Article by Bob Phibbs
Brick and mortar stores have the ability to surprise and delight. So does a downtown shopping area.
The sheer serendipity of walking into a store can present you with random points of view. Couple that with a retail crew trained in the soft skills of how to engage a stranger and you’ve created an engaging shopping experience.
Jeff Bezos said it best: "We don’t make money when we sell things. We make money when we help customers make purchase decisions."
And that’s true for both online and brick and mortar retailers, right? So what’s online’s Achilles heel?
People only buy what they came to the site to buy, and if you’re an apparel retailer, half of them will be returned.
Maybe that’s because Artificial Intelligence (AI) is only going to show them a slew of things they are expecting to see. There’s no serendipity...
And serendipity leads to higher sales.
The question is, when does this become the tipping point where shoppers return to physical stores?
Humans love the random discovery of something new or unexpected. No algorithm can predict what that item will be or when you personally will be ready for it.
But that doesn’t stop them from trying.
Customer engagement is all the rage in marketing circles.
Customer engagement is a connection between a retail sales associate as a representative of the brand and a potential customer.
How you manage that retail customer service interaction makes all the difference.
Many pundits are touting how to really engage a shopper; we are to bring all of the resources of Big Data to brick and mortar retailers.
But does that mean for example that a salesperson is supposed to grab a shopper in the underwear aisle and haul them to the cookware display because Big Data shows they bought a frying pan at the same time they purchased a pair of underwear? Does the kitchenware associate grab a frying pan and run to the customer in the underwear aisle?
Further, will the salesperson who knows your browsing history charge you more like online retailers?
An article entitled, How Online Shopping Makes Suckers of Us All states, “The price of the headphones Google recommends may depend on how budget-conscious your web history shows you to be, one study found. For shoppers, that means price—not the one offered to you right now, but the one offered to you 20 minutes from now, or the one offered to me, or to your neighbor—may become an increasingly unknowable thing.”
Right now the online shopper has the blind belief online retailers are on their side and brick and mortar aren’t to be trusted for low prices. In fact, 71% of shoppers believe they will get a better deal online than in stores.
But that simply isn’t so...
Checkout my recent price check of a vacuum cleaner on Amazon and the price fluctuations that one product has had over the past 30 days.
How do you compete with that?
Well first off-whenever someone states the online price is always lower - challenge them.
That said, you can’t feasibly change all your prices by week, or month, or hour nor can you charge more for the woman who drove a new BMW to your store versus the guy who rode a bike, but conceivably you could online.
Who has the time or the budget?
Oh right, online retailers have the technology that can do that in nanoseconds.
Your poor website hasn’t got a chance if you think you can compete on price.
And in-store, the less you train your crew, the more price-driven you will become. But because you aren’t adjusting prices in nanoseconds, you’ll probably be charging less than you should.
The less profits you make, the less you can reinvest in inventory, merchandising, training and even yes, Big Data.
Retail is not dead, but brands are dying.
Scott Galloway from NYU Stern School of Business says, “Amazon has declared war — with the backing of 500 million consumers and a lot of cheap capital — on brands. And we will, using our algorithm, find you as good a product for a lesser price. Amazon will figure out in a nanosecond the best deal and most likely trade you into the highest-margin product for them which will be Amazon toothpaste."
But customers still want and need engagement
You’d think customer engagement would be a priority in brick and mortar stores right now, right?
I was strolling Michigan Avenue in Chicago last month. While most store employees couldn’t say a word to shoppers, there were a few who tried.
At Saks, I was greeted in the men’s designer department, “How may I be of service to you?”
I thought, Get away from me, it’s not the 1800s. Customer engagement is finding a new way to get strangers to talk to me.
At Under Armour I was asked just after I walked through their door, “So, what brought you in today?”
I thought, My feet.
Yes, they were trying. I mean, at least they were using their voices.
When I went into Macy’s, I saw they were trying at customer engagement too.
They had a DJ in the men’s shirt display unit – with no one around.