Omnichannel has been on the retail business agenda for years, but physical experiences are still as important as ever, with retailers continually looking for new ways to attract and retain customers. Technology receives the most significant investment, with established high street brands such as Next, upping investment by 25 per cent in online and digital to £50m, and 85 per cent of retail CEOs investing in mobile applications to improve the customer experience.
But, rushing to abandon any physical store presence isn’t the answer according to a new report from VMware, stating that customers still value simple, easy ways to shop over an all-in digital approach, with almost half of consumers surveyed stating that they still prefer to shop in-store.
Does this mean that retailers digital investments are wasted? Definitely not - one in four respondents to a different VMware survey were happy to accept below average customer experiences from retailers trying out new tech solutions to improve services. But this probably shouldn’t be used as a green light to experiment with interactive apps or digital experiences. Instead, it’s an opportunity for retailers to continually review how they engage with customers. So how do you connect with an audience that’s less concerned with how that’s achieved?
Engaging with customers
Whilst deciding how best to connect with customers, it’s important to step back and consider what’s behind this drive for digital. Most retailers and indeed businesses generally, talk about the importance of ‘connecting’ with customers. Whilst the focus is an improved customer experience, what does a positive, or improved experience mean when it comes to shopping?
According to Clicks and Mortar – the fight for the future of retail, it’s all about simple, easy ways to shop, with transparent stock levels, delivery choices, and easy returns. In fact, clear stock visibility (38 per cent), simple returns (30 per cent) and one-hour delivery (29 per cent) were all rated as more important investment areas than interactive apps (17 per cent) and entertaining in-store experiences such as augmented and virtual reality (7 per cent).
Top online retailers like Amazon are already answering this need for fast delivery, simple returns and immediate stock visibility. But increasingly what customers are asking for is for the online experience to be more of a complete retail experience – when shopping in-store, via social or at a pop-up – rather than something they only get when using their smartphone.
The idea of bringing online practices into bricks and mortar is nothing new in the quest to compete with savvy new competitors. The difference now is that we have the right technology and resilient infrastructure to deliver these innovations. Retailers must prioritise those investments that contribute to the overall customer experience in store – adding value but with an eye for future.
But what of the future? Despite the negative headlines, high street stores remain the most popular way of shopping. This is reflected in average spend, with these shoppers spending on average £197.80 as compared to online buyers, who spend on average £167.30.
And, even though customers aren’t demanding innovation right now, this won’t always be the case. Traditional retailers must be more responsive to the needs of Millennials and Gen Z as they become more influential and increase their spending power. Thus any technology investment must be future-proofed, even though its full capabilities may not be realised immediately. Our research found that UK consumers don’t fully understand emerging technologies. But, as knowledge improves, so too will consumer acceptance of new ways of shopping.
Offering the right channels
There are several steps retailers must take to ensure success:
- Top of the list is knowing what experience the retailer’s prices dictate. It’s still the deciding factor for the majority (70 per cent) of shoppers. Customers shopping at a budget retailer will accept a no-frills approach, whereas interaction expectations increase at a more expensive store.
- Empowering both employees and customers is important, with knowledgeable employees better able to support customers. Often, being unable to provide the right information comes down to a lack of system availability rather than employee attitude.
- Offering the channels customers are happy using rather than those retailers think they want. It’s important to understand which channels deliver revenue and invest accordingly.
- Retailers have a duty to protect customer data and consumers are increasingly aware of the power of data and their rights to privacy and security. As retailers become increasingly digital, so too does the risk of data breach. Only those companies demonstrating responsibility when it comes to using and securing data responsibly will survive.
Capitalising on emerging trends
Whether an established high street presence, a challenger brand or a digital-only disruptor, retailers must be implementing and investing in technology today - capitalising on emerging trends while delivering the experience consumers demand. Without this future-proof foundation, they will struggle to meet even the most basic expectations.
Jordi Ferrer, Vice President and General Manager for UK&I, VMware
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