A Review of the Aberdeen Group Report: “The Automated and Connected Store”

by Marge Laney

“The Aberdeen Group, a Harte-Hanks Company (NYSE: HHS), surveyed 138 retailers (between October and November 2009) to reveal that the foremost business pressures prompting a renewed focus on in-store experience include dynamic nature of customer buying preferences due to current market uncertainties (40%), and growth in sales channel preferences (40%).” – Alpha Trade Marketing, Dec 8, 2009 http://bit.ly/8MDTQ5

The report, “The Automated and Connected Store: Next Generation Shopping Experience,” clearly states the case for Retail 3.0.  I think the current recession has accelerated the need, but it is the internet that created it. The 3.0 internet experience gives the customer full control of their access to the product and information available at a given retailers website. The retailer, on the other side, has full visibility of their customers as they navigate through products, payment, and fulfillment. They can warehouse this data and use it to build meaningful “after the sale” programs that build repeat visits and brand loyalty.

Brick-and-mortar is stuck on Retail 1.0. Customer facing technology that supports the in-store experience is practically non-existent in apparel retail, which is my focus.  Self-service kiosks that support an in-store internet experience miss the point.  Consumers choose brick-and-mortar experiences for many reasons not the least of which is personal interaction.  If they wanted an internet experience, they would have stayed home.

Technology platforms that give customers access to “during the sale” personal service, give the sales associates visibility and control of conversion areas, and provide management with meaningful BI from which they can measure, analyze, and control the in-store experience in real-time are what is needed to improve not only the in-store experience but the KPI’s as well.

Full Disclosure: My company sells a tech platform that enables the 3.0 experience in the fitting room which is the highest conversion area for the brick-and-mortar apparel retailer.

© Alert Technologies, Inc. 2009

A Fitting Room Customer Is a Terrible Thing to Waste

by Marge Laney

Last week, I was training a group of managers at a large chain retailer to use our fitting room service system we had just installed when one of them asked, “This makes it so much easier for us and better for our customers. Why isn’t this system everywhere?” This isn’t the first time I’ve been asked this question, and it always makes me cringe a little bit. And although our customer list includes some pretty impressive retailers, it’s the one question that bothers me because way back in 1995 when we launched I thought the system would become ubiquitous.

What I’ve learned over the years is that this system is not for every retailer with fitting rooms.  This system requires a firm commitment to fitting room customer service backed up by a well defined, well executed, and well monitored fitting room service strategy.  Break room posters, marketing slogans, and corporate memos espousing commitment to great service don’t cut it here; I’m talking a top to bottom “how to” strategy for servicing the fitting room customer.  So that knocks plenty of retailers out right there.

For those that are good candidates for the system, some will argue that they don’t need service technology because the sales associates are always right there in the fitting room.  I’m not exactly sure what that means or how just being “right there” solves the connection problem because there’s still a whole row of closed doors between the customers and the associates. They fail to see that the problem is not the sales associate’s ability to access the customer in the fitting room; they can knock on the fitting room door anytime! The problem is the customer’s inability to access the sales associate when they need something, a very big difference! Think about it, when you’re in most fitting rooms you can connect with a friend in another city on your cell phone faster than you can connect with a sales associate ten feet away!

A customer in the fitting room should be given every opportunity to access a sales associate easily because they constitute the best opportunity for a sale. There are only two reasons customers enter fitting rooms; to make a buying decision, or steal something. With sales associates in and out of the fitting room area connecting with customers and answering service requests this increases the likelihood that customers will buy and decreases theft. But when you require your customers to schlep in and out of the fitting room servicing themselves, you run the risk that they will get discouraged and leave rather than take the time to find what they like. It’s just bad business to leave customers with no easy way to connect.

Our solution is inexpensive, simple to use, and convenient for both the sales associate and the customer. It also provides important data, including individual fitting room load and visit data that when viewed as a subset of store traffic gives insight into service strategy execution. Monitoring load metrics gives feedback on how successful each store is in reaching load goals which tie directly to conversion.

So why isn’t this system everywhere? Why indeed. Why is it so hard to convince corporate management that it is not a good idea to lock fitting rooms without giving customers an easy way to connect with a sales associate to open one?  Or to let customers wander into a fitting room unattended and not give them a way to connect with the sales associates when they need something?  Or my personal favorite; arm the sales associates with a great service strategy and require that they become mind readers and door knockers to figure out when their fitting room customers need something! The Bottom line; the customer is trying to buy why make it difficult?

