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Service With a Smile--and Personalized
That's the challenge from today's shoppers, and retailers must meet it to survive.
Posted Aug 1, 2005
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As their lives continue at a hectic pace, today's shoppers are making it clear what they want in a retail shopping experience. Often more than low prices, they favor friendly, knowledgeable, fast, and personalized service, products that are easy to find, and interactive technology that recognizes and rewards them for their loyalty. If they don't get those things, they will take their business elsewhere. Those are the strategic insights of an in-depth study titled "The customer-centric store, Delivering the total experience" by the IBM Institute of Business Value coupled with a new IBM Consumer Attitudes Survey of 1,000 American adult shoppers. The study comes as the retailing sector gets more complex than ever, sparked in part by increasing customer diversity and individualism. As megaretailers and focused specialists establish a "world of extremes" on the competitive spectrum, undifferentiated merchants in the middle face tremendous pressure. Traditional price strategies and levers of competition like assortment and service are ineffective today, usurped by the mass merchandisers and copycats. At the same time, the Internet has raised customer expectations since it allows them to gain instant access to price and product comparisons, among other things. Break Out of the Mold For retailers the key words are differentiation--it's not a one-size-fits-all formula--and customer-centric store experience. More than half of the surveyed shoppers say retailers who fit the same mold turn them off. What's clear is that many retailers have been so busy paring costs, they haven't focused on developing their own unique experience. The May survey also underscores that most Americans (81 percent in the survey) are loyal to certain retailers over others, and they cite employee helpfulness (34 percent) and a well-organized store (32 percent) as key reasons for their allegiance. To achieve differentiation and quality customer service, both strategically and through execution, retailers must embrace four imperatives. Retailers must:
  • Build an organization and a store built from the customer perspective "in," not the retailer perspective "out." Such a strategy should align with customers' desires and, through innovative concepts and offerings, continuously enhance and sustain customer satisfaction.
  • Provide a truly convenient shopping experience by giving customers more control over the entire retail experience, providing them with the tools, information, and services required to make an informed and confident purchase.
  • Develop an integrated view of the customer by uniting all pieces of data gathered across all customer touch points and channels to let retailers deliver seamless shopping experiences and more relevant offerings.
  • Tailor the shopping experience to different customer needs and shopping occasions, including across different segments, local markets, and product categories.
    Virtually all of today's leading retailers are evaluating emerging technologies as they fashion the Store of the Future. These technologies include self-checkout, intelligent shopping carts, guided selling and interactive product displays that meet consumer requirements for convenience, speed and easy access to information on product details, discounts, and personalized offerings. The IBM consumer survey confirms consumers' strong interest in technological breakthroughs to help them shop. Sixty-eight percent of respondents, for instance, prefer shopping in retail stores with price scanners that confirm prices before checkout. And 45 percent believe an interactive touch screen with product information on the wall or shelf next to merchandise displays would most likely encourage them to shop at these specific retailers. Keeping Customers' Needs Priority No. 1 To build an organization that constantly stays in touch with customer expectations, retailers must focus on three key areas. They must keep a laser-like focus on who represents their target customers and how best to meet their needs. Getting feedback from customers is essential. Second, they must experiment with innovative formats, concepts and product offerings. Developing prototype stores, like Metro's "Store of the Future," enables retailers to test nuances of their new strategies from a first-hand perspective. Third, retailers must take greater responsibility for the quality of their employees since they're often a customer's first--and last--point of interaction in the store. They should consider using behavioral testing in hiring to determine if applicants are customer-focused and fit in with the corporate culture. It's clear that in today's constantly evolving retail marketplace, satisfying customers' expectations requires retailers to more closely align their offerings to their target customers' needs and to provide them with options for how they prefer to shop. Retailers who do this well will realize greater customer satisfaction and loyalty, higher rates of converting shoppers to buyers, and a bigger shopping "basket" by giving customers more options to how they can shop. If they succeed, retailers may not only get high marks for shopper satisfaction. They likely will also spark customers to shop more often and spend more with their favorite retailers. And you can take that to the bank. About the Author Jan Jackman is general manager of IBM retail store solutions and retail on-demand EBO. She can emailed at Jackmanj@us.ibm.com
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