Future of Commerce
For Retailers, Great Service Makes the Brand
In downtown Cincinnati, where I live, there’s a beautiful 140-year-old building that once housed the city’s first department store, John Shillito & Co. Today, it’s being converted to condos, and we’re seeing similar conversions happening at stores and shopping malls across the country.
Stores aren’t going away, but the store of the future is going to be smaller. With more and more people shopping online, we don’t need all of the retail space that we used to. Stores don't need to hold as much inventory or provide as much room for shoppers to walk around. Soft goods—apparel and home furnishings—will make up a lot of the in-store inventory. Those are the things we need to touch and feel.
The surviving stores will need to deliver a higher level of service to give customers a reason to come in. They need to up their brand factor because shopping expectations have changed. Convenience and low prices, and being a company that’s easy to work with, are now mandatory in an age when customers are armed with data from your competitors, who can ship the same products to their home quickly and inexpensively.
That means in-store employees will have to be very knowledgeable about the merchandise in that store, but also ready to help customers understand and effectively access those goods online. And even though a shopper might be walking through your store staring at their mobile phone, you still need to engage them. They could be looking at your own website. Greet the customer, offer help, and if they don't want help, walk away.
Treating the website like it’s part of the “store”
On the flip side, online retailers need to get better at providing the same level of service that you find in a store. Valuable, trustworthy service increases sales.
If you want to reduce online shopping cart abandonment, greeting customers while they’re on your website, like you would in the store, is just as important. That can happen several ways: make your website easy to navigate and use, offer them incentives, show them what other shoppers are buying, provide customer service chat functions. If you engage your customers while they’re engaging with your website, you can find out if they're really interested in buying something.
But, there’s a fine line between good and bad online customer service. Take the chat function, for example. Some retailers are doing this well; some are not. Having an automated chat that makes shoppers wait three or four minutes after they push a button, or answers questions robotically isn’t helpful. That's not quality service; the interaction has to be genuine. There are smart technologies available that aren’t obviously automated and can provide a genuine experience to shoppers by knowing merchandise information. What’s the sleeve length on an extra-large shirt? No problem.
Stores aren’t going away, but the store of the future is going to be smaller.
The logistics behind great service and great brands
Ultimately, the difference-maker for today’s shoppers is convenience and trust—much of which comes down to what’s promised pre-purchase, but happens post-purchase. How quickly can I get the things I want, whether I’m at home, in the store, or on my phone? And if I don’t like it, how easy is it to return with no hassle or extra cost?
Post-purchase success comes down to how well your distribution network is set up to support your various channels—in fact, that’s the key. Customers love to have options: Well, you can buy it in store and ship it home; you can buy it at home and ship it to the store and pick it up there; whatever you want to do. The ability to support a variety of buying options (read: customer service) is underpinned by your network.
A lot of today’s innovations in shipping and logistics aren’t entirely new. If you went Christmas shopping at a major department store thirty years ago, they would offer to gift-wrap and ship your packages right from the store. People have always loved that level of service.
The difference is that, today, you have to move things much faster. And there’s no going back. We used to train our customers to just wait, the thing you want will be on sale soon or, in the early days of eCommerce, that waiting 3-5 business days for your package was normal. There’s no waiting around anymore. Being able to easily price-compare online has shifted wait times—or eliminated them. It’s about getting your shoppers the right merchandise, at the right time, and at the right price.
It’s about getting your shoppers the right merchandise, at the right time, and at the right price.
Right merchandise, right time, right price
Younger generations expect a different customer service approach from retailers. I have grandchildren who are millennials and they shop differently than I do. I don't know how much direct customer service they expect. Some of them don't even want to talk to each other—let alone a sales representative—they want to text with each other. Having grown up with technology, they have higher expectations around buying options, in-store experiences, and the seamless movement across buying channels.
The retail model will continue to change. Will the store ever be dead? No. But, it will be different. Retailing is about getting the right merchandise in front of shoppers at the right time and for the right price. Those principles stand whether you’re in the store or online. But those that can do it well—those that have good, convenient customer service and relay they’re a brand that can be trusted—will be the ones that survive and prosper.
Will the store ever be dead? No.
Tell Us More
What’s one piece of advice you’d give that you’d follow?
Serve consumers, don’t spy on they but remember they are the only reason you are in business.
What’s something we, as an industry, aren’t talking about that we should be?
Convenience has become the highest consumer demand. We must find ways to provide it at manageable costs. Walmart showed over the past 30 years, supply chain and in-stocks are two of the ways it can be done successfully.
What’s a product that you now buy online, but thought you never would?
Apparel and shoes, because of easy no-cost return policies.
What’s a product that you don’t think you’ll ever buy online?
You’re a new addition to a crayon box. What color are you?
Red, because I want to “stand out” and like excitement.
Retailers, Give Your Customers What They Want
Brian Kilcourse, Retail Systems Research LLC
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