Collaboration key to customer engagement

Retailer, supplier collaboration key to engagement - By Judy Chang Cody

While the pace of e-commerce growth over the decade has been dramatic, the good news for retailers is that brick-and-mortar purchases continue to represent the vast majority (over 90%) of sales today. So while naysayers may be predicting the demise of the traditional shopping experience, the reality is that the in-person encounter remains highly relevant despite the ubiquity of digital shopping options. That said, there’s no denying the continued encroachment by the seemingly endless digital shopping options, with share grabbing growth nearly four times that for traditional retail. This fact, coupled with the reality of decreased shopping trips and a dramatic reduction in the average number of outlets shopped, translates into a clear mandate for all retailers today: Capture and convert those coveted shoppers who continue to visit your stores. But while winning shoppers on each trip has never been more important, there’s another hidden digital threat that fundamentally challenges a retailer’s ability to engage the shopper and capture her purchases. That threat is digital distraction. The more commonly recognized form of digital distraction is the growing prevalence and acceptance of digital shopping, with instantaneous price comparisons and easy, point-and-click apps and websites all luring customers away. The other, equally challenging form of digital distraction in terms of shopper engagement is the shopper who is distracted with texting, Facebooking and phone calls while concurrently attempting to navigate cluttered and confusing shelves. In an increasingly prevalent culture of continuous multitasking, it has never been more difficult to convert shoppers in-store. The battle for today’s retail dollar requires taming the two different heads of the digital “monster”: competition from e-commerce options, and distraction due to multitasking and inattention. The good news is that the same weapon, when wielded strategically, will address both issues and achieve true shopper engagement.While shopper engagement is not a new idea, the challenges presented in the new “all-digital, all the time” environment point to the need for renewed emphasis on, coupled with a more contemporary critique of, what it takes to truly engage shoppers in-store. The core principles remain the same: organization, navigation, education and inspiration. The benchmark requirements, however, have been raised.

Organization

Logical organization of a category is a fundamental retailing concept. Ensuring that the section is structured in a way that fits with shoppers’ expectations is an obvious goal, yet one that is often debated by retailers and suppliers alike. Furthermore, the added challenge today is that in a highly distracted, multitasking society, deciphering the optimal organizational strategy is proving to be more difficult. As researchers at Stanford confirmed, among those who are high media multi-taskers there is a noticeable decrease in the ability to detect visual patterns. Translated to the retail shelf, this means that, as media and digital multitasking becomes more pervasive, shoppers are likely to have more trouble trying to figure out how a shelf is organized in order to find their desired product. To break through the digital distraction, it is of the utmost importance for shelf organization to be completely intuitive to the shopper, driven by her needs and assumptions rather than relying exclusively on the more traditional brand or product segmentation.

Navigation

As the number of items in most categories have proliferated, the ability to navigate a shelf set in order to find the desired product has decreased. Worse yet, the trend toward subsegmentation — e.g., no longer just general pain, but now arthritis versus headache versus heart health, etc. — has added to the navigational complexity. The most common solution to this issue has been to install signage to help guide the shopper, although the return on investment of such a step has often proved to be limited at best. The reality may well be that the same digital distraction challenges have also led to an increase in “inattentional blindness,” a relatively new psychological phenomena that was identified as the adoption of digital technology was starting to explode around the turn of the millennium. In-store, this condition helps to explain why shoppers often fail to see the signage that is in plain sight in front of them. To help avoid this blindness from lack of attention, the navigational guidance must be similarly intuitive and make strategic use of colors, images, icons and lighting in order to break through the distraction in the minds of shoppers.

Education

Beyond the basics of organization and navigation, true shopper engagement should also include an element of education to help facilitate selection, expand usage and, ultimately, drive conversion and market basket. In a digitally distracted environment, well-placed and timely educational materials can be attention grabbing and highly effective in influencing the purchase. And consistent with the other two key principles, having an intuitive and simple solution is critical. Recall the fanfare with which QR codes were launched — terrific in theory with a modern marriage of the digital and brick-and-mortar worlds. Yet the concept failed to spread as anticipated, since it added complexity rather than creating simplicity. Lesson learned, and retailers are now experiencing more success with integrating digital as part of the education solution in more consumer-centric and intuitive ways, such as Macy’s recently expanded shop Beacon program, which will provide personalized messages directly to shoppers while they are in-store.

Inspiration

Similar to education, providing inspiration can be instrumental in engaging and converting shoppers. By creating an emotional connection and visceral reaction, retailers can elevate the experience and, more importantly, connect with their shoppers in a way that online retailers never can. A recent survey by A.T. Kearney confirmed this: 73% of shoppers still prefer the in-store environment because they want the experience. Creating inspiration in-store provides a compelling reason for the shopping trip and enables retailers to differentiate themselves from the far less personal online options. Even better, this level of engagement has been demonstrated to improve the perceptions of not only specific brands, but also the retailers that are able to create connections in this manner. When the core shopper engagement principles are applied with deep consumer insight and a sensitivity to the challenges of digital distractions, the impact can be highly significant. A recent study by Market Performance Group found that, when successfully designed, the transformed and more engaging shopping experience can break through the digital distraction and lead to increased dwell time (up to 20% longer), increased average number of units (10% to 14% more) and increased cross purchasing among different products. Certainly it can be argued that the expense required to fully transform the shopping experience and create meaningful shopper engagement as described above may be cost prohibitive. No doubt the prudent approach would be to implement the strategy in a tiered fashion, gearing the investment toward the highest priority stores that best align with the targeted shoppers. That said, given the importance of finding opportunities to create connections in-store, perhaps it is time to reconsider the relative allocation of brand marketing funds. After all, in the new age of digital ubiquity, where else can a purchase decision be so directly and personally influenced? The time is now for retailers and suppliers to work together collaboratively to win the battle for the shopper and the purchase, with a carefully designed experience that more fully engages in-store.