For Christopher Brooks, one of the weakness of brick and mortar retail is to try and replicate the efficiency of online. Christopher is CEO of Clientship and an International CX transformation specialist. He thinks that retail is under pressure from many directions. Although, pre-Covid19, over 80% of sales are happening offline, so the retail sector had potential for much channel development. However, looking forward digital opportunity will still have has potential for much channel development.
1. Will brick and mortar retail disappear?
At the start of 2020, the headlines aren’t favourable. We have seen some long established household retailing brands either disappear or struggle in recent years. It’s often more than their high street presence at fault. These brands have not kept pace with modern retail trading. Their distribution model is just one aspect of this. The high street is not immune to the laws of business, supply and demand. Unless you are fulfilling a genuine need (emotive or rational) in a relevant and more desired (in terms of price, prestige etc), you will be vulnerable to competitive forces. Looking forward, the ‘snap’ to online might stick as retailers have further embraced the lure of online. For those remaining focussed on a retail unit, things will need to move on.
2. So, we understand that redefining the role of the high street presence for retailers is key…
Customer experience has certainly breathed new life into tired formats. And an absence of CX on the high street is very evident when you encounter it first hand. For some their retail space has evolved away from a point of transaction to become a brand showpiece (Virgin Money), or the information exchange (Lexus), or the trading post (Argos) and for some it can even by the customer service and complaints department (think Genius bar in Apple stores).
Looking forward, the issues such as social distancing and customer’s health will have to be considered. These are not barriers for online retailers. So what will high street and shopping mall retailers do with this new requirement. I expect those who get the importance of experience will embrace it, those who dont will treat it as a distracting interruption.
Customer experience has certainly breathed new life into tired formats
3. What are its defects and virtues in front of the online retail?
ICS (Institute of Customer Service) data shows that despite huge investment, consumers are no more satisfied now than they were 30 years ago. Technology has taken friction away, reduced time frames and simplified the buying process. Offline simply cannot compete. The capability blended with quality data enables the online retailer to deliver proactive customer service, averting customer issues before they occur. Whereas offline retail cannot optimise that capability.
When I walk into a shoe shop, it still needs me to tell the assistant my shoe size. If I see a pair of shoes I like and I hand the assistant the show to find my size in the stockroom, if they say no without checking to compete with the speed of online, I don’t believe them. It actually works against them. One mistake offline makes is to try and replicate the efficiency of online. It cant compete because it always has a visible physical space to consider which goods or people will travel through. Instead offline must use its USP. It’s emotional engagement and sensory advantage to achieve this.
Redefining the role of the high street presence for retailers is key
4. Can you name any case?
Yes. For example the colours in Sephora or smells in Lush are cases in point. And as Apple demonstrate the importance for human interaction to resolve issues enables retail assistants to provide customers (TAP) three very appealing and often hugely influencing elements:
- Time (relevant to the importance of the purchase to the customer, not the company)
- Attention (stay in the moment connecting with the customer)
- Promise (promise to yourself to be the best you can be and a heartfelt promise to the customer to deliver).
5. You have said that offline simply cannot compete… What is its biggest problem or weakness?
My observation is that retailers either do not define who they wish to target or identify a specific segment and really tap into their need. Those who go niche have the best chance of success because they can provide a very tailored consistent experience to customers who have similar requirements and desires. For instance the rising trend in Cat Cafes and Vintage clothing. This will deliver a sustainable audience if they can reach them and that’s where online is critical, to reach the audience, tell stories and continuously bring new customers into the experience. But too often the importance of digital to make this a sustainable success is underutilised.
Size isn’t a factor, retailers always have complaints above their size. Smaller retailers bemoan they don’t have the bandwidth to do more than manage their retail outlets whilst larger retailers treat their online commerce as another channel, rather than part of an overall buying experience.
Offline simply cannot compete. Online retailer deliver proactive customer service whereas offline retail cannot optimise that capability.
6. As you mentioned before, technology has taken friction away, reduced time frames and simplified the buying process. Is technology vital in retail?
Too often technology is employed to fulfil a functional part of the retail experience more cost effectively. This isn’t transformation, it’s preservation. It’s not just a case of replacing the manual or human design process with a technological one. But we see this often; stock control, payments points and collection methods. It does get more interesting for instance with augmented dressing rooms. Although this isn’t anything new to the experience. It’s just replacing what’s already there. For me this is the missed opportunity to evolve the offline experience by integrating technological capability.
7. Highlights a current technology or innovation that you believe is setting a trend.
Offline retail has the opportunity to connect and create interest or proximity group communities, but this means thinking outside of the metaphorical four walls of online. For instance, I was speaking to a local council who were struggling to engage and support their local independent retailers as they’d hoped. Town halls and focus groups were ineffective because it will always cut across someone’s trading times. But without engagement the retailers felt ignored and progress was halted. A catch 22. But the retailers see each other as a community who want to help make things better, rather than just a talking shop, so when you enable them to engage on their terms using technology, opportunities open up.
