores to Buy
While malls are losing their anchor stores and shuttering in growing numbers, a parallel trend is taking place. Online retailers are opening physical stores—not necessarily to sell, but to allow customers to experience the brand and find out what’s new and what’s on the horizon. (In some cases, like Google’s pop-up store and Samsung’s concept store here in NYC, customers who want to buy must go online or through third-party retailers.)
Even traditional brick-and-mortar retailers are seeing growing numbers of showroomers who want to sample the merchandise before buying online. This is perfectly fine, and can work to your brand’s advantage, unless your in-store and ecommerce channels are still worlds apart.
Your New Strategy
It’s time to fully embrace an omnichannel approach to sales. If you’re incentivizing in-store sales only, you’re leaving a lot of revenue on the table. Tear down the silos and give credit to in-store associates for all sales, including those that go offline.
It’s also worth investing in technology that offers brick-and-mortar shoppers an “endless aisle.” Your goal should be to ensure no customer reaches a dead end in store. If additional sizes and styles are available through other brand channels, associates should be able to direct customers there or place orders on the spot.
Millennial Associates Have Unique Demands
Millennials are now the largest generation in the U.S. workforce. They also expect much from their employers. In the role of retail associate, they need to be inspired, feel empowered, and know they’re contributing meaningfully. If millennials aren’t “feeling it” in the workplace, they won’t stick around long.
On the sales floor, your millennial associates want to make human connections. They want to help and satisfy, not regurgitate scripts. They need to own the customer experience—make it theirs, make it authentic, and make it personal.
Your New Strategy
Your training program is your millennial associates’ introduction to the brand’s culture and values, so make it count. Go beyond product and policy details to emphasize the company’s unique mission and the importance of the associate’s role. Look to make training fun (gamify it, even). And give your millennial associates the authority and flexibility to satisfy customers no matter what it takes.
Customer Experience Trumps Everything
Steep discounting may bring a temporary surge in foot traffic, and cost cutting may boost quarterly profits. But the only path to sustained growth is a consistently excellent customer experience that humanizes the brand and turns new customers into diehard fans.
I don’t use the word “consistently” lightly. Every associate must be on the same page, ready and able to provide excellent service at every touchpoint. No matter how zigzag the buying journey, customers don’t see channels or departments—just the brand as a whole. This is how your company should think and operate.
Your New Strategy
To align your teams, achieve brand consistency, and improve your associates’ performance over time, you can’t simply issue corporate directives from the top. You need to collect both objective data (mystery shopping) and subjective data (voice of the customer) on an ongoing basis.
These data collection programs will show you exactly what’s happening in your stores and how customers view your brand’s performance. Fine data points will reveal subtle (but critical) weaknesses, and larger trends will emerge over time. By layering the results, you’ll be able to streamline operations, invest more wisely in the customer experience, and maximize your ROI.
For more information about measuring and managing front-line performance—and how to start a program of your own—download our new eBook, “How to Supercharge Your Customer Service by Combining Objective and Subjective Data.” In it, you’ll discover how to apply customer data across all levels of your organization and achieve a virtuous cycle of improvement and growth.