What new retail benchmarks say about the way we shop now
NRF’s Jessica Hibbard looks at how retailers are adapting to evolving consumer behavior and rethinking shopping experiences to stay one step ahead.
I’ve been a Warby Parker fan since covering co-CEO David Gilboa’s session at Retail’s BIG Show in 2014, and I ordered my first pair of glasses soon after. When my prescription changed recently, I had a reason to visit the retailer several times: trying on frames at the store in New York’s Grand Central Terminal while waiting for a friend’s train, ordering new glasses at home on my laptop, tracking the delivery on my phone and stopping at a D.C. location to troubleshoot a problem with the fit and lenses.
This type of “multichannel” journey — bouncing from store to website to app and back to a store again — is the way most of us are shopping now.
Consumers have been quick to make new technology a part of their lives and expect retailers to do the same. Warby Parker was a digital company first and opened stores only after a few years of rapid online growth, which may give the brand an advantage when it comes to creating seamless experiences across multiple channels. When I walked into the location near my office, there was no need to wait in line with paper receipt in hand; I was immediately greeted by a smiling store associate who entered my email address on an iPad and had my prescription and purchase history at her fingertips.
The latest Omnichannel Retail Index shows progress — and room for growth — among U.S. retailers.nrf.com
The NRF-FitForCommerce Omnichannel Retail Index tracks retailer implementation of 200 digital and multichannel features — those deceivingly small considerations that make an outsized difference on the shopping experience — and found a double-digit increase in adoption rates on several types of initiatives. From the first study conducted in August 2015 to the most recent analysis in October 2016, online and multichannel retailers have been adding features that make it easier for shoppers to discover products, get what they want and collect rewards for coming back again.
Searching is easy when you know exactly what you’re looking for. But discovering new products — in stores or online — can be challenging when you’re still trying to decide what you need. Since the early days of commerce, merchants have been trying to increase sales and help customers by presenting products in enticing ways.
Right now, retailers are solving the discovery problem by adapting traditional merchandising and customer service tactics for digital screens. Seasonal in-store displays are translated into online product guides, and live chat on e-commerce sites duplicates the personalized assistance of store associates.
What will take discovery to the next level? “Anticipatory retail” — using natural language processing and machine learning to enhance and disrupt search — is closer to becoming an everyday reality, thanks to consumer adoption of voice-enabled technology like Amazon Echo and Google Home. Netshoes, an online sporting goods retailer in Brazil, has offered image recognition in its mobile app for years, using visual search to take shoppers from picture to purchase in just a few taps.
And it’s important to not overlook the joy of discovery in “real life,” which is why digital retailers continue to branch out with physical locations and e-commerce heavyweights like Walmart-owned Jet.com find value in partnering with retailers like STORY, the New York store with a unique business model and a knack for showcasing products in engaging, unexpected ways.
There’s nothing worse than finding what you want and running into roadblocks when you want to buy it. The good news is that minor improvements to website usability and store associate training can make shopping experiences surprisingly delightful. The bad news is that these improvements are easier said than done; for established retailers with legacy systems, minor changes can be a major effort.
As a photography nerd, my B&H account sees a lot of action. One of the reasons I like buying film from the iconic New York retailer is the speedy online checkout experience. I can store multiple payment methods and addresses in my account — so if I want to ship film to my destination instead of putting it through an airport scanner, it’s fast and easy. B&H is among the overwhelming majority — more than nine in 10 retailers offer this feature now.
Physical locations have also become an important part of the online shopping equation; most retailers are staffing stores with associates who know how to process returns for online orders and will offer to find items online when they’re not available in the store. While talking about the Omnichannel Retail Index data around the office, a colleague told me how a store associate at LOFT saved a sale by finding sold-out sizes online.
Allowing customers to seamlessly transition from desktop browser to smartphone app to in-store purchasing is now a baseline expectation. Retailers are testing chatbots with mixed results, but will soon find the right mix of automation and human touch. For purchases that require greater commitment — think furniture and cars — augmented reality can play a role in helping shoppers feel confident about buying. Wayfair and Fiat are using Google’s Tango platform to show how products would look in a physical space. Lowe’s uses Tango to help customers measure and test furniture in their homes, and takes things a step further with Holoroom, an in-store virtual reality experience that lets homeowners visualize remodeling projects in three dimensions.
What’s in it for me? Whether it’s making a trip to the store or sharing personal information like an email address, this is the question we all ask ourselves when shopping. Sophisticated consumers are putting more pressure on retailers to provide incentives to visit, buy and engage.
Starbucks and Sephora are often touted as the gold standard in cross-channel loyalty, with apps that inspire customers to keep coming back. Companies like LevelUp make it possible for smaller businesses like local restaurants to give customers the loyalty app experience they’ve come to expect from larger companies, raising the bar for retailers across the board.
Guest Wi-Fi helps customers access all the features of those apps in stores; Shell Retail’s Carolyn Yapp says that even certain segments of convenience store customers — where shoppers are typically in and out in a matter of minutes — have come to expect free Wi-Fi. You can blame these high expectations on Apple, which started offering high-speed broadband in its stores when 97 percent of Americans were still using dial-up Internet at home and smartphones were no more than a sci-fi fantasy.
Getting customers to visit a store is one thing; convincing them to share personal information like an email address requires a different kind of incentive. Nearly half of indexed retailers now offer something to those who opt-in to receive emails. Not surprisingly, community-centric and content-focused companies like Food52 are particularly adept at giving shoppers a reason to invite a brand into their inboxes.
At Retail’s BIG Show 2017, Food52 CEO and co-founder Amanda Hesser explained that storytelling is an opportunity to show the company’s point of view and why it matters, adding value to online shopping experiences. Hesser sees content as a way to build relationships, not necessarily a conversion tool. But make no mistake, it’s a sophisticated strategy for boosting sales: Hesser said the way Food52 uses content has increased conversion by 20 percent over the past year.
Connecting content, community and commerce can be key to engaging with online shoppers and differentiating digital brands in a crowded marketplace. The same strategies that make online content work for retailers can also make in-store experiences more enticing. From URBN’s “lifestyle centers” to Nordstrom’s Pop-In Shop to MM.LaFleur’s “Out of Office” personal shopping experience, retailers are making big investments in ephemeral events, exclusivity and personalization. It’s all designed to position physical stores as a distinctive experience that will make a shopper’s Instagram followers jealous.
The NRF-FitForCommerce Omnichannel Retail Index is a benchmarking study that examines how 120 retailers across multiple categories perform in aggregate on approximately 200 criteria across web, mobile and in-store. The third Index is now completed and customized benchmark studies are available from FitForCommerce.