Retailers do not define who they wish to target or identify a specific segment and really tap into their need
8. Can you give us an example?
I-Together is a great retailer engagement App which recognised this and brings retailers together, without leaving their stores. They share their ideas and challenges with each other. Individuals, with recognised skills are then invited to work on the challenge and come up with a solution, with the App providing best in class examples to inspire. This can be completed around their trading times. Developed improvements are then assessed, benchmarked against the retailers plans and the councils criteria for success. With those ideas that meet all criteria being acknowledged and rewarded. Without the technology this isn’t possible.
9. What does it take for a store to work? Is there a magic recipe?
There may not be a magic recipe but there are certainly some key ingredients. Gaining an understanding of these is a must. Without them success could be based on factors the retailer does not control. The institute of Place Management has been tracking the 25 factors which have an impact on the success of a high street.
- Its critical to understand the potential for retail outlets to thrive in the community. It helps retailers understand if the odds are stacked against them or the infrastructure, investment and importance of the high street in that area loaded in their favour.
- Secondly, take a look at how well sectors on the high street are doing. Visit other towns and retailers in the same sector who have high public approval ratings, accolades for business enterprise and if limited companies, compare performance data is available for comparison.
- Finally, understand what matters most to the customer and the measures for retail success (e.g. stock rotation, repeat sales, revenue per space needed).
This provides the sound foundation to then produce a business plan to assess the potential for success and key dependencies to protect. With the ‘what matters most’ known, a customer experience plan to deliver a differentiated programme will ensure that beyond product, pricing, promotions, placement and the people customers have a reason to return.
A customer experience plan should ensure that customers have a reason to return
10. How is customer loyalty achieved?
This will vary by sector. For instance in the takeout food sector I’ve seen data showing five purchases within a given period of time defines a loyal customer. A loyal customer will not be exclusive. But when you know you have their loyalty, then its time to work on the share of category. Although, as in the case of restaurants you never want 100% of category spend because customers need to compare and contrast in order to reaffirm their preference.
Online retailer Zappos famously connects customer to competitors when they don’t have the stock. The next time customers shops they come back to Zappos because they will look after then even if they don’t have what they need. It’s easy to reflect on a day’s trading and think we weren’t at our best today, but it doesn’t matter there is always tomorrow. But for the customer, that may have been their first visit, what impression will they have. You have to always be on you’re a-game.
Reward was considered key to retain loyalty, but the new currency is acknowledgment and recognition
11. What about rewards?
Historically, reward was considered key to retain loyalty, but the new currency is acknowledgment and recognition. This means tracking social media and responding. Be that Trustpilot, TripAdvisor, Google Reviews and engaging with customers encouraging them to become part of the story.
12. How do you see the future of retail?
I had this discussion with a colleague at Clientship the other day and we compared the state of retailing in South America and Europe. In the last 10 years online retailing has nearly trebled, now representing 20% of all sales. So clearly, the model for retailing has evolved. However, with the appearance of Apple in major cities and Amazon’s various testing of high street models, it’s clear that even the most digitally equipped of retailers recognise the significance of a destination to deliver an experience which arrests all the senses, and thereby creating a deeper emotional connection.
With the lockdown blip and subsequent changes to social distance rulings following the relaxation of self-isolation, high street retailers will need to adapt to ensure health and safety are key elements to their experience, but unlike online they have the possibility to show how well and how aligned to customer’s motivations this can be.
I envisage the high street reductione in significance for physical trading, can grow in value in other aspects of decision making process, such as browsing, trialling and fulfilment. Local councils will continue to shape the state of their high streets. The more advanced recognising the importance of a blend of outlets to attract a cross-section of the community. And in turn those retailers need to compliment any offline retailing with online relationship building to create purpose and value to driving footfall.
The recovery will be slow, but retailers must learn fast as the new normal will create new learning which determine success.
Of course there is always a potential game changer around the corner which can disrupt progress. Covid19 will not be catalyst for change. Will we see a move toward autonomous vehicles and the acceleration of air quality initiatives in towns. As a positive it can lead to the reclaiming of carparks as green spaces and roads to paths for bikes and pedestrians. With the reinvention of communal areas (and now more space for them will be needed), but with more of a blend, these areas could once again become a hive of community engagement. The experience would be paramount, with connectivity, AI and data sharing essential to create personalised experiences for all, blending retail, utility, relationship and recreational activities together.
THANK YOU SO MUCH CHRISTOPHER 🙂