Many retail retailers complain about online stores. However, the showroom effect is the solution for retail to bind customers.
The consumer looks and compares in your store and leaves without purchase and then purchases the same product cheaply online. In a sense, the frustration of many retailers. However, this image is based on a misconception. Of all consumers who enter your store, only 6% intend to buy online, while 30% intend to buy from your store, according to the Columbia Business School study.
The showroom effect is not new in retail. For decades, consumers have been walking past various shops, using leaflets and other information sources to look for the best buy from their point of view. The online store is no more than a new source of information for the consumer. The online information has made the market more transparent and flatter for consumers. However, the retailer has a strong advantage over the online store: Customer Experience.
In the past 40 years, a revolution has taken place in retail. From specialized small family shops to the first supermarkets, wholesales such as the Makro to online shopping and home deliveries. All these years, this has put pressure on retailers to compete on price, promotion, but above all to make the experience of shopping as pleasant and attractive as possible for the consumer.
Market surveys by Market Force Information show a big difference between Walmart and Wegmans. The latter has better growth figures in sales and margin than Walmart. While Walmart is constantly stunting with its prices and offers. Wegmans appears to have found a good balance between its online presence, price, promotion and Customer Experience in its stores, which is fed by a variety of supported services and information for the customer.
Top performers appear to be constantly rewarded by customers for the well-trained and customer-oriented staff. An open shopping atmosphere and the right quality product that fits well with the experience and spending space of their customers. Retail has become more than just a showroom of products but much more an experience for the consumer that matches his / her life pattern.
The value of Customer Experience.
“Work is Theater and every business is a stage,” said James Gilmore. His book on economic value is best illustrated by the following example:
2 cents of coffee beans can lead to different values and experiences for the customer. It can be sold for one euro at McDonalds, 3 euros at the local cafe or even more than 5 euros at Starbucks. Speaking of margin.
More and more retail organizations are adding value to their product by capitalizing on Customer Experience. Supermarkets selling clothes or cooking classes in restaurants. It is the combination that is ‘logical’ on the one hand, but also unique. This generates new customer flows that previously seemed out of reach.
Think beyond the transaction.
In the traditional shop, the consumer is mainly focused on making his purchase as quickly as possible. Shops are not considered as an environment where you can or want to stay longer. Many stores don’t make things easy for customers either. Uninterested staff, confusing layout or multi-level shops with unclear ‘signage’. But suppose shopping becomes something a consumer likes to do. How does a retailer achieve this? There are 5 main points that every retailer should pay attention to.
- Commitment: Customer-friendly, genuinely interested, willing to help, make choices and listen to the customer. Even if this means that the customer can better involve his product elsewhere.
- Excellence: Product knowledge, real understanding of customer demand [do not sell Ferrari to a family with 4 children] and surprise the customer with product quality that exceeds expectations.
- Branding: Not only your product, but also your shop, the environment where you shop, should exude an appealing atmosphere, make your customer feel at home and appreciated.
- Speed: Be honest and clear with the customer. Pay attention to any time line a customer has. Help the customer through the transaction process as quickly as possible without chasing them.
- Problem solving: Errors occur. it is about your resolution. The customer is always right. Remember that less than 2% of customers “abuse” your excellent and comprehensive Customer Service Program. It always pays for itself!
If we look at the above points with some distance, it is clear that many of these things in your store and especially design and layout are of great importance. Keep it simple and clear to the customer. Certainly the store navigation and space you use. Make sure your staff fits naturally within the store. This ensures that the contact between customer and staff is realized more informally and easily and that the final transaction process runs naturally and smoothly.
With the arrival of the online store, the Customer Experience already starts online. Online shopping offers consumers many advantages such as a quick comparison, the peace of mind of home shopping, but it has a low ‘experience’. Customer Experience is the sum of interactions around a specific need, McKinsey said.
Transaction thinking that focuses on pricing, promotion and easy oneline transaction handling lacks the connection with the real reason for the need and motivation that a customer has. It’s not just What a customer buys, but also the Why. This first motivation can already be collected with the online store with the ultimate goal also to make the connection to the physical store and so on.
Not only do you have to continuously ask yourself in the store why and how a customer shops online, this is more than essential to gain insight into the customer’s needs and his underlying lifestyle. You should approach your store and webshop in an integral way, with a complementary way of providing services and not as a separate link within your sales channel. The history of retail is characterized by major changes and the webshop offers Retail the opportunity to realize a completely new Customer Experience.