Retail Store Operations and Store Design that enhance Multichannel Retail
A customer who has browsed the Apple Inc. website or downloaded any of its apps onto his handheld device is still likely to be floored by a visit to any one of its stores. The predominantly steel, glass and stone structures are a typical embodiment of the Apple brand where customers are encouraged to play with the company’s entire range of products as attentive store staff engage them in conversation and try to understand their technology needs.
Apple has expended tremendous efforts in building each of its 300-plus stores – each of which are artful, innovative and unique structures that reinforce the brand’s overarching design philosophy while offering customers a completely out-of-the-world experience from the moment they walk in through its doors.
Retail Stores: Converting Shopper Behavior to Sales
Today’s customers browse product catalogs, search for information online and make price comparisons on their smartphones. But when it comes to actually making a purchase, most head out to the nearest store. This is a fact that has remained central to shopper behavior in most product categories and has seen little change despite the rapid shifts in the retail world.
Gartner surveys indicate that in 2009, more than 91% of retail revenue came from the store. By 2013, this figure is likely to come down to 87% and further to 84% by 2015. Despite the marginal decline in percentage revenue from store, clearly e-commerce and mobile commerce channels are nowhere near displacing stores as the principal income source for retailers.
For almost all products, with the exception of some categories like music, books and games, customers want the touch and feel experience of products, interaction with store associates for more information and attempts to gain the best use of products.
Store Operations: The Customer Service Hotspot in Multichannel Retail
Customers walking into today’s retail stores are already well-informed about products and prices and come to the store expecting something more than what they have already gained online. They expect to have a superior service experience, more focused interaction with your staff and better engagement with your brand.
Leading retailers are putting in place a variety of ways to continuously upgrade store operations giving attention to stock management, store design and layout, staff management, customer order fulfillment systems, customer experience management and overall store hygiene while focusing attention on ways to delight customers and build lasting relationships with them.
Seamless Distribution and Fulfillment Systems
Increasingly retailers are leveraging cross channel inventory to execute store fulfillment of online orders and directly ship items from warehouses or third party suppliers to customer destinations. Many have established flexible return policies that allow customers to return to stores, goods bought online. Friendly and persuasive staff turns the customer’s return visit into an opportunity for loyalty building and cross selling of other product lines and services.
Best Buy services 40% of all online purchases in-store and Toys R Us recently extended its in-store pick up program to let customers choose a family member or friend to pick up an online order in store. JC Penney and Macy’s carry only a minimum of smaller assortments in store but provide customers with the option of ordering additional sizes, colors and designs through in store kiosks and catalogs. Walmart carries a much wider assortment of products on its website and limits the amount of inventory in its stores.
Advanced fulfillment techniques such as Distributed Order Management (DOM) and Endless Aisle systems are widely in use to support customer-centric order management. DOM systems help you to tie inventory from across different channels, track dynamic inventories that are Available to Promise (ATP) and monitor reservations on in store goods. Endless-aisle systems utilize back-end order management to provide the logic for using the best channel or location to fulfill orders on products that are out of stock by leveraging availability on other channels. Top footwear and fashion retailers use endless-aisle capabilities in their stores so that they can offer customers a breadth of assortments and choices in styles, colors and sizes without actually adding inventory units to their stores.
In-store Solutions and Technologies
Modern POS systems, Wi-Fi and 4G networks are now bread and butter applications that are mandatory in your stores today. But there are an array of advanced in store solutions available now that claim to make your entire store operations smooth and hassle free. But how useful are these in store solutions to your customers?
AT&T and Cabela do not believe in the use of in-store technologies for the sake of it. Many other retail experts too agree that as much as it is neat to have the coolest technologies in store, customers are not getting into their cars and driving out to your store to interface with your in store kiosks or touch screens. They come with an expectation of interacting with your brand, better engaging with your staff and have a shopping experience superior and more personal to what they have already encountered across your other channels.
Gartner research indicates that most customers in a retail store prefer interacting with employees on the shop floor rather than with the retailer’s in-store technologies or his own handheld devices for information and updates.
