Segmenting Retail: Why Research Shows This is Essential

It’s easy to fall into the trap of “one size fits all”, but both quantitative and qualitative research conducted by Myplanet shows why that isn’t the best approach to finding retail tech solutions.

Aug 20, 2019 · 8 min read

To date, retail technology advances have mostly related to e-commerce functions: more diverse online shopping options, more efficient product delivery services, more targeted personalized marketing tools, and so on. The focus has been on improving the end-customer experience with little effort put into how improvements to the employee experience could impact those end consumers — and the bottom line.

In research we conducted, retail employees across a number of sectors — from sporting goods to specialty foods to clothing and electronics — spoke about the need for improvements to the way their companies do business. And when you consider the number of digital touchpoints they now have, it’s no surprise. Kiosks, PoS systems, warehouse inventory and tracking set-ups, customer profiles, clienteling devices… there’s no shortage of digital interfaces employees must interact with.

“Everything we do in store is very much through a digital interface.” — Retail Employee, Groceries & Perishable Goods

The retail arena is especially well-positioned to see transformational change at the employee level, in part because those early digital shifts (online shopping and new fulfillment and delivery experiences, in particular) are already being felt by retail workers. There’s palpable interest in how technology can and will transform their industry. Understanding employee experiences and where they see the most potential for benefit is the first step in building better experiences for retailers on the whole.

Sector by Sector

Up to this point we’ve been referring to retail as a monolithic, singular thing. But while there are experiences that resonate solidly throughout the industry, retail is really no more homogenous than the customers it caters to. The differences among the sectors within the industry can be much more informative than trying to discern what few things impact the entire industry.

For example, on the whole, survey respondents said improvements to either the customer purchasing process or to the inventory and warehouse tracking systems would bring the greatest benefits. Nearly 50% of respondents identified one of those two areas as most in need of digital intervention. But when we segment the results out by sector, we see some stark differences.

“If we could automate processes that are simple things — order tracking, confirming with customers, that kind of thing — it would make a big difference.” — Retail Employee, Electronics

Those working in home decor and lifestyle-oriented goods, for example, didn’t select the top two categories at all. Instead, that group very specifically indicated a need for improvements to returns & exchanges and to product information & benefits with almost 90% of respondents working in this sector choosing one of those two areas for improvement.

Their needs differ from general retail needs because their circumstances are different: You can’t try a lamp on in store, you need to take it home to see if it works in the space. For sales associates, this translates into two things: They want to be able to give customers as much information as they can up front to increase the likelihood of a “right fit” and they need to be able to process returns faster and more easily to ensure a positive customer experience even when the item doesn’t fit the customer’s needs.

By contrast, automotive employees indicated no need for feature & benefit improvements or better return and exchange processes. This is no surprise: we all know there are reams and reams of information available about cars, their features, and the accessories that go with them and the likelihood of returns on such a major purchase are small. So for folks working in car sales, the purchasing process raises bigger concerns (40% said this area needed a digital upgrade) as does ensuring a customer’s order can be delivered in a timely manner (another 40% of respondents highlighted this area for improvement). Anyone who has tried to buy a car knows first-hand how confusing pricing rubrics and lease plans can be, and how long you can wait for customized features, so these too come as no surprise.

It’s easy to understand how opaque pricing and unclear timelines for delivery are the biggest pain points in car sales, but those simply aren’t the primary issues faced in clothing or perishable goods or sports gear. So while larger, industry-wide trends can tell us things in broad strokes, it’s only when we dig down into the data that we’re able to see, sector-to-sector, what will really have an impact. And that’s a key factor in determining not only what can be built in retail settings, but what should be built.

The Age Factor

There’s another important factor when it comes to determining where retailers should invest their innovation dollars: Age.

During a recent project, we were researching the automotive buying experience. In particular, we were focused on the millennial vehicle buying experience and sure enough, some striking distinctions emerged.

An Autotrader report found that millennial vehicle buyers do 61 percent of their research and shopping online, stating “Millennials feel the Internet is four times more helpful during the shopping process than TV or newspapers.” In fact, a mere 2 percent of millennials did not report using search engines as part of their research process. Clearly (and we’d say unsurprisingly) millennials are researching online before making purchases.

