Online shopping has grown rapidly in recent years. This is putting pressure on brick-and-mortar stores’ revenues. To give context, ecommerce sales have increased by $129 billion from 2013 to 2016. This represents an increase of 5.8 percent to 8.5% of total retail sales in America. 77% of the U.S. population has access to the internet as of 2015. More consumers are now shopping online because of the proliferation and accessibility of connected devices. Brick-and-mortar stores are having trouble maintaining their historic revenue levels.
Retail store managers need to find ways to make their stores stand out and provide customers with engaging experiences. A different in-store experience is crucial as store managers have seen positive financial results from improving customers’ in-store experiences. To understand the success of brick-and-mortar shops in this area, I conducted a qualitative multi-case study to examine the strategies used by retail store managers to create memorable in-store experiences.
Fun at work, customer connection and relationship, pride, genuine care, and customer connection were the main themes that I identified. These themes were key factors in successful customer engagement strategies of these retail store managers. When I started this study, I was expecting to hear about tools and training as fundamental elements of the in-store customer experience. Surprisingly, these weren’t the main themes. My impressions were that the main themes were about engagement between store associates and customers. These themes revolved around the themes of fun at work and customer connection, pride, and genuine caring.
Strategy 1: Have Fun at Work
My research revealed that the most popular strategy was to have fun at work. Store managers often attributed their success in customer engagement to their store associates having fun. Fun at work is a part of each store’s culture. It was also something that was established at the managerial level. The culture was passed on to the rest of the staff. The idea of having fun at work was expressed by dancing in the store to upbeat music, laughing at different situations and finding a way for the team to be happy and enjoyable even while they were working hard. Participant four said that store associates who are having fun have a higher level of interaction with customers. This interaction results in more customer satisfaction and higher sales productivity. I watched the interaction between the store associates with customers and I noticed that they were having fun. Customers gravitated to them because they saw the associates as happy and cheerful and adopted a similar attitude.
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Strategy 2: Customer Connection
Connection with the customer was another strategy. Instead of having the associate sell a product straight away, he/she will try to establish a connection with the customer through learning about their home projects or what brought them to the store. The store associate will then build on this connection and bring the selling aspect into conversation. This helps create a greater level of trust with customers, which allows them to be more connected with store associates. A deeper and more intimate relationship with customers leads to richer conversations that allow both parties to quickly identify ways to assist the customer.
Strategy 3: Relationship
My research also led me to the strategy of building trust with customers. This strategy builds trust and relationships with customers by establishing a connection with them through conversation over a long period of time. Four participants shared stories about customers who brought their spouses to visit a store associate with whom they had a close relationship. A strong relationship between customer and associate creates trust and enriches customer experience in the present as well as in the future. It is important for store associates to spend time with customers to build this level of relationship. This is not a relationship that can be formed in one encounter. It takes time and maturity to build.
Strategy 4: Pride
Participant 2 described pride as drawing parallels to their store as their house: “I use the analogy that when you shop in my store it’s almost like you are coming into my home. How would you treat these customers if they were your guests? This approach creates pride in our associates. They make it personal.” Store managers can take pride in the hospitality and pride they show their customers. It can be hard to foster pride. Participants four shared their methods for building pride among store associates. Giving them a deeper understanding of what makes them tick encourages buy-in, and fosters pride in the associate.” This seemed to have a positive effect on the customer’s shopping experience.
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Strategie 5: Genuine Care
From the data collected, the final strategy emerged as genuine care. Participants two stated that genuine care is not just a job; they actually care about their customers. We listen to our customers and take the time to understand their needs. This idea is linked to a few other strategies, namely customer connection and relationship. This creates a deeper relationship and connection with the customer because the associate cares about them. Participant five stated that they interact with customers because they care about them. This concept of genuine care seems to be more effective in building a relationship with the customer.
The brick-and-mortar experience starts with customer experience. Customers have many choices when it comes to shopping. Engaging customers is one way to create a unique shopping experience. A differentiated customer experience can be the difference between a retailer and its competitors. Brick-and-mortar stores have become increasingly competitive in a highly competitive marketplace. Customer experience is an essential component of their business. This study identified and discussed factors that can lead to a different customer experience. These five strategies can be used by retail store managers to build deeper customer relationships and increase revenues if they are applied correctly.
How to build a store of the future? Continue reading!
According to Albert Vita (director of visual merchandising and in-store experience at the Home Depot), a store of the future must always be customer-first and open to experimentation. Vita spoke about the topic with Zivelo CEO Healey Cypher earlier in the month at the National Retail Federation’s 2019 Big Show.
It is also important to have a supportive network.
Vita stated that it is crucial to ask Vita “What’s the supply chain for the future?” when thinking about innovative stores. “What is our future marketing department? What is our future inventory planning and replenishment team? What’s the future of e-commerce, IT and HR? I am arguing that innovation is a rising tide that must lift all boats.
Vita said that there are three things retail executives need to remember when building the store of their dreams.
He said that the first power is the power to ask questions. Vita stated that the in-store experience of designing will never be the same as the quality of the questions you ask. It is crucial that you ask the right questions.
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The power of mind-sets is the second power. Vita noted that there are mind-sets that encourage abundance and those that promote scarcity. Vita stated that if you have a mind set of scarcity, your focus is on your competition, protecting what’s yours, and protecting your market share. If you can take a step back, and work to develop a mindset of abundance, you will be able to achieve a 10x breakthrough rather than incremental 10 percent improvements.
Vita stated that the power of values is the last power. Vita stated that the quality of the store or the in-store experience of the store will not be determined by how grounded you are in the company’s values. Vita said, “For instance, if you had to build a store of the future what values would you bring to the store?” What values would it ooze?
Vita also stated that there are three superpowers retail executives need to consider when creating the store of tomorrow. These superpowers include:
- Empathy, which is the ability to empathize with your customers as they shop in your store.
- When you think about how to communicate with customers and employees, humility and the absence ego are key.
- Love, or making technology decisions based upon genuine affection for your customers and associates.
Vita laughed, “I don’t know how many sessions at NRF it took you to think you would be discussing love,” Vita said. “But you’re in one now.”
It’s also important to consider how you will measure the success of your store of the future when designing a store. Vita stated that traditional metrics like gross margin return of investment (GMROI), sales per square feet, and gross margin sales are valuable. However, a holistic approach to assessing innovation is needed.
“If your company plans to build a store that is the future, or a new and innovative in-store experience, wouldn’t it make sense that you would have to measure it in ways that are not possible before?” Vita asked the audience.
What are some ways to evaluate in-store innovation holistically? Vita suggested that customers be surveyed using in-store cameras and analytics to see how customers move through the store. Vita stated that all things VOC (or what we call the ‘voices of customers’) are important to capture.
Spend time with your associates. Vita said, “Who better than the store associates who are there every single day on the front line to see if a particular innovation is working?”
Finally, ensure that you measure cross-channel metrics. Vita said, “Even though we may have created the store of the future or instore innovation, there might be other metrics affected by what was done in-store.” Vita said, “Supply chain metrics for example or online. It stands to reason that creating a store in the future within a ZIP Code would alter the online behavior of all ZIP Codes within the store.