 

© Alert Technologies, Inc. 2009

Holiday ’09… Will You Just Survive or Thrive?

by Marge Laney 

As a news junkie, blogger, tweeter, and purveyor of retail customer service technology I view the retail industry from several vantage points.  Usually, there is a common thread that runs through all news and commentary about our industry with a twist here or an opinion there but most are supported by cold hard facts.  This latest period of time, however, which seems like the past year or so, there is a different vibe running through the media and commentary which appears to depend on what agenda is being promoted, and the facts massaged to prove points. This agenda driven dialogue has been harmful and weighs on the consumer making them feel confused, nervous, and as a by-product unwilling to spend their money freely.

On one side of the commentary the news is very bad and our lot is not likely to improve much in the foreseeable future and will, in fact, probably get worse.  On the other side is the argument that things are getting better and the economy is going to take off like a rocket at any moment.  Mixed into all of this are pretty anemic economic data and high unemployment, but on the flip side a stock market that appears to be trying to gin up a bull run. All of this turmoil has conspired to put the consumer on edge and paralyze retailers.

And that brings us to Holiday ’09.  It has been opined that the consumer has had it and is ready to splurge.  To throw caution to the wind and spend, spend, spend. Others wave statistics that point to the exact opposite scenario.  But some say, no matter what the consumer appetite is for spending, don’t expect them to want anything but essentials and basics and they will only buy if the discounts are deep.  Others think that the consumer has all the basics and is looking for trendy, exciting product and will pay the price if they perceive the value.  Luxury is out in some camps, but it’s in, in others.  Discounters will save the day some say, while others see the mid-tier and upscale retailers being the winners if they can entice the customer with a convincing value proposition and a great customer experience.  Online is the only way, some say, to save gas and sales tax, while the in-store experience is what will make the difference between winning and losing for others.

How will the retailer react to all of this confusion? For the most part it seems like they are going to just play it safe, and can we really blame them?  Inventories are being cut and payroll slashed.  I did hear today that the profit end of things will probably be the bright spot as with so little on the shelves markdowns will be very limited.  Selections will be limited, color pallets safe, and self service will truly be the only customer service.  Blah Humbug!

In the final analysis, however, there will be a few retailers who will have tuned out the conflicting news and opinions and looked instead to their customers for direction. They will have set aside the analyst’s estimates and the pundit’s predictions.  They will have dusted off and pored over their customer comment cards, secret shops, and customer experience surveys.  They will have analyzed, talked, and most important listened to their customers that frequent their stores on a daily basis, and from this they will base their holiday plan on what their customers are telling them they really want.  If their customers tell them to stack it deep and sell it cheap, they will.  If their customers tell them they want trendy fashion forward styles served up with great customer service, they will chose the right product and staff their stores to service their customers well.  It will take a strong will and a lot of Pepto to run against the tide, but in the end those that listened to their customers will win and win big and not just survive, but thrive.

© Alert Technologies, Inc. 2009

Give Your Customers the Confidence to Buy

by Marge Laney

The consumer has been beaten down and is not in a great mood.  Unemployment is at a 30 year high, and experts say the recovery is going to at least start out as a jobless recovery.  The US economy is driven by consumer spending and the consumer is not in the mood to spend.  Not a good scenario for a quick retail recovery.

Traffic is slow and what’s left of marketing efforts due to budget cuts are hard pressed to lure the list carrying, discount seeking shopper into your stores.  The challenge for retail in this environment is to make the most of the people who do come through the door.  Your store personnel have no control over the number of people that come into your stores, but they have total control of the experience each customer has once they’re inside. It is in this experience where your associates can give each customer the confidence to buy.

The worst thing you as a retailer can do in the current environment is ignore the customers who have taken the time to come into your store.  Leaving them to fend for themselves to locate products, or figure out on their own if a certain product is right for them can leave the customer feeling disrespected and uncared for.  These types of interactions definitely do not build loyalty!  Creating the confidence to buy is about making connections with each customer that builds trust.  That doesn’t mean just greeting them when they walk in or asking them if they found everything they needed when they are checking out.  It’s about being available when they have questions, providing information that helps them decide, and making them feel confident and good about buying in general and from you in particular.

