In the world where everybody says, the retail store is dead,
“Retail Stores Will Completely Die, Says Tech Investor” —Business Insider
“Five Trends Driving Traditional Retail Toward Extinction” —Forbes
“Is brick and mortar retail in a death spiral?”—Fortune
Retail is not dead! It’s here to stay. In fact,
95% of retail sales will be captured by retailers with a brick and mortar presence.
Brick and mortar is still at the emotional and financial core of today’s shopping experience. And here’s why:
1. INSTANT GRATIFICATION
Instant gratification is the eagerness to experience pleasure without delay. When the consumers want a product, they want it now. Not tomorrow, right now! When they don’t get what they want, their psychological response is either anxiety or stress.
Even when customers order online, they want the purchased items delivered to them on the same day. What makes it more challenging is they want it for free. As a retailer, you have to concoct the most cost-effective way move the items from your warehouse to your customers doorsteps.
This expectation became a precedent due of Amazon Prime’s free shipping service you become a member. Everyone wants their shipping cost for free. This reality is the biggest challenge every retailer is facing right now. Anyone who can implement the most timely and efficient fulfillment process wins. And this where the physical store is at an advantage. When customers come out of the shop, their purchase is available in hand.
2. PHYSICAL EXPERIENCE
a. Multi-Sensory Experience (Touch and Feel)
One of the key drivers in influencing an in-store purchase is the ability to “touch and feel” the product before a consummated purchase. Touching products physically create a sense of psychological ownership. As a result, the Store Managers are constrained to move inventory from the display shelves into the customers’ hands. People like to touch it, see it, feel it, hear it, taste it, or smell it before they decide to buy. Researchers say that touching a smooth, rough, soft or hard object can influence a person’s decision-making and choice. Consumer electronics outlets such as Best Buy and Apple Stores apply this practice storewide. The smooth, rounded edge of iPhones, for example, may convey a sense of class and ease. You can only do this level of research and analysis in physical stores where you can touch, see and feel the item on the palm of your hands before you make your purchase decision.
Another exceptional example is when buying an audio system. A comparison of how actual stereo sounds versus verbal descriptions (buying online) of these sounds impacts decision making. In this category, buying from the physical store will always be the choice of preference.
Retailers need to determine which types of products will sell best in in-store and remote environments. Research suggests that products with material properties, such as clothing or home furnishings, may sell better in in-store environments where consumers can physically inspect the merchandise.
For example, products such as books and videos, which have primarily digital attributes, are more likely to be purchased online than apparel or household furnishings, which have mostly mainly products with material properties.
Consequently, retailers are obliged to implement marketing efforts that leverage the ability of multi-sensory experience to create brand attachment and drive retail sales.
b. The Human Interaction
The sales conversion rate is 12% higher when a customer interacts with a skilled associate in person.
Probably the most difficult challenge for every retailer is staffing a consumer electronics area with experts around the clock. Informed shoppers are often tech-savvy. They always ask what’s the latest and what’s the best. Everyone has different needs and motivations. Putting an experienced staff here would make a lot of difference. Talking to a trained staff is like a breath of fresh air especially when the customer is ready to buy. So don’t put a gullible sales personnel in this area.
c. The Human Touch
A light pat on the shoulder or a handshake creates a feeling of security and afterward makes guests consume and spend more. (This is true especially when a woman is doing the touching). This gesture proves that guests touched by female bartenders drink more alcohol and waitresses who touch their guests receives more tips and are appreciated more.
On the other hand, Time Trade did a study and found that some consumers may start their shopping journey online. If an item is available in a nearby store and online simultaneously,
78% of shoppers will still prefer to buy the product in the physical store.
Customers will do their research about a product through different channels (via a customer hotline number, the retailer’s website, or via a mobile app.) Whatever channels these are, they will most likely end up buying from your store. The experience you provide in your retail space determines how long customers shop. The longer they stay, the better for your bottom line. Take advantage of this rare opportunity. Customers spend 6x more in stores compared to buying online. Your only goal now is to make sure everyone’s stay is a pleasurable one.
3. ENHANCED CUSTOMER EXPERIENCE
Enhanced customer experience means better customer retention which leads to better customer service. The most compelling way to build customer retention is to promote customer loyalty. And this is realized by offering an outstanding customer service. Research conducted by Genesys says that,
Over 71% of customers would return to a company based on a positive customer service experience, even if the purchased item did not meet their full expectations!
Am excellent example is Walmart’s grocery shopping experience. The world’s largest retailer announced last year the launch of Walmart Pay, a proprietary mobile payments system for use in its stores. Walmart enhanced the customer experience by using your mobile phone to scan items before you put it in your cart. After shopping, you can scan your mobile over a bar sitting on a small stand at the counter for easier, secured, and faster checkout using the Walmart Pay app. The mere use of this technology not only increased sales but it also significantly improved customer satisfaction. Subsequently, they will gradually deploy this new technology nationwide starting the first half of 2016.
The Time Trade study found that once consumers come into the store,
82% of them will spend more money than they had originally planned.
People love to buy. People are always looking for something. They say customers don’t like to be “sold.” Untrue. People love to be sold. They want to unearth new products. What the customers don’t like is to be cheated. This know-how can help you improve your marketing efforts. Remember that cross-selling only works when you give value added services to your client.
Multiply your revenue by cross-selling complementary products to your already-existing customer base. Doing so increases the lifetime value and average order size to your company, improving cash flow and increasing your marketing budget.
Offer more options. Showcase more variety in-store than your online shop. Increasing product displays can enhance the store’s repeat purchase rate. Customers only need so much of the same thing. Unless you’re constantly innovating and updating your product offering, making it drastically different from and better than the last, it will be hard to incentivize customers to return. This practice will limit the revenue you can make from your clients.
A good example is JCPenny’s in-store sale strategy. They offer exclusive bargains that they can only avail in-store. You can’t see these offerings online. Ergo, customers, are used to going to the retail outlets to chance upon sale items that are only available in-store.
Empowered customers are shaping the way we do business today. Customers expect high-quality customer service and digital experiences. They dictate when and where they will spend their money. You have to provide immediate value, or they will go elsewhere. Retailers have no choice but to comply. Developing your marketing strategy will require thorough research and a lot of trial and error. You need to follow best practices to deliver superior digital experiences. Working with experienced partners is crucial to withstand this challenging venture.
When was the last time you bought something from a physical store? Did you do research online first before heading to the store? What made you decide to buy? I’d love to hear from you. Let me know your thoughts and share it in the comments section below.
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