However, technology can be a powerful tool to empower store staff in building quality interaction with customers in store. Product information kiosks and digital signage at Cabela free staff from routine information tasks and enable them to chat up customers on what they are looking for. Macy’s and Bloomingdale’s use tablets and hand-held devices to help customers explore and select skin care products at Clinique counters and offer a wider choice and selection of product styles and colors not available in store.
Mobile technologies delivered onto handheld devices are helping store managers to be more on the shop floor and less in stock rooms and back-end operations. Wireless solutions are empowering staff to easily pull out information on stock positions, prices and discounts without ever having to leave their customers side.
Coded shelf tags allow consumers to click or scan onto their smartphones and send to retailers for instant information about products. Self-checkout units, digital signage, personal scanners and self-service scales are other in store solutions that put information at the fingertips of customers while empowered store staff gets to spend quality time with them.
Store Layout and Design
For years, customers walking into Target stores anywhere in the world could more or less expect to find things where they looked for, as the retailer was associated with a standard layout. However, recently target has introduced unique multi-level floor plans that aim at bringing flexibility, convenience and greater customer engagement to the store experience. The new layout accommodates sections for fresh produce and beauty, home, shoe and video/electronics departments while focusing on urban spaces and cross channel customers.
Gartner surveys indicate that even in these digitally connected times, most customers prefer to accomplish basic shopping tasks such as searching assortments, finding products, checking prices and looking up offers by walking around the store.
Well-designed spaces and drive-through facilities for picking up products ordered online ensure quick and convenient shopping for customers in your store. Use common color palettes and aesthetics in your store interiors to reinforce your brand’s identity across channels and to create a seamless cross channel experience for customers. Leverage stock management best practices, effective planograms, spacious shelves and clear aisles to enhance the store experience and help customers and store associates to search and find products easily and effortlessly.
Store Staff Management
Your employees and store staff represent the critical last mile in your customer’s interaction with your brand. They have a critical role to play in offering greater value to the well-informed cross channel customers who walk into your stores.
One of the key factors behind the success of Apple’s stores is its extraordinary team of 30,000 plus dedicated staff who are excited about the company’s products and make use of every opportunity to build lasting relationships with potential customers.
Streamline in-store staff schedules so that your stores are prepared to handle the ebbs and flows of peak traffic. Empower and educate store employees with new technologies that help them attend to a wide range of customer requests, more effectively.
Nothing sends out the wrong message to customers as much as disgruntled and dissatisfied staff. Ensure that your store staff is compensated well. Design incentive schemes to motivate and reward employees who successfully convert traffic from other channels in stores.
Improving Store Operations with Analytics
Multichannel and cross channel analytics has a very critical role in helping streamline your assortments, understand your customer needs and work your inventory systems across multiple channels in the most cost effective and synergistic manner possible. Focus on metrics like same store sales, promotional lift, sales and gross margin per square foot, store returns and stock ageing data in store to monitor the efficiency of your supply chain and distribution systems and improve profitability of your store operations.
Build multichannel and cross channel capabilities that allow you to measure the impact of marketing activities in one channel on sales, stocks, customer satisfaction and profits on other channels as well as gain an integrated, 360 degree view of customer behavior across channels.
This kind of analytics capabilities will empower the manger in one of your downtown store to greet a customer by name, offer her new options on the casserole she browsed for that morning and inform her on the special discounts on her favorite brand of bed linen.
Store Operations: Superior Customer Service for Cross-channel Customers
Finally, there is much to be said about giving attention to the small details and making your customer feel special when he is in your store. Play up the personal touches, go the extra mile and build unique shopping experiences around customer in your stores, to ensure repeat visits and long lasting customer loyalty.
Some retailers have built a great deal of publicity into each of their store openings creating blocks and blocks of excitement as customers queue up to be among the first to walk in through their doors.
Leverage in store solutions that can reduce check-in lines and make the shopping experience more meaningful and engaging for your customers. Allocate store space and assign week days for store activities, events, training sessions, technology camps, business talks and youth workshops in your stores.
At a time when the retail industry is moving to increasingly impersonal and digital customer interactions, your stores can be the one way in which you get talking with your customers and keep them coming back for more.