The Key Challenge for Retail in 2015: An Interview with RSR’s Nikki Baird

Omni-channel has put new focus on the store and its role within the customer’s path to purchase. That was a central theme of Nikki Baird, managing partner of RSR Research, when Supply Chain Nation sat down with her to discuss her predictions for retail in 2015 as part of our Expert Insight series. Here are Baird’s thoughts.

SCN:      What is the single biggest factor or trend you feel will impact retailers in 2015?

Baird:    There are a lot of important things that are going to happen in retail this year, but I think the most important one is the store. This is going to be a breakout year for changes that we will see in the store. I don’t mean that stores as we know them will be completely revisioned and re-implemented, because it takes a really long time to roll things out to stores. But there is growing awareness that store employees are at a big disadvantage versus consumers when they walk in the door because consumers are increasingly spending their time online educating themselves before coming to the store.

Over the past couple of years there has been a lot of questioning around what purpose does a store really serve if its customers can do a lot of activities online that we used to think were only exclusively happening in the store. When those things are no longer happening in the store, it changes the cost model of the store and the service model of what you provide in the store. I think 2015 will be the year that we see retailers shift from asking a lot of questions about the store to developing their strategies and experimenting around how they can really improve the store experience. That will include an employee focus as well as a customer experience focus.

SCN:      What should retailers do to get ready for and leverage this trend?

Baird:    Number one, if they don’t have an analytics strategy for measuring behavior and activities in stores, that should be a big priority because you really can’t develop a strategy for improving the store experience if you don’t really know what kind of impact your store experience has on customers today.

Most of what retailers know about customers today is either through printed customer surveys on receipts as the customer walks out the door, or more expensive ways like customer intercepts, following customers around the store, and things like that. With beaconing and a lot of interactive elements that go into stores, whether that is digital displays or notices through mobile devices, video analytics, and some of the creepier aspects that retailers need to be careful about like cell phone tracking, there is a lot more opportunity to get a deeper understanding of what is going on in your stores and how consumers are behaving.

One thing retailers really need to do when they undertake a measurement strategy is to be open-minded about learning things they thought they knew, but turned out to be wrong. They should go into an in-store measurement strategy expecting to learn new things as opposed to being surprised to find out customers don’t shop exactly the way everybody thought they shopped when they came in the store.

Once you’ve got your measurement strategy in place, an important next step is to understand your customer path to purchase, and that means connecting all of that store data that you’re gathering through online and the digital life of your customers, to try to understand things like: how many customers come to my store for the education or awareness part of their customer journey and then transact online, versus how many people research online and then transact in the store? At what point in the customer journey do they turn to the store? Do they turn to the store only for the transaction, or do the turn to the store for some kind of information about their selection before they make their purchase?

Understanding how the store fits into the path to purchase is really important. What comes after that is supporting the places where the store is not adequately serving that path to purchase today. That is where you get into evaluating how you change the customer experience in the store. Do you need to provide more capabilities to your employees? Do you need to give them clienteling or assisted selling?

In a really big move, retailers have realized that the high self-service model in stores is not a satisfying experience for customers. Even Walmart said they are going to raise the pay of their employees in stores. I think that says a lot for how they view the future role of the employee as part of the customer experience. It can’t just be behind the scenes or stocking shelves. It can’t be just low wage, low effort, low intelligence kind of jobs. You need real work for people who can interact and provide a higher service level to customers. I think we will see that realization sink in, as well.

SCN:      Thank you, Nikki, for your predictions and insightful comments.

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