Guest Post: The Winning Formula For Retail Stores In 5 Simple Letters

To master CX, the whole is greater than the sum of the parts

In our latest guest post, our colleague Chris Petersen explores commonalities of world-class customer centric organizations and what it takes to be considered among them.

The world of retail is not out of the woods in terms of recovering from worldwide economic declines. There are of course exceptions. Notably, ecommerce continues to grow at a double digit pace. Yet, 80+% of retail sales are still store based. What is interesting to watch is which retail chains are winning, and why. Radio Shack just went bankrupt. Target exited Canada, and Best Buy is closing Future Shop stores there. Yet, retailers like Apple continue to profitably grow and expand worldwide. The reality for retail store chains is that the old rules of retail are being rewritten by today’s consumers. Future survival and success will depend not upon a sale today, but a winning formula for CX (Customer Experience) that creates relationships.

Why this is important: “Build it and they will come” is no longer a successful formula for stores. Future success and store survival requires a CX formula that transcends products, displays, store designs and even the people in the store.

The essence of CX in retail stores: Stage, Actors and Script

There is an ever growing importance of CX in retail stores today. In the face of ecommerce, stores can no longer compete on lowest price or largest selection. Stores must differentiate by providing something consumers can’t get online … especially CX (Customer Experience). What exactly is CX … and how do the best retail stores create it?

In a past post, we discussed the metaphor of “theater” for retail stores. Like a theater experience, great stores create a consumer experience in 3 main ways:

Stage – The store is a stage, including how it is arranged and optimized for the consumer to engage with products. Retailers are moving from shelving to display products to more of an interactive store design where consumers can interact and play with products like home automation, wearable technology, and Internet of Things.

Actors – The actors of retail are of course the RSPs or staff on the floor. Today’s omnichannel shoppers research facts online, so they come to stores in order to engage with staff on how to find the best solutions that will work for them.

Script – A theater production with the best stage and best actors is not a compelling experience without a great story … a script that engages the audience. The compelling question for retail stores today is, what is the compelling script that engages consumers to explore, purchase, and return to the store.

The whole is greater than the sum of the parts, but you need the parts!

To describe the “magic of Disney” literally would take pages if not volumes! Even Disney requires weeks to train their “hosts” on how to create and sustain the magic that keeps their guests coming back, even though tickets are now more than $100 per day per person.

Who has a better stage than Disney parks! They are literally built upon decades of experience in animation and now digital ways to engage visitors within the experience. Actors at Disney not only have elaborate costumes, they are groomed and trained in all of the details on how to stay in character.

But, the real secret sauce of Disney is how they glue it all together with the underlying premise that you are not a customer, you are their GUEST. The whole Disney experience is designed to make you feel like a special guest throughout your stay. And, there are many “scripts” for that. Not only scripts for the main character actors, but scripts for how servers and even trash collectors should meet and greet guests!

Just 5 Simple Letters – The hardest mission of any retail store

The concepts of CX and scripts to engage consumers are not new. Apple has become famous for their 2+ week process in how they train their associates to greet and engage. Likewise, Best Buy, Pottery Barn, Build-a-Bear all have processes designed to proactively engage consumers.

After studying many retail pilots around the world, the secret sauce of CX can be summarized in just 5 letters which stand for the 5 critical behaviors to engage today’s consumers in stores:

G – Greet

Asking “can I help you” doesn’t cut it! To engage consumers these days requires a sincere greeting … with eye contact! The best welcome their GUESTs to the store and introduce themselves by name. They also invite/engage them in exploring.

U – Understand

This is probably the single most difficult and overlooked step! It is not about showing and telling consumers so that they will understand … it is about the RSPs asking open questions and listening so that they understand what their GUESTs are looking for, and how to personalize their services which meet their needs.

E – Excite / Engage

Retailers are beginning to understand that stores are not just a warehouse. They need to be designed and equipped to engage consumers. However, the key is to let the GUESTs “touch and do” … let them drive the experience, not RSPs.

S – Solve Consumer Needs

The most important “P” consumers are looking for in store is “Personalization”. They are not looking to be “sold”. They are looking for associates that will treat them like GUESTs, and “help them to buy” solutions that will work best for them.

T – Thank … and give them reason(s) to return

How do you treat GUESTs in your home? You personally thank them for coming, and welcome them back. Sincerity and thoughtfulness are the foundation of relationships.

Sounds so basic and simple … Why are so many retail stores failing?

For those of you that read Results Count on a regular basis, this will sound like a broken record, but it bears repeating loud, and often. Retail stores that are struggling are stuck in the ruts … they are carrying the baggage of a product centric past of selling products to customers. What unsuccessful stores are missing is the fact that today’s omnichannel consumers have changed their behaviors, and their expectations. Consumers are the new POS (Point of Sale), not the stores or the shelf. Executing GUEST is hard work that pays off!

Look at the retail leaders in any category (e.g. Apple, Nordstrom’s, John Lewis), and they have fully embraced a consumer centric future with Stage, Actors and Scripts focused on GUESTs.

The most missed ingredient in the secret sauce is the “script” to engage and personalize CX for GUESTs on their terms, not the store’s.

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Written by: Chris Petersen Ph.D

Over thirty years ago, Dr. Petersen anticipated the need for a new kind of consultant, one who could help manufacturers/vendors improve their performance and attain a new level of partnership. Through the strategic use of business intelligence, best practices, measurement and joint scorecards, IMS has evolved into the role of facilitating performance improvement and partnership of both vendors and retailers. Dr. Petersen has helped lead IMS and build a legacy of working with Fortune 500 companies, such as Adobe, AT&T, Compaq, Dell, Hewlett Packard, IBM, Kodak, Microsoft, SanDisk, Sony, and Whirlpool to achieve measurable results. He has also has developed processes and tools that have shaped how retailers behaviorally change the customer experience. Chris has worked with retailers like Best Buy, Circuit City, Darty, Nebraska Furniture Mart, Staples, and Sony Style Stores to redefine experiential retailing and measure results from pilots.

Additionally, Dr. Petersen is also the founder of IMS’ Retail University , a series of strategic workshops focused on teaching the critical elements of competing profitably in the increasingly complex retail marketplace. Through Retail University, Chris shares real case studies of how IMS processes and measurement have been applied to improve results for both manufacturers and retailers.