How To Enhance Retail Customer Experiences With New Technologies, Part 1

A Conversation Between A Retail Maven And A Technology Futurist

Industry News, Mobile Apps, Mobile Strategy Comments (2)

-Throwback Article-


Today’s in-store retailers face substantial competitive pressures from online e-commerce. Without the cost of building and maintaining “brick and mortar” outlets, online sellers can offer merchandise at significant discounts. Yet despite this advantage, most consumer retail sales occur in physical storesFloat Senior Analyst Gary Woodill (GW) spoke with retail maven and former Float Director of Sales Colette Young (CY) in the first of this two-part series about what online and” brick and mortar” retailers can do to enhance customer engagement using new technology.

GW: I like to go into a store, get what I came for, and leave with my purchase. Like many people, when I buy something, I usually want it NOW. To my way of thinking, a store that has stock on hand I can buy and carry home trumps waiting several days for delivery.

CY: Brick-and-mortar retail will hold significant value until e-commerce can create the same, if not better, shopping experience. Today, there is no way to replace customers walking into a store and being able to grasp a store’s entire selection. The store is showcased in an effective manner and the experience of physically shopping in that store. The way you consume products in a store isn’t the same as the way you consume products by scrolling through page upon page online, but I think there is a lot of movement to bring the in-store experience online and onto devices and tablets.

That being said, I am a big supporter of the growth of e-commerce companies, because an online brand or company completely controls the relationship with the customer. It is a different experience, but maybe that is okay; it’s perhaps even better. To your point about wanting an item now, Amazon offers Prime Now, a service available in select U.S. cities where merchandise is delivered to a customer within 1 hour of order. Almost all online retail companies also offer free ground shipping and the option for either expedited 2-day shipping or overnight shipping. Many of these companies also provide free expedited 2-day shipping to customers who spend over a certain amount. You could probably even get 10% off if you give them your email. The list of concessions goes on and on.

GW: Well, I guess I could wait a few hours to get my hands on my purchases. But here’s another problem: I like face-to-face interaction when I am shopping. In a store environment, well-trained staff can make a huge difference in purchasing decisions, especially for large and/or expensive items. Many people are just like me and want information and reassurance from a real person before making a costly acquisition. I think that having a well-informed staff who can talk face-to-face with customers in a store is a highly valuable competitive advantage over online websites.

CY: It’s fascinating to see the spiral in e-commerce companies that were once powerhouses, with millions in VC funding – Gilt, Fab, and BirchBox. It’s just a matter a time before the next round of companies hit their demise. On the flip side, there is a new rise in e-commerce companies such as Casper, Raden, and The Line. These are web-first companies that have realized the value in offline relationships, and they have opened outposts in some major cities so the consumer can experience the brand in-person. Can you imagine buying a mattress without laying on it (guilty)? What about ordering luggage without testing to see if it’s as durable as your Rimowa (guilty again)? What about purchasing a petrified wood and cracked resin side table you’re never seen in person that costs as much as your rent (guilty x3)? This happens now, and they are selling out – this is the new normal. I love this model – have a few grand, curated stores that support the growth of your company offline, but focus foremost on scaling and building the relationship with the customer online. I’m also obsessed with The RealReal. They are doing it right by understanding the customer. Plus, Julie Wainwright is a total boss.

GW: I think many shoppers like to touch and feel the merchandise. For me, shopping is usually a very tactile and 3D visual experience. I want to pick up and examine items before buying, something I can’t do online (at least not yet!). Reading online descriptions and looking at images isn’t nearly as satisfying as a shopping experience compared with being able to see, touch, and directly handle the actual physical item.

CY: Companies like Warby Parker understood this pain point, so they send you five products for you to try on in the comfort of your own home, free. Zappos was the original guys that nailed this, and they state that “if you are not 100% satisfied with your purchase you can return your item (s) for a full refund within 365 days of purchase.” So nothing to worry about here. Even Aloha does this with food. This new e-commerce company understands the “try-before-you-buy” model, how you’re building trust with the consumer, and standing behind your product.

GW: What about the hidden costs and inconveniences of online shopping, something that most online shoppers don’t think about? Hidden costs can include shipping and handling charges, customs and brokerage fees for cross-border shopping (I live in Canada), time spent looking at tracking codes to follow the delivery path of your purchase, and lost packages.

CY: On the flip side, you can look among aggregation sites to find the best deal based on sale price or current availability (i.e., ShopStyle, Lyst, Nuji, Polyvore, etc.), while also seeing all of the color and style options that you might not have seen in the store because the buyer for that store didn’t purchase a specific color or style. You can also track products online and get price notifications when those products go on sale to get the best bang for your buck.

GW: Surely, one of the advantages of having a retail store is the ability to upsell. Customers who walk into a store often purchase items they didn’t originally intend to buy, but which catch their eye as they wander through the store. While websites can and do make recommendations for additional purchases, helpful retail store staff, or attractive displays can make a big difference in sales volume.

CY: I agree that informed sales associates and great merchandising can make a difference, but I also think that the potential for upselling is almost more enormous online. Some websites allow a customer to hold items in a shopping cart for 20 minutes while they continue to shop around for other things. I always get anxious, thinking I may be missing something, so I continue shopping and usually always end up buying more. Most clothing sites recommend other items to “complete the look.” I also think you are less likely to really “track” what you’re spending if the shopping experience is three clicks to check out. When you have to wait in line in a store, you have time to think about what you’re buying versus pressing three clicks and boom – it’s purchased.

For me, I have a “personal stylist” that I work with on Net-a-porter. I have my wishlist of items that I want, and it also tracks the things that are sold out, but I get an email when it comes back in stock, or someone returns the object. When the item comes back in stock, it’s almost like I’m begging them to sell it to me instead of someone else. How’s that for psychology! They also store all my information, so I don’t have to re-enter my credit card, and it’s free shipping both ways.

Amazon is one of my favorite companies, so I’m going to mention them again to show how valuable they are. I agree that sales associates add value, but so do customer reviews, and Amazon is the king of them. Did you know that 96.5 percent of products on Amazon aren’t even from Amazon? Amazon offers the product on their site without the risk of holding and stocking inventory. Most customers don’t even know this. Trumaker, a new e-commerce brand that sells “built to fit” clothing for men, offers you your stylist to help you online.

Additionally, MM. LeFleur offers a “bento box” of wardrobe staples for women (4-6 pieces, not subscription) that are curated just for you. You can even make an appointment and hang with one of their stylists in their showroom to check out the goods.

  (End Part 1)

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Gary Woodill is a senior analyst with Float, as well as CEO of i5 Research. Gary conducts research and market analyses, as well as assessments and forecasting for emerging technologies. Gary is the co-editor of "Mastering Mobile Learning," author of “The Mobile Learning Edge,” and the co-author of “Training and Collaboration with Virtual Worlds.” He also presents at conferences and is the author of numerous articles and research reports on emerging learning technologies. Gary holds a doctor of education degree from the University of Toronto.

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On July 6, 2016
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2 Responses to How To Enhance Retail Customer Experiences With New Technologies, Part 1

  1. […] This is part 2 of last week’s blog post, How To Enhance Retail Customer Experiences With New Technologies. […]

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