There is a Change Happening in Retail
Whether we like it or not, the retail economy is changing. Some retailers are shutting their doors and letting go of their staff – especially the major chains. Lowes, Walmart, Wet Seal, J.C. Penney, Best Buy and Sears are being hit hard, and retail employees are paying the price.
Growth in E-Commerce
All of this change has been caused by a major shift toward e-commerce. Amazon especially has been dominating the news, really rocking the boat in the retail space. In 2015, Amazon generated ~30% of US retail sales growth, selling over $59 billion worth of product. And for a lot of consumers, Amazon is an easy and quick way to get products. With the one-click purchase button, you can get the product you’re looking for quickly, without even needing to enter your credit card information. You don’t need to talk to anyone, and you can get the product you need within a couple days. You even get free shipping if your are an Amazon Prime member.
What Tactics are Brick-and-Mortars Using to Compete?
Option 1: Match E-Commerce Prices
So, as e-commerce sites like Amazon grow and take up more and more of the market, we ask ourselves – how will brick-and-mortar stores survive? How can these retailers prepare in a way that will allow for them to excel despite this shift in the retail road map?
We see a lot retailers getting creative. Some are looking to price match with Amazon, luring in customers with discounted prices.
This is a great short-term solution. Retailers can get a huge surge in customers and sales. It definitely grabbed the attention of the Krazy Coupon Lady, who has tens of thousands of bargain-hunting followers. However, in the price-match frenzy, these retailers may decrease their margins, and this tactic doesn’t guarantee that shoppers like the Krazy Coupon Lady will become loyal customers for life. They are more likely to just come for the deal, and then move on to the next great deal.
Option 2: Go All-In on E-Commerce
Other retailers such as Macy’s, are expanding their e-commerce efforts, and downsizing their brick-and-mortar presence. It’s a bold move, and definitely shows a major shift is happening in the retail space.
The Real Secret to Brick-and-Mortar Success
Reading up to here, you might think that shifting more toward e-commerce or price matching looks like a great short-term tactic: simply join the trend of the industry, and follow where everyone else is going, right? There is, however, a huge opportunity at stake, when so many other retailers are shifting to be primarily or only online.
Although the news shows that many brick-and-mortar stores are closing their doors, and there is not much opportunity to be had there, there are many stores that are succeeding, despite this e-commerce trend – some of them even expanding! These survivors are flying under the radar without capturing the daily headlines.
One such example is Sephora.
This retailer is famous for their beauty specialists who are ready and willing to help any customer with questions, even if they are only window-shopping. I still remember when I shopped there to find a sunscreen I could wear daily that would blend with my skin type. When I arrived, I didn’t know what to do, and luckily there was a beauty specialist to help. The knowledge of that person and the amount of effort they spent on finding me the right product still stands out to me to this day. From now on, I go to Sephora for most of my beauty needs because, for me, having that great customer experience and working with a knowledgeable employee makes the difference between choosing to shop online versus coming in-person to purchase their products.
Nordstrom is another great example of this principle. While JC Penney and Sears seem to be on their last legs this year, Nordstrom only closed two stores last year. Nordstrom is famous for having impeccable customer service, and for recruiting and training a stellar staff. I have numerous friends who worked there during their high school and college years, and the knowledge and experience they gained are still relevant to their careers. Nordstrom cares about its employees, and its employees love and care for their customers. It is a great company culture that will last, despite this trend toward impersonal e-commerce.
Lastly, Apple transformed what was once before a crappy not-so-fun experience (buying hardware) into a fun, cool, and sleek experience. And it is all thanks to the Genius Bar staff, who provide a great customer experience from start to finish. They are one of the factors that put the awesome into the Apple brand.
So what do these great retailers have in common? What trend do we see with these surviving and growing brick-and-mortar stores? One phrase: great people and great customer service.
One thing is for sure – as more and more human interactions get replaced by technology, human interaction in retail will become more and more valuable.
People still care about buying and shopping in person, there is just a higher bar of customer service expected than before. Associates need to be more helpful, more knowledgeable, and build even more rapport than ever before. Wouldn’t you rather buy a computer from an upbeat, fun, motivated employee at the Apple store?
The answer might be surprising, but in the end, the secret retailers can use to separate themselves from the e-commerce competition is through one factor: people.
And even Amazon knows this secret. Amazon is now actually building a retail brick and mortar empire themselves, going back to square 1 of the original industry they disrupted. According to the Fortune article below, they are in the process of building hundreds of “pop-up” brick and mortar locations. They see the power of human interaction, and providing a great customer-service oriented, knowledgeable associate, who can educate a customer on their products. They know that an in-person experience is not something you can get when visiting Amazon online.
On one of my favorite shows on TV, The Profit, Marcus Lemonis demonstrates this secret over and over: in-person, human interactions coupled with great customer service sets brick-and-mortar apart from online e-commerce. On the show, Marcus Lemonis continues to emphasis that people determine the success or failure of a business.
We also see this theme every day through our Praiseworthy Stories. The relationships that their employees build is the secret that is keeping successful brick-and-mortar retailers growing while other companies flee to e-commerce models.
Brandon is an Example of Retail’s Secret Weapon
At Praiseworthy, one of our favorite real-life customer experience stories is represented by Brandon. Brandon is famous for gaining referrals from countless customers who bring their friends and families back into one of Wireless Zone franchise stores year after year. He is their go-to phone guy, and according to his reviews, it doesn’t get better than working with Brandon.
The keyword from these reviews is in bold and underlined: recommend. Customers are sharing this secret themselves. They not only say that they loved Brandon’s service. But they want to tell everyone they know how “unbelievably awesome” he is.
And Brandon’s photo says it all. Wouldn’t you rather purchase a phone from Brandon, having a stellar customer experience, while making a friend in the process?
Employees like Brandon are the secret that are keeping retailers in business. As long as retailers work to retain, recognize, and cultivate employees like Brandon, they will have a great advantage in weathering the e-commerce boom.
In the end, human connection and human relationships have existed for millions of years. We are human; we are not robots. Whether we like to admit it or not, we love interacting with each other, building relationships, building a connection. It is what completes our lives on a daily basis. E-commerce has only existed for 20 years. By tapping into the base and heart of humanity – the yearning for us to build a connection – retailers can survive this Amazon Apocalypse. They can separate themselves from the competition and become a compliment to e-commerce rather than a competitor.
What do you think? Do you think that employees like Brandon will help Brick and Mortar locations succeed?
P.S. Want to unlock the power of providing an extraordinary customer experience in your business? We would love to show you how Praiseworthy can transform your employee attitudes and provide insight on customer satisfaction. You can find out more and sign up for a demo here.