But it’s not just millennial buyers whose behaviour differs from previous generations. Millennial employees also have different ideas about the ways technology can and should interact with their roles.

“We don’t have mobile pay, but we definitely have customers request it — we’ve got a young customer base, so they tend to be geared towards newer tech.” Retail Employee, Gifts and Luxury Goods

A staggering 69% of Millennial employees indicated their more tactical in-store interactions — customer purchasing, warehouse & inventory tracking, returns & exchanges — were in need of digital intervention and improvement. That’s a stark contrast to their Gen X and Boomer counterparts, 44% of whom had a stronger desire to get more feature & benefit information and improve product recommendation insights.

This is a distinct difference in how the two groups approach their jobs and the people they’re speaking with. Millennial employees, used to conducting independent research online and coming into a purchasing situation armed with all the info they need, are aiming for fast, efficient interactions. When serving their customers, their primary aim is to expedite the process for them, to help them complete the task of buying over other considerations.

“Anecdotally, older customers are more wary of giving up personal information. Younger people tend to be more comfortable with giving out their information.” — Retail Employee, Groceries & Perishable Goods

“When we look at the numbers, what stands out is that Millennials are 56% more likely to think their employer is outdated, reflecting a new standard for workplace tools,” says Myplanet CEO Jason Cottrell. Millennials are no longer just the workforce of the future — they’re the workforce of now and their needs and work styles should be driving changes to how retailers adapt to the changing technological landscape.

Gen X and Boomer retail workers operate differently. As consumers, they have a lifetime of relying on retail employees as the experts, informing their opinions and guiding their decisions, so as employees, they view themselves as experts accordingly. They want their customers to know they can turn to them for meaningful insights and valuable recommendations, which means their priority is to have a more reliable way to stay on top of the latest information.

“There are so many fads that come in and out — I just say what I know and share my background and training. They know us and trust our experience.” Retail Employee, Athletic Apparel and Outdoor Gear

When building out new tools for retail environments, it’s important to consider not just where the needs of the sector are, but also where the needs of the employees are. If your audience — both employees and customers — are largely millennial, then convenience may trump all. As a cohort, they grew up with fast as a primary indicator of good and are accustomed to being independent operators when it comes to discerning what products will suit their needs.

If, however, your audience skews older, there may be a greater need for information in an easy-access, regularly-updated format. Gen X and Boomer customers rely more on the assumed expertise of sales people, and your Gen X and Boomer staff are likely to view their roles in similar terms. Tools that help uphold your staff as knowledgeable experts may gain better traction and engender greater buy-in as you roll them out than those designed to speed customers through transactions.

Solving for both of those challenges can be tricky, but they don’t have to be diametrically opposed ideas. Solutions such as those we’re seeing from providers like NewStore offer the best of both worlds: a millennial-friendly digital solution that’s fast, efficient, and omnichannel for ease of service in any setting, but that also bolsters customer confidence and employee-consumer relationships with advanced clienteling that can power more personalized customer interactions with expert salespeople.

Age may be nothing but a number, but those numbers turn up some very interesting insights and they’re worth considering when we talk about future-proofing our products and experiences and the lasting success of a retail digital change.

“It’s not complicated when you do the math,” says Cottrell. “If your customers are increasingly millennial—and they are, they’re commanding a bigger slice of the economic pie every year—and your associates are dealing with outdated tools that frustrate and slow the process of giving your customers what they need, you’re headed for trouble. Adhering to the old ways of solving problems or addressing customer concerns will present a big challenge in driving the culture and process change needed to meet the emerging tastes of a new generation.”

Ultimately, there is no one-size-fits-all solution for retail. The needs and pain points differ greatly depending on the sector and depending on the users of the digital experiences being developed. But primary research shows there are definite pain points that can be identified, and knowing what those are for people working in fashion or electronics or home decor or luxury goods can help direct where each of those sectors can make changes that will have the greatest impact.

Interested in finding the right solution for your employees? From retail to healthcare to telecommunications and beyond, we’re experts at solving complex workplace challenges with innovative technology solutions. Talk to our team today to learn about how we can help you.

Myplanet Musings

Thoughts, ideas, insights, and more from the Myplanet team.


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We're a software studio. We make smarter interfaces for the workplace.

Myplanet Musings

Thoughts, ideas, insights, and more from the Myplanet team.

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