The challenge is to have enough well trained associates to make the connections to create this confidence to buy in each customer that comes through your doors.  Today’s lean payroll environment has put extra pressure on already thin staffing models.  A retailers dream is to have each customer experience one-on-one service throughout their entire shopping trip.  But, retailers confuse personal service with one-on-one service.  This is not only impossible; it is unnecessary and annoying to most people.  Customers want to control the sales associate’s access to them.  Did I mention that the customer is time-stressed too?  When they want service they want it now!

Creating the confidence to buy means being there when your customer needs something.  This is where giving the customer control of their service relationship through service access technology can help.  The customer interacts with the service technology and requests help when they need something, not when your associates think they need it. Sales associates are more effective and happier too, because they are interacting and helping customers who want and need their help!

So, in your next conversations about customer service, talk about helping your associates create the confidence to buy in your customers and make sure you give them the technology tools they need to make it happen.

© Alert Technologies, Inc. 2009 

Big Retail Needs to Think Small

 by Marge Laney

If you’re a student of retail as I am, you must notice most retailers talking out both sides of their mouths these days.  On one side is the constant yammering and hand wringing about the importance of the customer experience.  2009 was heralded as the “Year of the Existing Customer”, in other words; take care of the customers you’ve got because if you’re not taking care of them someone else will…gladly. On the other side there is a constant drumbeat of cutting costs, and in brick and mortar that means payroll.  Actions speak louder than words and the winner in this race for attention and budget is; cutting payroll, aka, lean payroll optimization…. in softer, gentler retail speak.  

What about the customer, what do they want?  Customers, when asked, say that they want to be able to quickly access knowledgeable and friendly service when they want it. The question is; can the customer be served the way they want to be served in a lean payroll environment?  These two points of view at first glance seem to be at odds with each other and suggest their inability to co-exist in the same strategy. 

Many retail customer service strategies are high touch and focus on the sales associate breaking through barriers and engaging the customer in a meaningful way.  These strategies involve following the customer around asking open ended questions and trying to anticipate the customers’ wants and needs.  These strategies are often very involved and encourage the associate to delve deep to establish an emotional connection with the customer.  The trouble though is that these strategies in the hands of the typical large chain sales associate are either executed poorly or not at all.

These high touch strategies are in fact an attempt by the large chain retailer to act small.  Many aspirational apparel retailers want that proprietor feel that small shops and very high end retailers can achieve, especially in the fitting room.  But, that’s just not possible.  Sole proprietors and high end retailers are emotionally and economically vested in each of their customers.  It’s a great thing to aspire to, but with high turnover, little incentive, etc. even the best chains are really fighting an uphill battle. 

The best way to achieve “acting small” for the large chain apparel retailer is to give the customer a way to access the service the sales associates have been trained to give when they want it.  This means giving the customer control of their service connections.  Instead of depending on the sales associate to be motivated to engage the customer, let the customer initiate and control the engagement.  This raises the level of service for every customer and gives the associates the option of being a call answerer or a sales superstar; but the good news is that customer will never again be ignored.

Seems like a simple solution but many retailers are resistant to access technology. Why?  First, they see this as a detriment rather than an enhancer of their personal service strategy.  They are fearful that their associates will become dependent on it. In my opinion, access technology can help them “act small” and service customers personally by setting a level of service availability that they cannot fall below.  At its lowest level it makes the worst associate a call answerer and may save the sale.  At its highest level it gives great associates a way to stack and service multiple customers simultaneously.  In the current lean payroll two coverage scenarios being played out in most apparel chain retail today, it just makes sense.

© Alert Technologies, Inc. 2009

The Importance of Fitting Rooms

 by Marge Laney

What is the most important conversion area in apparel retail?  Answer: The Fitting Room.  What area in brick and mortar apparel is the least serviced?  Answer: The Fitting Room. 

Why?

The “why” of the first question is inherent in the fact that if a customer uses a fitting room they are 71% more likely to buy than if they simply browse the sales floor.  Add to that the fact that the customer who uses the fitting room will on average buy twice what the browser buys.  And, if they are serviced while in the fitting room they will buy almost three times what the browser buys. Those are some pretty compelling statistics!  And, by the way, there is only a 28% chance that the browser will buy anything.  And we’re not going to even talk about what browsers buy and then return because of fit issues.

