Jamie Barnfield, Senior Sales Director, IDIS Europe
Soaring inflation and slow growth, supply chain shortages, and a cost-of-living crisis - amid a news cycle of conflict and geo-political tensions - should spell bad news for brick-and-mortar retail.
But there are some positives to hold onto. Against a backdrop of doom and gloom consumers tend to seek feel-good and positive experiences. And some analysts are reporting that smaller, independent, retailers are holding onto increased sales from consumers who got into the habit of shopping locally during lockdowns.
Retailers are also upping their competitiveness by building on a joined-up approach combining online and offline channels, and improving that all-important customer journey and Return-on-Experience (ROX) and Customer Experience (CX) KPIs.
The latest retail sales figures are revealing. According to the Office for National Statistics (ONS), while online sales volumes are still well up on pre-pandemic figures, there is downward pressure: significant declines in March (down 7.9%) followed a similar drop in February.
This shouldn’t come as a surprise. While online retailers might offer convenience and have the advantage of vast quantities of data which can be used to target shoppers with offers and recommendations, they cannot offer a personalized or authentic experience. And the tiniest amount of friction can turn customers off instantly. With multiple online retailers competing on price over the same products, there is often little loyalty.
Major ecommerce firms have tried to lock customers in with subscription services. But rising energy costs and supply chain disruptions are already having a knock-on effect, with more online retailers failing on those next day delivery promises or introducing minimum order values.
By contrast, consumer attachment to bricks and mortar was evident as soon as the economy reopened. Fashion sales spiked as shoppers went back into stores – for example, to try clothes on instead of ordering multiple sizes and dealing with the hassle of managing and shipping returns.
And for many shoppers there’s no replacement to a trip to a store where a knowledgeable and helpful assistant can help with various brands and offers. Finding those perfect fit jeans or a beautifully cut suit, and breezing through the checkout process with a smile, feels good. And it feels good at a time we’re all far more aware of the importance of mental wellbeing and self-care. So, retailers have an opportunity to build on that.
Those that don’t, and fail to provide a feel-good experience, are throwing away a potential advantage. To stay competitive and keep customers coming back, ensuring good customer service, and bringing something new to the in-store experience is no longer a question of choice, but a matter of survival.
That ‘something new’ could be a revamped store layout, a well-positioned display, a great product or deal, or a new area where customers can interact with goods. Or it could be adding a social media component that encourages photos and selfies. Or making sure there’s attractive seating outside changing rooms for spouses, partners, and friends.
If the aim is to build customer loyalty, one of the keys is better intelligence. Retailers need clear domain awareness around in-store activity, customer movements, responses and reactions to their environment, and their overall experience.
The holy grail of omnichannel experiences is where in-store staff facilitate shopping journeys tailored for each customer. If stock or a size is not available in-store, staff can be trained to assist customers in shipping goods directly to their house, organizing a curbsides click-and-collect or an in-store pick up. It’s about making sure staff are there to support customers no matter how they want to do their shopping.
To upskill staff, and uplevel relationships with customers, retailers will need to change the way they think about measuring and rewarding their people. There’s little point in head offices having KPIs that aren’t understood or reflected on the shop floor.
Many retailers have already recognized the vital role that customer-facing colleagues play and have raised both pay and working conditions. The more forward-thinking are also sharing KPIs down to the shop floor to allow everyone in the team to understand overarching business and sales strategies. The idea is that this will support them in creating those feel-good experiences, retain customers, and ultimately increase sales.
Doing that well also includes empowering store managers and team leaders with at-a-glance actionable intelligence using the well-tailored video technology that is now available.
The security cameras that are ubiquitous across retail now have a dual purpose, thanks to the deep learning software that allows cameras in standard positions – not just top-of-head – to perform meaningful analytics. AI analytics have advanced to the point where stores no longer need to install dedicated cameras to gather intelligence.
People counting allows managers as well as head offices to examine patterns of activity by time, day, month, and year. Gaining a branch-by-branch understanding, they can better target merchandising and plan staffing levels more reliably.
Heatmapping tools reveal customer dwell time, and show how shoppers move around stores, allowing displays to be improved and ‘dead zones’ to be made better use of (perhaps with those selfie areas), or seating to be improved to keep partners happy.
Analytics allow automated real-time queue monitoring, so that staff can be more quickly deployed to where they are most needed, such as check-outs, returns desks and click-and-collect.
And social distancing tools can highlight patterns of times and days where areas frequently become overcrowded, in a way that might detract from the shopping experience. And, post-pandemic, health and safety will remain top of mind, especially for older and more vulnerable shoppers. So that means staying on top of cleanliness, and creating layouts that don’t cause pinch points or congested spaces or aisles.
Finally, surveillance footage itself can provide a useful training tool, highlighting examples of where customers have been left waiting too long for advice, where they left the store because they didn’t get help searching for products, or put-off browsing by too much staff attention. These videos can be highly effective for staff training, and of course easy e redaction tools that can blur faces and anonymize individuals means that staff and customer privacy is always protected.
Giving retailers the best chance of weathering the tough times to come, all these video tools are helping to create a better experience for customers, and they are empowering the staff who are at the heart of every store. And despite the fact that they are now more powerful and effective than ever, they have become affordable for even smaller stores and branches.