Is it really discovery shopping if Amazon found it for you?

Effects of data-driven curation on discovery experiences

 

 

Remember when a trip to the store could yield a new discovery -- an unplanned purchase but one that delighted the customer?

Ecommerce handles specific shopping needs seamlessly and efficiently: Search for “motorized pedal exerciser” and buy it in less than three minutes.

But so-called "discovery" shopping — such as figuring out what to get your hard-to-shop-for great aunt for her 90th birthday — is much easier to do through brick and mortar browsing.

 

Selling discovery experiences

The world of in-store commerce offers shoppers an experience, an interaction with others that can't be replicated online.

In the best-case scenario, the experience is enjoyable and memorable, one that a shopper wants to repeat with that retailer and emulate at others.

No matter how good a recommendation engine or a chatbot is, the feeling a shopper gets from finding a perfect product can only come from shopping in a physical store.

That is, until an online retailer aggregates its collected data and presents it in a physical store as a curated collection to reach a specific audience.

If an online behemoth parlayed all the knowledge it has gleaned from the data it has gathered about its ecommerce shoppers, that retailer could be very well positioned against its competitors, online as well as brick and mortar.

 

Peer-based discoveries

Amazon has recently opened a handful of Amazon 4-Star physical locations, which are designed with discovery in mind. All the items are top-rated, and the selection will change frequently, depending on their customers' ratings.

The first, in the SoHo section of New York City, offers at-a-glance products that are "popular in SoHo," "frequently bought together" and "most wished for," among other categories.

Amazon can easily put these displays together due to the data it collects on its online shoppers. And that data collection continues to grow offline.

Amazon-exclusive products are also available, and Prime members get the Amazon price, while non-members pay MSRP. Signing up for Prime in the store not only provides customers lower pricing, but also adds to Amazon's information database.

Shoppers can see how many ratings a product has received and what the average rating is. Others have reviews displayed nearby.

The combination of a physical location and all that aggregated data is a fierce combination.

 

Personal discoveries

However, "discovery shopping" is more than simply sorting through trends and selecting from the most popular items.

If that were the case, small, specialized shops and boutiques would not be frequented, shunned for larger, on-trend department stores.

But the opposite is largely the case.

Discoverers aim to find the one-of-a-kind for a more personal gift or to satisfy their own personal taste. That's more likely to be found in a shop on Main Street than online, because it is not mass produced, so it therefore can't have hundreds of reviews.

 

In the end, Amazon's strategy for its physical stores, and any others like it, will mirror that of large department stores that have built a decent ecommerce channel.

Those stores, such as Macy's, Target and Kohl's, can also look at their data, slice it up regionally and offer only those products based on that data.

While not quite as personal as the local shop on the corner, there's a huge opportunity for larger companies to meet their customer needs more precisely.

 

How retailers are actually spending their customer service dollars

 

 

When companies describe themselves as having "excellent" customer service, the claim sounds user-centered but too often it's actually just a company-centered focus trying to position themselves as user-centered.

Those companies are generally concerned with efficiency and reducing costs first and foremost, and are just hoping to improve customer relations by osmosis, without actually doing the work to get there.

 

Questioning ROI on CX investments

Some retailers resist customer experience investments, believing they do not provide a significant return on investment.

However, Gartner reports that when it comes to making a purchase, 64% of people find customer experience more important than price.

Constantly trying to be the lowest-price provider of goods is futile: Competition is steep and low price is not an effective means of cultivating loyal customers, who are the foundation of success.

According to a Walker study, by 2020, customer experience will overtake price and product as the key brand differentiator.

Customers are loyal to a retailer because they believe they are getting a better experience, higher value and benefits than they would get from other brands.

In addition, a recent study from RetailNext found 57% of respondents said customer service is the only reason they go to a retail store.

Not selection, not price, but service.

Here are 4 pairs of categories in which retailers invest their customer service dollars. You decide which ones will actually create better customer experiences.

 

1: Self-service tools vs well-trained sales associates

Shoppers like that expect to find associates equipped with the information and training necessary to assist shoppers and close sales.

Too many retailers do not have that staff, so customers are frustrated and disappointed.

Today's shoppers want knowledgeable associates in the stores they frequent, as well as convenience. They also want to build a relationship with the retailer.