So that leaves the “why” of the second fact.  Why is the fitting room area so underserviced?  First of all, many retailers will say that that just simply is not true.  They have created elaborate fitting room service strategies aimed at all the right targets: improved customer experience, increased conversion, increased ADS, and UPT’s.  Other retailers seem to be oblivious of the importance of the fitting room and view it instead as a necessary evil and a loss prevention nightmare.  They view all customers as potential thieves and run their fitting rooms accordingly.

The customer, however, views it from a very different perspective.  Their fitting room experience begins and ends from inside the fitting room walls.  That experience can run the gamut from a very luxurious and pampered experience to an experience that is demeaning and filthy.  But, no matter where the retailer falls on the continuum, one thing is true in most fitting rooms: the customer has no hassle-free dignified way to contact and connect with the sales associate once they are inside.

Let’s first look at the retailer that has a great service strategy for the fitting room.  They have trained their associates to drive traffic to the fitting room, they have weekly wardrobing classes that train associates to help their customer find the right outfit for any occasion, and they have created talking points to help associates establish a connection with the shopper and to bring out their shopping needs and desires.  But, once inside the fitting room that connection is lost.  To connect again requires the associate to knock on the door hopefully at the moment the customer is in need of service.  Hope, in this case, is a lousy strategy.

I often hear from retailers that they view access technology as a barrier to personalized service.  I simply don’t understand that logic.  Door knocking is less than 2% effective in connecting an associate with the customer when the customer is in need of service, and customers find it annoying!  It is also the first thing that stops happening when the store gets busy.  And the poor customer has less control than the associate!  Other than peeking out the door in hopes of making eye contact with a passing associate, the customer has no way of accessing the service they have been sold and long to experience.  

Another thing I often hear from retailers is “Prove to me that giving the customer access to service from the fitting will help us sell more.”  Here’s a stat for you:  97% of all customers have redressed and left a store without taking the time to find the right size or color of an item they wanted to buy.  No matter what your philosophy on fitting rooms, that statistic is a direct result of lack of customer access to service, and has direct and negative impact on the bottom line.

So the next time you review your fitting room customer service strategy ask yourself this; How will our fitting room customer access our great service once inside the fitting room?  And, can we afford it?

© Alert Technologies, Inc. 2009

“It’s Not My Department” Rewind

by Marge Laney

I just re-read the late Peter Glenn’s book, “It’s Not My Department.”  What a hoot.  The book was written and published in the late ‘80’s, and is a litany of service faux pas and customer apathy.  He called us a “nation of whiners”; that we try to top each other’s horror stories of service, and our national anthem is “It’s Not My Department.” He said that we needed to stop whining and start fighting. He also said, “Service is the hottest subject in business right now, but most of the service is lip service, not customer service.” That was twenty years ago, and it’s still the hottest subject in business right now…

Two things have changed during those twenty years; the infiltration of service technology, and the smiley face.  Lousy service was and still is the service provider’s way of saying No and in the past was emphasized with shrugs, sneers, snips, and snubs.  Today the shrugs, sneers, snips, and snubs have been replaced with the smiley face.  You still get the same lousy service they just smile while they’re saying it and tell you to “have a nice day” when they’re finished.

And while computerized service technology was in its infancy back in the late 80’s and was the cause of a lot of bad service experiences, the bugs have been worked out to a great extent but the service failures still abound.  I just switched from one very large bank to a smaller local bank.  I was tired of being submerged into automated telephone answering hell every time I had a question about a transaction.    I especially hated the cheery voice recognition fellow that attempted to change my mind about what I was looking for.  I often found myself screaming “No, that’s not what I mean, you _______!” into the phone. He always said he was sorry, but I didn’t believe it!

Anyway, I was worried that it might be risky changing to a local bank because I do most of my banking online and although I really like the face to face people connection when I go to the bank, I wondered how this might translate to their online experience.  My worries were justified, but for a surprisingly different reason.  When I called in I actually got a live person.  The problem, however, was that the person on the other end of the phone was a throwback to the 80’s; sneery, snippy, and snubby, all the while telling me “No!”  She did, however, tell me to “Have a nice day”J.  I’d rather talk to a machine.

© Alert Technologies, Inc.