Employees in stores have historically been focused almost
entirely on sealing the deal because the retail model has been based around how
much can be sold via the physical outlet.
Far too much of this in-store.
But this is not the future. For shops to be successful tomorrow
there needs to be a radical change of mindset in how they operate and how the
people working in them interact with customers.
They should no longer be solely concerned with gaining a
sale for themselves and their store but should instead focus on the ‘brand’
getting the sale - whether that be online or across any other channel. In-store
employees have to sell the retail brand irrespective of channel.
This is a big shift in thinking and undoubtedly
represents a major challenge for established retailers. When Egremont worked
with N. Brown to help it open its first high street shops - operating under the
Simply Be and Jacamo brands - there was some early concern that the stores were
not delivering a break-even level of sales.
But it was soon found that within the catchment areas of
these stores there was a rise in the level of online sales for those brands.
The new units had created a 'halo effect' and this clearly supported the
argument for delivering a brand experience in-store rather than simply driving
the sale in that unit.
N. Brown is not alone among online-only merchants to look
to opening physical stores. The likes of eBay, Moo.com and Google Chrome are
among many experimenting with units on the high street.
Despite numerous merchants having fallen by the wayside
there are still many reasons to go to the high street - from touching and
tasting goods, to the immediacy and exploration involved, as well as the social
aspects.
Let's not forget the fact that the conversion rate
in-store can be as high as 50% whereas online we are talking about the miserly
level of nearer 3%. This is not to say both these numbers won't change over
time.
This all points to the fact that although digital is now
a way of life there remains a place for high street stores in the retail mix.
But for them to be effective they have to deliver a sufficiently powerful customer
experience, creating the WOW factor, not just the melee of racks, rails and
stacks, but an experience which says everything about the brand.
Simply Be: the new face of stores.
In fact it is fair to say that unless retailers address
the issue of online customers presently getting a much ‘richer picture’ of their
products than those in-store then the store conversion rates will deteriorate.
In the early days of the internet the argument went that
the one advantage the store had over online was its richer experience. This is
not so today because tablet penetration is exploding, rich online media is
flourishing, and product reviews are now commonplace.
The store has to now compete with this by giving shoppers
just as much visibility of products and services. This involves creating a
greater connection between online and stores, and driving sales across the
various channels, which requires multi-channel integration.
But the risk here is that it brings greater complexity
and so the aim has to be to keep it simple. Undoubtedly, today's digital-savvy
customer wants simplicity so driving out operational complexity should be an
imperative for all retailers.
To help this process, operating models need to be
revised. Retailers have traditionally been reasonably proficient with
short-term tactical cost reductions, but this is increasingly impinging negatively
on the stores' ability to deliver the necessary brand experience.
Unless retailers become channel agnostic and have genuine
customer champions at the board level then the risk is that they will fail to
meet the seismic opportunities that digital now presents.
Sponsored column
by Sarah Wilson, retail specialist at consultancy Egremont Group
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