Is CX the Future of Retail?
Old habits are hard to break. But retailers are at a crossroads and the direction they decide to take in the next couple of years will be their make or break.
Reinventing the physical retail environment is nothing new, but for some reason, retailers in Australia are still hesitant.
Although the causes may be multiple and varied from one business to another, what seems to keep most brick-and-mortar retailers awake at night is the rise of e-commerce. Our European and American counterparts however, seem to have risen to the challenge – and it’s working!
Cult activewear brand Lululemon’s success and growth is a good example of the critical nature of customer experience (CX) in retail.
One of the brand’s secrets is that they don’t just sell product. They have created an incredibly engaging experience for their community, addressing not only their practical needs, but their deeper pain points and underlying motivations.
You can see how Lululemon nurtures the community spirit in their stores by featuring a Wall of Goals from Lululemon members, or by regularly updating customers with information on hikes, yoga studios and other outdoor activities in the local area. In fact, most stores even host a free yoga class once a week.
Creating an environment where people don’t feel they are just being “sold to” is also expressed in things like Lululemon employees having staff bios that include their hobbies. This allows customers to get to know the person serving them a bit better, by relating to them and engaging with them on a more emotional level.
As an extension of this “personal touch” approach, Lululemon staff write the customer’s name on a white board and clips it on their change room door to remember it when handing over items.
These kinds of activations make the store environment a place where engagement and conversation matter as much as sales. By providing shoppers with inspiration and that feeling of being part of the Lululemon community, their customers become their strongest advocates. In terms of retail performance, these activities drive higher store visit frequencies and dwell time, lower customer churn, higher referral rates – all of which directly impacts the bottom line.
As a more local example of future-facing retail, Swedish Stationary house kikki.K recently launched their world-first concept store at Chadstone Shopping Centre in Melbourne. The kikki.K Studio draws on the brand’s strong Swedish heritage and design philosophy.
Workshop tables are activated seasonally to encourage customer engagement; beautifully crafted mood boards showcase how and why kikki.K’s iconic products were created; styled workspace nooks and finer details show customers how kikki.K can seamlessly fit into their stylish lives.
These retailers have embraced the rise of new technologies and taken the opportunity to rethink, redefine and redesign the traditional store experience. One that is better aligned with what customers want, and what technology enables.
“If stores are not just sales environments anymore, what should they become?”
DIGITAL RETAIL IS NOTHING TO FEAR
The convenience that comes with online shopping is great but a large percentage of the population still and will always enjoy getting out of the house and shopping.
In January of this year, Mood Media released the results of their latest consumer study by Walnut Unlimited, a global market research agency specialising in neuroscience, behavioural psychology and economics.
The results showed conclusively that shoppers want a singular experience and will chose brick-and-mortar over online if they get a memorable experience. In fact, 79 per cent of Australians were shown to be very/fairly likely to choose a store over online if there is an enjoyable atmosphere, such as music, visuals, scent and so on. Therefore, in order to succeed, retailers need a pleasant, inspiring and tactile experience in-store – something online cannot offer.
It is important to note here that the future of retail is not about brick-and-mortar competing with digital, but rather using both to provide a layered retail environment that is as much about the brand experience as it is about the products or services.
A MAP FOR MOVING FORWARD
Stores need to be more than a place with nice windows, good product and friendly service. Stores need to enable and foster human experiences and relationships in ways that are true to the brand and what it stands for.
There are a lot of things you can start focussing on when redefining your retail experience, such as: Focusing energy and resources on acquiring a deeper understanding of your target audiences, thinking about what their context, cores drivers, needs, expectation and pain-points are. Widening and cross-checking the knowledge around the whole customer journey – not just the store or website experience – but researching what happens before, during and after their visit. Investing in staff and employee engagement to make them active players of the brand and empowering them to deliver an outstanding experience. Curating the product offer in a way that best aligns with the brand will allow more room for other services and activities that complement the experience. Bringing each of these components together is what makes an air-tight CX strategy.
As another example, American retailer Nordstrom launched Nordstrom Local to better position themselves in the modern retail space.
Nordstrom Local is built on a simple premise: What if your favourite fashion destination was also your local tailor, manicurist, bartender, juicer, cobbler, stylist – and even your local coworking space?
That’s the essential idea behind Nordstrom Local, an innovative “service hub” the retail giant launched last October in Los Angeles. “We aim to bring the convenience and accessibility of some of our most popular or highly-demanded services right to the neighbourhoods where our customers live and work,” Shea Jensen, Nordstrom senior vice president of customer experience, tells Fast Company. “We’ve heard loud and clear from our customers that drivability is a factor.” As you can imagine, a deep understanding of the customer’s needs and pain-points were the foundation for the development of this new type of store.
The one thing you notice straight-up in these stores are the missing inventory – but that’s by design. Nordstrom Local clients begin their shopping experience well ahead of their visit in-store (either at home or on their mobile phone) and come to the store to pick up, try on or swap their online orders. In lieu of standard over-stocked shelves Nordstrom is giving customers an experience and service that better align with their purchasing behaviours and expectations
So far, customers have responded positively. So much so that today, Nordstrom Local is announcing two more locations in Los Angeles and potentially New York City. Each location’s decor and services will be personalised to the needs and tastes of the neighbourhood.
WHAT DOES YOUR FUTURE LOOK LIKE?
Retail is a noisy and overcrowded market full of players looking to get the most attention. And it’s often easier to give in to opportunism or cost-cutting strategies. But in this new age for retail, this will only take you so far. Investing in a thoughtful CX strategy that places your customer at the centre while delivering on business outcomes across all touchpoints of the experience, will guarantee success and longevity. Engaging customers on a deeper, more emotional level is proven to be the most successful method for brands to attract customers and retain loyalty, while significantly increasing sales.
The biggest thing really is changing your mindset and taking action. The good news is, you don’t have to change all at once.
“There is a lot of low-hanging fruit and quick-wins that you can start doing today that will dramatically improve your customer experience, both online and in-store. So, start today and see where it takes you. And remember that the longer you wait, the harder it will be to catch-up.”
We are a collective of strategists, built-environment specialists, digital innovators and highly creative designers who are dedicated to designing a better world with every project. We offer the benefits of collaboration across Frost*collective which is at the intersection of digital, physical and visual experiences. We work with businesses to create products and solutions, tailored to our client needs, that transcend technologies, channels and media with a focus on the overall experience.
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