Strategies for Surviving the Retail Apocalypse: Customer Experience Design
We are told that we are in the midst of a retail apocalypse. Stores are closing, Malls are dying and everyone is shopping online. Some of this is true, but there are some smart retailers out there that are making the changes necessary to evolve and grow so they do not become a casualty of this seemingly apocalyptic happening.
In this series, we will discuss the strategies that successful retailers are employing. The first is Customer Experience Design.
Some retailers are designing customer experiences rather than typical retail spaces. Target recently opened their connected home experiential space next to their downtown San Francisco store. They enlisted the help of multi-media experiential designers, Local Projects, to create a state-of-the-art space to showcase their Internet of Things (IoT) offerings. This space doubles as an event space for startups and entrepreneurs to connect with potential customers and test their prototypes. IoT is expected to be a $1.7 Trillion industry by 2020 and getting ahead of that and specializing in that market is in Target’s business plan.
Technologies such as geolocation and in-store sensors provide a more contextual experience for customers. Using data mined from customer experiences, retailers can design a better, more valuable customer experiences both online and for brick and mortar, and can even blend the two.
75 percent of online customers expect prompt and personalized service within five minutes and 85 percent of offline customers will abandon a purchase and leave the store if they do not receive prompt customer service. But more than that, 40 percent of customers prefer knowledgeable sales staff and 83 percent want real human interaction rather than digital channels to resolve customer service issues. In the face of growing customer impatience, retail salespeople must be more than cashiers. Self-checkout, and checkout using mobile devices are a cost savings that can elevate the role of the sales associate rather than replace them. Educating sales associates to be subject matter experts not only helps with customer brand loyalty, but can alleviate the hassle of customer returns, purchase abandonment and dissatisfaction both online and offline. Perhaps this is why the big players like Walmart are investing $2.7 Billion in associate training for 2017 alone. Equipping sales associates and customer service representatives with the tools and education needed to solve customer problems at scale is the best way to create a more customer-centric shopping experience.
Just because customers prefer human interactions doesn’t mean that AI does not have its place in retail. Lowes and Macy’s are both employing AI to help with tasks and to predict customer frustration. Lowe’s AI “Lowebot” was beta tested in their San Francisco location to great success. The robot can perform tedious tasks, such as product location in multiple languages, which frees up the in-store sales associates time to help with more detailed queries. Macy’s partnered with IBM Watson and have recently launched a pilot program called Macy’s On Call, a cognitive web tool that can help customers navigate Macy’s stores and can also alert sales associates to provide assistance. While these technologies are in the pilot stage, time will tell if they will be fully implemented in their stores, modified, or scrapped altogether. With Macy’s in freefall, it is difficult to tell what they will eventually do.
AR/VR can make the in-store experience more immersive. Companies like North Face and Chevrolet are already using VR technology to provide their customers the experience of using their products prior to purchase. As these technologies become more mainstream, the ability to have small, retail experience stores for customers to virtually test drive products will become more economical.
Some stores are taking experiential design to the extreme, not by looking forward using technology, but by looking back at retail history. Wingtip in San Francisco is not just a retail store and website but also has an on-staff barber, two distinguished tailors, a shoe shine bar, a fly-fishing expert and boasts an impressive wine, spirits and cigar selection. They also integrated an amazing social club with top-shelf food and beverages, VIP events and even a rentable workspace and meeting rooms. Part of the membership fees are banked to purchase products in the retail space. This type upscale personalization comes with a price, but it is one way to be able to afford to sell upscale clothing and goods in the middle of the most expensive real estate markets in the country. The personalized service offered at Wingtip coupled with the membership to the social club, creates the kind of loyalty that only exclusivity can buy.
The shopping experience, either online or brick and mortar, needs to be seamless. The combination of usability and psychology with good metrics will create an immersive and engaging experience that will drive consumer trust and brand loyalty.
IoT beacons can track customer movement throughout the experience and encourage customers to log into an app on their mobile phones while shopping. This data can help test different experiences to help ideate and innovate the customer experience design process. Different beacons use different technologies but essentially they are a tracking pixel utilizing Bluetooth that smartphones and other Bluetooth-enabled devices acting as a “cookie” to collect those interactions. Beacons with extra technologies such as accelerometers, light or movement sensors can be used passively, to track customer movement within a space. Otherwise, the best interactions encourage customers to download an app that will interact with the customer and provide education, directions, promotions and rewards.
There isn’t just one correct way that will keep the apocalypse at bay forever, that is why we have identified a set of strategies to employ. Focusing on the customer is number one. Creating a shopping experience that appeals to them and their sense of adventure is just a start.
Our second installment focuses on why providing convenience is important to win over the lazy customer.
