Last year was a difficult one for retail.
In 2019 there was a record number of store closings. But, consumers still crave in-store experiences.
And then came 2020.
In the Age of the Customer, what is the future state of retail as global consumers endure a seemingly endless pandemic that has impacted almost every aspect of daily life?
We reached out to retail expert Rachel Williamson, who founded Running Great Stores, for her unique insights.
Jim Tierney: Given the massive shift to e-commerce since the pandemic started, can you talk about the challenges facing retailers/retail marketers?
Rachel Williamson: There is no doubt that there has been a shift to e-commerce, but this shift has still not been enough to make up for the sales decline coming out of brick-and-mortar stores.
This is causing retailers to rethink every aspect of how they operate in this omnichannel world and engage customers. While most agree that we must be everywhere the customer is, creating seamless experiences is easier said than done.
The customer doesn’t differentiate between online and in-store. They are shopping at a brand that they like so the experience must be seamless between channels. This seamless experience has been difficult for many brands to master.
Jim: What can retailers do to combat these challenges as the country slowly reopens?
Rachel: Retailers should evaluate their omnichannel experiences and course correct any pain points. Some retailers have relied too heavily on one channel or the other.
While many are saying the in-store experience is no longer relevant with COVID and changing consumer behaviors, I would caution us all to slow down on assuming brick-and-mortar is ending.
Customers love to go shopping. We need to give them a reason to come into stores.
The store experience may be changing with more of a showroom experience. But whatever retailers decide to do, brick and mortar will remain a necessary component to the brand experience.
Jim: We hear and read so much about the Retail Apocalypse. What are your thoughts on this and what do you foresee for retailers in light of the pandemic?
Rachel: I think there is a lot of fatigue around this Retail Apocalypse phenomenon. Or maybe that is just me.
There is no doubt that COVID exacerbated the impact to retailers who were already teetering on the brink mainly due to three components: Large debt load, inventory/supply chains challenges, and too many retail locations.
COVID or not, this is a recipe for disaster.
It’s a “survival of the fittest” situation as it should be. This should be a lesson to all of us in retail.
Know your customer, know your why, and continue to look around the next curve and assess what you can do better!
Jim: How have customer behaviors and expectations changed during the pandemic, and do you think any of this will be permanent?
Rachel: Customers have higher expectations on cleanliness and convenience. Curbside pickup has resonated and curbside returns likely need to be expanded as well.
Jim: How do you think in-store retail will evolve as we emerge from the pandemic?
Rachel: I hope that brands will wake up and realize we must give customers a reason to shop in-store. A compelling reason!
Jim: Do you think in-store retail will ever be the same as it was before the pandemic?
Rachel: I hope not! Let’s hope in-store experiences get exponentially better.
How?
Brands need to invest in their brick-and-mortar locations. Run-down, out-of-date stores won’t be acceptable.
Compelling experiences will matter more than ever. While safety is so important, it cannot all be about the ‘rules of COVID and shopping in their store’.
We have to connect the customer to the brand. Yes, social distancing, sanitization, and masks are part of the equation today, but I need more than that and a lot of customers I have spoken to feel the same way.
Jim: How has the pandemic impacted retailers as far as positive changes for the future?
Rachel: I think customers have raised the bar and that is always a good thing.
They have shown they need to feel safe with clean stores. I hope that doesn’t revert back.
Especially grocery stores. They are much cleaner than pre-COVID and that’s a really good thing!
Customers are willing to wait in line for something they want. That shows loyalty to a brand for sure!
Jim: Given heightened consumer expectations and limitless options, how do you think retail stores will or should evolve?
Rachel: Customers expect Service. Sustainability. Community. Value.
Customers will always love going shopping, but the experience they expect is completely different. So, retailers will need to become a student of their customers.
What do they want?
What do they expect?
What brings them joy?
And then give it to them.
It is the retailers who don’t think that any of these changes are necessary who won’t be here in a few years.
For the immediate future, stores will still be staffed with humans, so retailers must teach their teams to connect with customers in an authentic way, personalized!
Know their name. Know what they bought. Know what they like.
The days of rude associates, indifference, dirty stores/fitting rooms, and poor service can no longer be tolerated as customers have too many other choices.
Jim: Where does loyalty fit into the retail equation?
Rachel: Loyalty is the price of admission these days. Retailers need to figure out what really energizes their customers and this changes by brand.
Look at Restoration Hardware and Ethan Allen. Customers pay $100 annually and get a discount 365 days of the year. It’s clean and easy.
Apparel hasn’t figured it out yet.
There is a lot of copy/paste programs out there (double points, shop a day early, etc.) but these don’t appear to get customers off the couch.
If brands know their customers and give them what they want, the customer will be satisfied. The loyalty program is more for marketing teams than for the customer.
Jim: With so many options today, along with a totally different consumer mindset, how can retailers spark engagement and attain more loyalty?
Rachel: Talk to them.
If you are an independent retailer, you have this luxury.
If you are a chain/brand, you need to teach your associates how to engage customers to not just sell them something, but to understand who they are and what they love.
Moving Forward
As Rachel notes, in-store retail might never look the same again.
To really earn the loyalty of your customer post-pandemic, it’s going to take listening to them and offering a program that is differentiation and provides great value.
She hopes retailers learn invaluable lessons from the current pandemic and focus on providing clean stores filled with great assortments of items, great customer service, and value, supported by a sense of community.
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ebbo helps brands achieve their customer loyalty goals with full-service, end-to-end solutions and also creates original educational content straight from the experts to help loyalty marketers stay on the cutting edge of customer engagement.