Customer Experience is Brick-and-Mortar Retailers’ Secret Weapon Against the Online Marketplace

With all the news about Amazon, Wal-Mart, and the other retail giants competing to win the online shopping war, you may believe that the smaller, traditional brick-and-mortar retailers have no future.

Except consumer behavior studies demonstrate that this idea is far from the truth.

According to research from Euclid Analytics, “More than 90% of smartphone owners visit brick-and-mortar stores at least once a week, and 67% shop in-store because they like to see, hold, and try on products before buying.”

Additionally, Gen Z — the new and future shopping generation — absolutely prefers to shop in stores versus online.

The ongoing challenge for retailers is competing with the online marketplace on convenience, variety, and prices. Some traditional retailers have even opened “storefronts” on Amazon, hoping a presence on the e-commerce giant’s site will increase sales.

Unfortunately, many businesses find that the cost and requirements of Amazon’s Marketplace brings greater sales — but at profit reductions that make the practice unsustainable.

Competing online may or may not be the correct strategy for your business. But, as Sun Tzu warned in The Art of War, “Whoever is second in the field and has to hasten to battle will arrive exhausted.” And let’s face it, at this point Amazon has, for the moment, taken the field.

The often-overlooked answer to beating the online competition might not be through better pricing or even an online presence. It may come down to outsmarting e-commerce through modernization of customer experience…especially for Gen Z.

Gen Z already commands a large percentage of consumer buying dollars, and by next year it is estimated that they will represent 40% of all the dollars spent.

But here is the really important part for traditional retailers. Gen Z prefers brick-and-mortar shopping. They like the experience, they like the interaction, and they like to touch, hold, and try the items they purchase.

And on those three critical fronts — brick-and-mortar retail has a decisive advantage over online stores. It’s a battlefield at which they have not yet arrived.

Consider these three survey facts about Gen Z:

  • 98% like going into a store to find what they need.
  • 28% are likely to ask a store associate for advice — significantly
  • greater than the 21% average across all demographics.
  • 47% are likely to compare prices, compared to the higher rates of millennials (49%) and baby boomers (51%).

Novelty, Experience, and Quality

Certainly for Gen Z, it is not all about price. They thrive on the experience and are willing to pay a little more for it. It’s not a new concept.

Who doesn’t feel a little more “hip” buying coffee at Starbucks? Who can deny that a trip down Disney World’s Main Street absolutely primes you to buy a T-shirt or mouse ears? Who hasn’t been dazzled by all the glass and crystal in a Swarovski? And even with all its ups and downs, Barnes & Noble is a rush of dopamine for any book lover…even those who prefer e-books.

Yours may not be a hip, iconic, or luxury business but Gen Z — like most generations — still prefers quality. The two things online shopping has taught us is that “all that glitters is not gold,” and you do, in fact, “get what you pay for.”

By highlighting our products’ value, by ensuring the experience is positive, and by giving shoppers a place to touch, feel, and try the merchandise, traditional retailers can capitalize on a battlefield online retailers may never reach.

But — and here is the critical part of the strategy — to deliver this experience, retailers need to leverage their most important tool.

Real and Knowledgeable People

That small uptick in asking a store associate for advice is the keystone to victory. Gen Z wants to interact with employees. Store associates are a key component of the “experience.”

Additionally, a survey by BazaarVoice found that 63% of Gen Z prefers the advertising endorsement of real people over celebrities. That means that your associate’s knowledge, advice, and product endorsements carry more weight than an expensive celebrity ad.

Of course, it also means that how much your employees know about the merchandise, how well they can demonstrate its value, and how attentive and friendly they are become the key success metrics to delivering the desired customer experience.

Is There an App for That?

Research about Gen Z demonstrates an interesting trend in technology. The cold, solitary universe of tech isn’t replacing the warmth of the consumer in-store experience. Instead, it is augmenting it for the next generation of shoppers. That is, technology plus people equals the desired experience.

And again, this can be a battle won by brick-and-mortar retailers because a “Chat Button” cannot ultimately compete with a friendly in-person face.

But having a website alone won’t be enough.

Gen Z still wants the ability to select from a variety of styles, colors, sizes, and options. No one wants to find the perfect item and then find out it’s not available in their choice of color or size. So the in-store experience must be augmented by technology that lets the shopper browse online options through an easy-to-access app.

In fact, it’s even better if associates can help the shopper browse for their exact item, order it immediately in-store, and maybe even have it delivered the next day to their home. The point is, if associates say, “We don’t have it, just go home and order from the website,” chances are the shopper will find something else in the next store, decide they don’t want it, or find an online store that offers lower prices and free shipping.

All this Tech and I’m Standing in Line

No one likes waiting in line. A long line at the checkout often means lost sales. Gen Z reports that they especially hate waiting in line to make a purchase. The solution is to combine technology with people.

Certainly there are security issues to address, but providing the ability to purchase in-store goods directly through a smartphone app or ensuring associates have tablets to process a purchase anywhere in the store is a way to add speed and convenience to the traditional go-to-the-cashier model.

Re-aligning the Battlefield

Sun Tzu advised that to win a battle you must “march swiftly to places where you are not expected.” Most retailers, even the largest, admit they were late to the online marketplace battlefield.

That, as many retailers are showing, does not mean the battle is lost if we can march swiftly to those unexpected places.

By capitalizing on human resources, by enhancing the experience of shoppers, and by implementing technology, brick-and-mortar retailers can realign the battlefield. There is little doubt that the retail landscape has changed and that currently it favors online shopping. But that is just one battle.

With the proper strategy, traditional retailers can ensure a strong position in the consumer market and offer experiences outside the reach of electronic storefronts.

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