Strategies for Surviving the Retail Apocalypse: Convenience

In our first installment, we examined how companies are using Customer Experience Design as a strategy to survive the “Retail Apocalypse.” In this installment, we look at the novel strategies companies are using to become a more convenient shopping solution for customers.

Customers know that when they order from Amazon, they will get the product they need in a matter of days, and sometimes hours. Uber’s delivery options, Amazon’s Prime Now and the myriad of other delivery services are growing because of customer demand. Amazon’s Alexa and Dash are teaching customers that whatever they want is just a word or a motion away. The biggest barrier to customer convenience is outdated and outmoded supply chains and manufacturing forecasts. Smart manufacturers and retailers like Amazon and Walmart have been trying to solve these big problems for years, and it is only a matter of time before someone disrupts supply chain with a big idea beyond that of Artificial Intelligence (AI) or robotics.

Target has modernized and optimized its Omni-channel supply chain so that products can basically be shipped from the closest location to the customer directly. Other stores, like Gamestop are fulfilling online orders from local stores to decrease shipping times. Click and Collect is another solution retailers like CVS are using to help customers get the products they want in the shortest time possible. Amazon is also playing with the idea of predictive sales and on-demand clothing and apparel manufacturing to shorten their supply chain to the customer even further. Walmart is going low tech by piloting a program where Walmart workers can make deliveries to customers on their way home from work. Companies seem to be pulling out all the stops when it comes to getting online purchases in customer’s hands faster.

Customers want additional services such as tech support and on-demand customer service whether they purchase their product online or in the store. AI Chatbots are clearing the path to purchase by assisting customers when they navigate ecommerce sites. Eventually, AI Chatbots will perform even more services such as basic warrantee issues, repairs which will alleviate customer service inequality potentially decrease customer returns. In lieu of actionable AI to take on more complicated customer service issues, Amazon, Xerox, CVS, American Express and others are hiring thousands of work-at-home customer service agents across the United States. These customer-centric businesses are investing in human capital to better meet the needs of their customers. MasterCard recently partnered with Subway, Cheesecake Factory and Fresh Direct to employ an AI Chatbot, powered by their payment app MasterPass that makes mobile ordering and payment simple.

MasterCard’s MasterPass provides Chatbots for easy checkout (Photo Credit: MasterCard)

Customers can be fickle and sales can be lost if there are delays in the checkout process. Entering credit card information online, or setting up an account can become a sales barrier if it is overly complicated or takes too much time. Like Amazon and their one-click purchase and payment options, other successful retailers are utilizing technology to make check out simple. Customers can use Google Wallet or Apple Pay but they also have new options. MasterCard is already making the checkout process easier and more secure for customers. The future of payment lies not in a card or even a chip and pin, but in biometrics and Iris Recognition for authentication and mobile payments.

Cosmetic and personal product industries are capitalizing on consumer’s desire for convenience as well as personalized experiences and, in some cases disrupting their industry altogether. For example, Dollar Shave Club is having the largest impact as we see them eroding industry power-house Gillette’s overall market share. They made it more convenient and less expensive for men (and women) to purchase razors online. This business model is so successful that other razor companies, and other retailers, are duplicating the experience for customers.

Dollar Shave Club: The video that launched an industry disruption (Credit: Dollar Shave Club)

Customers want the convenience of being able to purchase anywhere. This is where mobile experiences are key. Younger shoppers expect to be able to engage with a brand or a retailer via their mobile device, especially when they are in the store. This is where retailers can deliver an end-to-end branded experience for customers to share through their social networks.

Developing an integrated Omnichannel strategy requires communication and collaboration from many departments: IT, Marketing, Customer Service, Executives and Sales. Once you create a holistic multi-platform integration, it is easier to manage and scale. UK clothing retailer Oasis is an Omnichannel success story. The company’s mobile app, ecommerce site and brick-and-mortar locations work together seamlessly. Store associates are armed with IPads to help deliver customer education, locate and order product if necessary and for check out purposes. The ecommerce site has a similar feature called Seek and Send which locates a product in one of the retail stores and ships it directly to the customer. Returns are not only free, but convenient: free shipping is paired with the option to return product via a network of over 5000 drop-off points in Oasis stores, convenience stores and grocery stores.

Amazon Go, the newest ecommerce giant’s iteration, is basically an employee-free convenience store that utilizes RFID to allow Amazon Prime customers to grab products on the run without the hassle of checkout. All products they remove from the store are charged to their Amazon account. This is another example of how Amazon testing the different technologies to deliver a fast and efficient shopping experience to their customers. Of course, once they perfect this RFID-driven technology, they will offer it to other retailers at a price and in a package that insures the customer-centric experience Amazon demands. But data-driven Amazon will most likely own the data the technology collects.

Is Amazon Go the future of the convenience store? (Credit: Amazon)

The test-and-learn opportunities for convenience strategies are endless. Capturing and using the data, especially how, where and what device sales are happening is crucial to help innovate for the future.

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