Retail management misreads customers’ disdain for associates as a desire for self-service.

But customers are happy to be served by well-trained, engaged salespeople. The frustration comes when the associate knows little about the product or has no enthusiasm.

Training goes a long way to fix that problem and helps build a sales team that is a contributing factor to customer loyalty.

 

2: Market saturation with new locations vs pop-up stores

While some brands focus investment toward market saturation via geographical expansion, others use pop-ups to build excitement about their brand.

Event-and experience-driven retail is becoming more popular, as department stores create pop-up locations or marketplaces in their stores and in hip shopping meccas.

Such temporary installations are smaller and more focused with their offerings and are replenished much more frequently, creating the impression of a “fresh” experience at every visit.

 

3: Promos to attract new shoppers vs rewarding repeat customers

Newvoicemedia.com reports that the top reason customers switch away from products and services is that they feel unappreciated.

Once customers have demonstrated their loyalty, it's important to reward them.

Too many retailers use incentives only to attract new customers. That, in effect, "ignores" loyal customers, leaving them frustrated and unappreciated.

 

4: Advertising costs vs experiences that drive WOM marketing

Nurturing existing customers and improving customer service can cost considerably less than launching advertising and marketing campaigns, but can have just as powerful an impact.

As Tony Hsieh, Founder and CEO of Zappos has said, “We take most of the money that we could have spent on paid advertising and instead put it back into the customer experience. Then we let the customers be our marketing.”

75% of Zappos' sales come from returning customers, and the company earns more than $2 billion in sales annually.

The Zappos's commitment to having happy customers and employees ends up being good for business.

 

Walking the customer service walk means more than just talking the talk.

Strong training, with an emphasis on earning customer loyalty, will result in a truly user-oriented business.

 

3 POS capabilities retailers need to give shoppers what they want

 

Pleasing shoppers is simple: Give them what they want.

It’s simple… it’s just not that easy.

Here are three things every retailer needs for controlled inventory that helps you get customers the goods for which they come to you.

 

1. Inventory accuracy

With Retail Pro, you can improve inventory accuracy, so you don’t lose sales due to out of stock or mismanagement.

You can see exact inventory location down to the bin.

With integrated RFID, you can see location of individual inventory items within a 6-foot diameter in the store or warehouse.

 

2. Real-time updates & reporting

Real-time communications in Retail Pro help your records keep updating throughout the day so managers are always on top of sales trends and proactively replenish stock.

With deep reporting capabilities in Retail Pro, managers can evaluate core KPIs and make needful adjustments in their store-level operations to ensure the store stays on track for sales performance.

 

3. Send sale & store fulfillment

Because you can see inventory at all locations from your Retail Pro POS, sales associates engaging shoppers can check inventory availability at other stores.

Associates can help customers get what they need by helping them order online or by sending the sale of an item to a different store.

The item can then be delivered to the customer’s home or to their nearest store location for in-store pickup.

That means customers never leave your store without having their needs met.

 

Put shoppers first

Keeping inventory operations is critical for reinforcing the trust and expectation shoppers have of your ability to get them what they need.

Efficient store operations capabilities in Retail Pro help you take control of inventory, so shoppers won’t leave disappointed.

Request a consultation or talk to your Retail Pro Business Partner today to learn more about store operations capabilities in Retail Pro.

 

 

Attracting and retaining the elusive Millennial shopper

 

 

Loyal customers — the Holy Grail for retailers.

Repeat shoppers are a source of recurring revenue. Smart businesspeople know that success lies in cultivating loyalty, and that means more than creating programs that simply collect customer information.

Today's educated customers understand loyalty programs are often of more value to retailers than to customers.

Millennials in particular are sensitive to that value proposition, and retailers are starting to serve up programs targeted toward the specific desires of this demographic.

A quarter of millennials and 19% of Gen Xers like to shop with family and friends. It's a social activity that's enjoyed at a brick-and-mortar storefront.

But, while Gen Xers value the relationship with a store, Millennials value experience and don't have the same brand loyalty as the older generation.

It's easier to get a millennial to try a competing brand, so it's more difficult to retain millennials as customers.

Retailers have to work at providing customers perceived value consistently to earn their loyalty.

3 things Millennials look for:

 

1. Technological "wins"

 
How does a retailer make it easy for customers?

