He Said / She Said: How Shoppers and Retailers View the 21st Century In-store Experience

Retailers have spent the last half-century off-loading more and more tasks associated with product investigation, comparison and selection to their customers. “Unassisted selling” has become the status quo. In many cases, the retailer’s role has been defined as providing indirect service via effective merchandising, and even that has been standardized and homogenized. We have reached the point where consumers feel they are swimming in a sea of sameness, and retailers know it. However, consumers are resourceful people and are moving to digital channels to service themselves. It’s just more convenient.

But is that enough? Imagine a world where every retailer's un-service profile is exactly the same. What's the point of differentiation then? How do you compete? Not on price: price has become transparent. Not on location: the digital channels are everywhere. Not even on product – the vast majority of products can be had from another retailer, anywhere, anytime. This raises an important question for Retailers: What's your BRAND?

The opportunity is in wrapping customized SERVICE around product offerings. But the consumer’s mind is no longer an empty slate just waiting to be written on - consumers know so much more than they used to, and perhaps more than retailers do about the products they sell. The one thing they don't have is time - and that's the dimension where service could really help. That's NOT “customer intimacy” but it is about trust. Consumers are willing and actually anxious to outsource some of their time-intensive tasks to someone they can trust to get the job done.

That can be the retailer’s differentiating value - the BRAND.

RSR and NCR separately surveyed retailers and consumers in the Americas to discover whether their perceptions of the in-store customer experience were similar, or if retailers were missing the mark. We analyzed responses across five dimensions: loyalty programs, product mix, customer service, the impact of cross-channel, and social media and mobility. Retailer responses were culled from several RSR surveys, detailed in Appendix A. NCR commissioned a separate consumer study in 2011 and received responses from more than 2,365 consumers across the Americas. Following is an overview of our findings:

Loyalty Programs: Loyalty Must be Earned and Cannot be Bought

Loyalty programs are not an end in themselves. Consumers become loyal when retailers get the basics of price, product and service right. Then they are far more open to communication about their favorite products, the latest hot promotions, and new offerings that are similar to items they have bought before. This is quite different from the desire retailers have to build “deep relationships” with their customers. We know retailers have been unable to take advantage of the data they do collect. Most retailers and consumers agree that retailers don’t really know who their best shoppers are. If retailers can get the basics right, loyalty programs will become more effective again.

Products: Focus on What I Buy, Not Your Guesses on Who I Am

Web-based commerce and the explosion of social media have brought retailers a wealth of information most never had before – information on their current and potential customers. Retailers have embraced this data, almost to a fault. More than 70% of retailers report customer data is more important than sales data in helping understand demand trends. Recent economic events have also had a different impact on shopping patterns than retailers expected. While both consumers and retailers agree that a difficult economy changed something, retailers have found those changes very hard to predict, and focus instead ii on managing deviations from sales forecasts. In the future, retailers either need to focus on earning trust through relevancy - a subtle, yet completely different result than personalization - or they simply need to stop guessing and start asking consumers what they want.

Service: Consumers Have Few Expectations of Getting Help in Stores

Retailers’ emphasis on making their in-store employees more productive has put their focus on tasks, rather than people but store employees need to be more than just “warm bodies” on the selling floor, or harried workers who are too busy to help. We believe that consumers have learned to fend for themselves, finding too-busy, uneducated employees more of a hindrance than a help. Interestingly, those same consumers would be far more open to “technology-empowered” employees. Sadly, the Store Manager is a virtual non-entity to many consumers, as he is so rarely available on the selling floor. Even if they could find better service from employees, consumers are also interested in technologies that help them help themselves like self-checkout and kiosks. These technologies remain very important across the Americas.

The Converged Customer Experience across Channels

Not surprisingly, both retailers and consumers recognize the importance of giving consumers what they want, where they want it, to take delivery in the channel of their choice. There is, however, some disagreement on pricing strategies. Consumers expect product information and price consistency across channels. Retailers still have not gained a full appreciation of the impact of price transparency, and remain stuck in zone and channel-specific pricing models.

Social Media and Mobility: Looking Ahead to the Future of Engagement

The impact of Social Media currently exceeds that of mobility. While we find a lot of “noise” around the use of mobile price check applications, the data does not prove out in aggregate. It may well be that the next cycle of phone replacements will give more consumers the option to use their phones in this way. Retailers are wisely preparing for that cycle.