This post is sponsored by Blueday.
Retail is in the midst of a grand transformation. Brands are merging physical and digital channels while shoppers turn to mobile devices for part or all of their purchase journey. But there's one thing that won't change about retail -- people are foundational to delivering a great customer experience.
In the changing retail environment, the role of the store is evolving, and retailers must be ready to help their store teams evolve with it. Graeme Grant, CEO of store performance solution provider Blueday, sat down to talk about where brick-and-mortar fits into this new era of retail, why people are a critical piece of the store puzzle and some important pitfalls retailers should be aware of:
On the role of the store in the new age of retail…
Consumers want to enjoy shopping, they want to like what they are buying and they want to know they have made a great decision. Through physical interaction with the product and store associates, stores can deliver on these needs.
Taken to an extreme, stores can deliver this even without delivering the product. For example, at Bonobos Guideshops, shoppers can see and feel products in a showroom setting and then place orders to be delivered to them. Customers can do everything they would do in a normal store except walk out carrying the product. And consumers leave having had a fabulous shopping experience. As co-founder Andy Dunn said in a podcast interview, "If you rip the inventory out and put the service in, it actually is a much more magical combination."
That is not to say that stores will all become variations of inventory-less Guideshops. They won't, and each retailer needs to find what model works for their brand. The point is that if stores focus entirely on delivering a great customer experience, customers will gladly adjust their expectations to be more flexible around other more traditional elements of a store. In the end, delivering a great customer experience must be the central role of the store if it is to succeed moving forward.
On why people are critical differentiators in retail…
Most retail stores are not fundamentally self-service environments, and many shoppers want help and advice to solve problems and feel confident in the choices they make. This is true even in big-box environments.
For example, Home Depot learned this lesson when they added self-checkout technology in stores (a good idea) and used that as a reason to reduce the number of orange-aproned employees walking around the store (not a good idea). As a result, shoppers could no longer ask a friendly ex-plumber which u-joint would last longest or get insight into which insulation worked best when wet. Without the assistance they needed to make good purchasing decisions, many customers decided to make no purchase at all. Sales slumped and the CEO was replaced, and then associates in orange aprons showed up again in the aisles and sales recovered. Store labor is not just an expense line item to be managed as a percentage of sales. Store labor is a causal driver of sales.
That said, it still makes sense to take a hard look at the amount spent on labor. After all, for most retailers, it is the No. 1 expense in a store. With increasing pressures on margins, retailers must optimize their labor investment. The key is to keep a laser focus on the role of store labor in the new age of retail. The most important and indispensable role of store labor is to help deliver a great customer experience. If it does that, then it will drive sales and therefore earn its investment. If labor is to be reduced, make sure it is around areas that don't add value to the customer.
On the biggest mistake retailers make in the store setting…
In seeking a great in-store experience, too many retailers focus on expensive, "gee-whiz" technology experiences like smart mirrors and augmented reality. While these things can be fun and thought-provoking, they're expensive and soon lose their luster. Worse, they can distract a retailer from a more powerful and sustainable driver of a great customer experience -- the human element.
Humans are social creatures and they want to interact with other humans. Stores are uniquely positioned to fulfill this desire. But doing so requires a deeper shift in perspective, seeing store staff not as task executors but as the conduits of great customer experiences.
Graeme Grant has spent the last 20 years applying advanced technology to solve critical retail business problems. He has held leadership positions with Salesforce Commerce Cloud, Demandware and Oracle Retail, and has been a key driver of several successful retail-focused startups. He helped found CQuotient a predictive intelligence company acquired by Demandware; he was an early employee and leader at ProfitLogic, which pioneered algorithmic modeling for retail and was acquired by Oracle; and he was a top executive at Allurent, a groundbreaking merchandising solution for online retailers. Early in his career, Grant was director of digital convergence for Borders Group Inc., helping link their internet and store channels to better serve their customers.