Millennials are dependent on their phones; 84% of them in a recent study said their mobile devices were the most important thing in their lives.

Retailers can use that knowledge to their benefit by, for example, offering mobile apps that are easy-to-use and relevant.

Many say that shopping is easier through an app than through a web site; by offering a digital experience that reduces purchasing friction and makes shopping easier, a brand can improve its relationship with millennials.

 

2. Shared value system

 

What matters to a brand, matters to Millennials.

For example, Patagonia has supported grassroots activists working to find solutions to the environmental crisis.

Shake Shack's ethos is "We stand for something good," which is reflected in its carefully sourced premium ingredients from like-minded purveyors as well as in its community support.

Customers feel good purchasing from companies that align with their world views.

 

3. Personalization

 
Yes, for customers, it's all about "me."

That doesn't mean obsequious associates greeting customers they don't personally know by their first name or creepily sending birthday cards to clients they've barely served.

Rather, it means positioning the company in a way that feels customized.

That includes having Instagram-worthy products, immediate customer service response and marketing that focuses on word-of-mouth.

Influencers — high-profile customers whose style is "gospel" — can be more powerful brand advocates than any type of advertising.

But it's not all about celebrity: For example, Carter's apparel encourages Millennial parents who want to share photos of their Carter's-clad babies to use its hashtag #lovecarters.

Retailers can have paying customers, or they can have loyal customers.

High quality products and experiences encourage loyalty in Millennials, who tend to be more easily swayed by special promotions and lower cost than previous generations.

However, loyalty can be earned: Retailers with compelling brand stories and experiences that regularly exceed expectations are positioning themselves to welcome the elusive repeat millennial customer.

Gesture recognition helps retailers gauge shoppers’ real interest

 

 

Artificial intelligence can help even the fussiest customer find just the right product, in a fraction of the time it would take without any technological assistance.

While AI has been used in various businesses, including retail, to improve efficiencies, the technology has also been employed to help stores improve the customer experience by providing more personalized service.

Through advanced gesture recognition, retailers can determine the popularity of an item by analyzing shoppers' facial and hand gestures.

Software analyzes the way shoppers react to a certain item and determines whether the item is a potential sales buster — or a dud.

Just as an online recommendation engine analyzes a shopper’s movement within a site, gesture recognition software "learns" how an item affects a shopper, and can assist the retailer in finding an item that is perfect for a particular user.

 

Understanding shopping patterns

 
The ability to know what merchandise has been viewed and ultimately rejected is crucial if traditional retailers want to compete against the likes of Amazon.

Digitally native retailers understand customers’ purchase and shopping habits, because their machine learning models see all the data.

Brick and mortar retailers are far behind in understanding customers' shopping patterns.

Gesture recognition can arm retailers with predictive power.

By analyzing customer data created by interpreting human gestures using mathematical algorithms, retailers can discover which customers are most likely to buy certain products.

 

Prescriptive intelligence

 
As AI advances, businesses will shift from gathering predictive data to prescriptive intelligence.

Once retailers understand why customers buy a product — or why they do not — the next step is to gather intelligence so marketers can illustrate the reasons why shoppers should buy a product.

 

Sales help

 
AI has the potential to amplify and augment retailers' creativity, by providing not only necessary data, but also freedom from time-consuming, mundane tasks.

The key for brick and mortars is to employ AI in ways that provide in-store assistance to human retail associates.

For example, AI that is integrated into inventory systems can quickly and accurately answer repetitive questions such as stock requests, store hours and directions.

Sales associates can then focus on helping and closing deals with customers.

Such tasks can accumulate and chip away at salespeople's time, leaving them little time to create customer relationships.

Gesture recognition is no different in terms of its potential to enhance customer service.

Salespeople receive accurate insights quickly, providing them with the opportunity to react appropriately.

"AI assistants" can help provide associates freedom from mundane, routine tasks so associates can work on improving personalized customer experiences.

By making appointments, sifting through and prioritizing email and scheduling various tasks, an AI assistant allows the retail associate to shine in pursuit of customer satisfaction.

DIY retail: The self-service CX debate

 

 

Oh, that elusive "seamless" customer experience.

So many retailers are on the hunt for this.

Often, they look to modern self-service solutions for help.

