If you are a retailer reading the headlines today, you must believe the sky is falling. From store closures, declining foot traffic, missed earnings and, of course, all things Amazon, the world of retail must seem pretty bleak. A new generation of shoppers has emerged and their habits continue to evolve reshaping what it means for their brand, product, storefront, employees, merchants, and more.
There is hope especially for retailers recognizing the importance of experience and the powerful role listening to your customer can play in delivering success. I was recently shopping at Union Square in San Francisco and ran into a 45-minute wait to get into a LEGO store. What could be so exciting about a LEGO store? It turns out, there were kid-friendly events centered around the creation of a nine foot Ninjago character. LEGO was selling experiences, not products and it seemed to be paying off.
Recognizing that millennials now represent the largest consumer demographic in the world and, according to a Harris Group study, that 72 percent would rather spend money on experiences vs. material goods, simply selling products isn’t a viable strategy. Great companies have made customer experience the centerpiece of their go-to-market strategy.
The question often asked is “how to create experiences that sell products”? Dedicated to turning customer feedback into a map for making great companies, Medallia understands the importance of customer experience. Through work with some of the most admired retail brands in the world and analyzing feedback and behaviors from their customers, what follows are three ways to help retailers not just survive, but thrive.
Don’t conduct research, open a dialogue
The attention span of humans is getting dramatically shorter—some studies cite eight seconds. According to eMarketer, the average U.S. adult now spends nearly three hours per day on their mobile device. Let’s face it, we live in a highly-connected world where traditional forms of communication between the consumer and the brand are fading.
There are many sources of feedback and one that retailers can manage is solicited feedback via instruments like a survey. Several years ago, experience leaders in retail began shifting to very short, highly personalized surveys that become a natural part of the brand interaction. One example for mobile interactions is Uber—following your ride a five-star survey is presented along with the name and photo of the driver. Another approach is e-receipt—embedding a request for feedback in the email immediately after purchase producing “near real-time feedback”.
Short, natural, and personalized solicitations for feedback should be seen as the beginning, not the end of the request. When questions are few yet relevant to the experience, and comments are included, a response becomes a natural next step. Engage with the customer but not with an auto-response.
Create Connected Journeys
It’s becoming common knowledge in retail that consumers who purchase from a brand via multiple channels spend significantly more. Medallia’s own research bears this out as a study conducted spanning 46,000 participants recognized that omnichannel shoppers logged 23 percent more repeat trips to the store. Knowing this, making it easy and enjoyable for consumers to shop across all channels should be the ultimate goal.
However, easy and enjoyable can be challenging especially in a world fueled by instant gratification and social proliferation. According to a Google study, about 82 percent of consumers consult their phone prior to making a significant in-store purchase. Odds are that the consumer expects the sales associate to have more or at least different knowledge on the products than what they have just learned on their mobile device.
Recently, I visited a Levi’s store after receiving an email introducing the new 501 Skateboarding jean. I viewed the product online and, being an Original 501 fan, I swung by the store. I was on the fence and looking to be inspired to buy. Unfortunately, when I asked about the new 501 Skateboarding jean, the associate was uninspiring in his reply: “It’s a stretchy version of the Original 501 in black or grey. Shall I find your size?” I browsed further, and eventually, left without purchasing. There were lots of directions this initial conversation could have taken—history of the Original Levi’s 501, or uniqueness of the material used, or a personal story from the associate.
In store environments where feedback is captured continuously and shared with associates daily for learning and development, the exchange is often quite different. Both the customer and the associate benefit from the shared feedback as associates get better prepared to go beyond surface conversations and get recognized for their effort both by the customer and management. It’s important to connect the journey across channels because your customer is already doing so.
Innovate continuously at scale
Innovations come in all sizes—from micro to massive—and they come from many parts of the organization. In fact, some of the best retailers we work with seek input from virtually all their customer-facing employees. With thousands or tens of thousands of employees interacting with customers and observing their behaviors, this is an incredibly powerful source of new ideas.
In an effort to increase sales of women’s apparel, one retailer tested placing more women’s inventory toward the front of the store shifting much of the men’s to the back of the store. Over the weekend a feedback pattern emerged with the theme “this no longer feels like my store.” Customers provided feedback and store associates provided suggestions—all in real-time. By Tuesday, modifications were in place and the feedback turned highly positive as their Net Promoter Score (NPS) for the store rose by 4 points but, more importantly, sales of women’s apparel grew by a whopping 12 percent over the following three months.
When the above strategies are implemented together, the outcome is exponentially improved. The customer lens broadens to encompass the entire journey helping identify friction and opportunities. These opportunities are acted on as innovation becomes a natural extension of the brand. For these reasons (along with others), experience leaders significantly outperform the market as depicted in a market analysis conducted by Medallia.