But the totally automated experience is likely to seldom please every shopper.

And while self-service can be part of the solution, many retailers have learned that customers do not always want or prefer the do-it-yourself model.

 

Reinvesting self-service savings

 

Self-service technology can substantially lower front-line staffing costs.

Shoppers identify Amazon as coming from self-service roots, and consequently do not expect much personal attention at the Amazon Go grocery stores.

But those costs can be reinvested in the business, either in more technology to improve service or product selection, or by further boosting efficiency by training former cashiers and having them function as associates in other service-dominant areas.

Moving some of the customer experience toward automation can help increase the number of customer touchpoints -- thereby increasing revenue of accessories and other items.

Adding an Amazon Go option of fast shopping using an app and sensors might also provide exceptional experience.

 

Different needs for different occasions

 

From the customers’ view, a seamless experience can differ, and depends upon a number of factors.

One factor is shoppers’ goals. Those can change daily.

Not all customers always want to check out the same way, every time.

Someone who is in a rush one day might need assistance during another visit.

Grabbing a snack at a convenience store may be deemed “frictionless” if selection was good and service speedy.

But when selecting shoes at a department store, a high level of personal attention may be desired to ensure a “frictionless” experience.

Sometimes more associate help, rather than less, can provide a smoother transaction.

However, traditional brick and mortars need to provide customer service in the most valuable ways, which might not be at the cash register, but on the floor and in the aisles instead.

 

Best of both worlds

 
Providing cashiers as well as self-service not only lets customer choose how they pay, but also frees up some associates — who might otherwise be manning a till — to assist customers needing help.

The best experience is the one that seems personally tailored on an as-needed basis, rather than one that is designed to fit everyone, all the time.

 

 

Omnichannel: The “new” brick & mortar concept

 

 

The face of Main Street stores has changed significantly during the last 20 years.

Bookstores have been replaced by nail salons, clothing shops are now restaurants and flower shops have made way for pet groomers.

Those are the types of services you can't buy online, and they're finding brick-and-mortar success.

They are taking back Main Street, breathing life back into the vacant store fronts.

And adding to this new look for downtown are traditional retailers that are using omnichannel to open successful businesses.

 

VIP Click and Collect

 

Take Nordstrom.

The venerable, high-fashion store has debuted "Nordstrom Local."

Nordstrom Local doesn't need a huge footprint, and doesn't carry much inventory.

But it’s a way for shoppers to buy online, pick up in store but also enjoy other amenities that are afforded the VIP shopper.

Today's fashionistas often order online, motivated by styles presented on social networking sites such as Instagram.

A customer places her order online, then heads to Nordstrom Local to pick up her merchandise instead of taking advantage of free shipping.

Why? To enjoy a manicure while sipping a smoothie and getting the inside scoop on the season's hottest collection from the friendly, professional associate.

Sure, curbside pickup is a popular option for those on-the-go, but those pedicure stations also have their place.

Those are the competitive differences that will make Nordstrom's top-of-mind for their next purchases.

It's Click & Collect, taken to new heights. It's that type of something extra that drive customers into the store.

This is the next level of omnichannel, in which the channel used for purchase is irrelevant.

 

Compare that to Amazon 4-Star

 

These days, fewer clothing stores have a presence on Main Street, with the exception of pricey boutiques that offer unique products unlikely to be found on Amazon.

Conversely, Amazon 4-Star carries a curated selection of product that caters to a local area.

This is almost the exact opposite of Nordstrom's model, yet it is also very similar.

Both retailers are trying to cultivate a customer base that enjoys shopping online, but is missing human interaction.

While Amazon attempts to capture "discovery" shoppers, Nordstrom targets the efficient-with-benefits shopper.

And both are offering their clientele an experience tailored to their interests, which align with the shoppers in that demographic.

 

A personalized approach

 

Retailers today need to entice shoppers out of their homes and into the stores.

Just a few years ago, brick and mortar were written off as a dying breed, suitable only for "showrooming."

Slowly but surely, brick and mortar shops are finding secure footing back on Main Street.

Not all the old names will make it back, and some are gone for good, because they just couldn't reinvent themselves or their customer experience fast enough.

But physical locations are a vital part of the omnichannel, offering a more personalized approach than any pure ecommerce retailer ever could.

Just ask Amazon.