As a retail industry expert, what is your take on the current state of the marketplace?
Retail is definitely struggling right now as an industry. According to ShopperTrak, retail foot traffic is significantly declining and most retailers are contracting their store footprints. The 80s and 90s brought an oversaturation of big box retail square footage and the consumer demand simply isn’t there for that much space.
While there is plenty of talk about an economic recovery, it’s not clear that consumers are back to their pre-recession spending ways. Retailers find themselves in an increasingly competitive and promotional environment to get close to positive comp sales which adds significant margin pressure.
Lastly, consumers are shifting their shopping behaviors from traditional department stores and malls to the Internet, discounters, and dollar stores.
It will likely be a challenging holiday season for mall-based retailers.
What trends are you seeing in the retail industry from a customer loyalty, customer experience, and customer engagement perspective?
After years of more talk than action, I feel that we are finally seeing brick & mortar retailers embracing the omnichannel experience. Traditional retailers like Macy’s and Walmart have significantly invested in integrating their store, mobile, and online experiences.
Walmart’s Savings Catcher is a really interesting new take on loyalty. It’s basically a price matching tool that compares prices in local markets and returns savings to consumers. Of course, the consumer has to share their information to get the savings, allowing Walmart to potentially create an enormous database of customer information. It remains to be seen what they will do with all of that shopper data, but it could be interesting.
We’re seeing more retailers looking for tender neutral loyalty programs versus just credit card driven ones to be more inclusive and track more customer behavior. Express and Bloomingdale’s launched tender neutral programs in 2012 and Kohl’s introduced its Yes2You program toward the end of 2014.
The recent high publicity retail data breaches pose a challenge for loyalty programs going forward. Retailers are going to have to offer up much more compelling benefits to get consumers to share their personal information. And they will likely need to invest significantly more in keeping that information safe.
Mobile wallets have been around for a while but have yet to achieve widespread consumer acceptance. Two new products may change that. Apple Pay is set to launch this month and has the support of major retailers and banks. MCX is preparing to launch CurrentC, a competing mobile wallet which has the backing of major retailers like CVS and Best Buy.
2015 should be an interesting year for beacon technology as well, which enables real-time targeting to mobile devices. While Apple launched this technology in 2013, it was too late to impact holiday shopping. It is estimated that half of the top 100 retailers in the U.S. tested beacons in 2014. Retailers will need to be careful with this technology, however, as it can seem “creepy” or invasive to consumers.
What are the biggest or most persistent challenges you see for retailers?
Consumers are becoming increasingly fickle and are often just looking for the best deal or promotion. They have unlimited access to information wherever they are from their mobile devices which is eroding brand loyalty. This is particularly true with Millennials who tend to be less brand loyal and who are increasingly switching to outlets, the web, and dollar stores.
Brick and mortar retailers need to find ways to differentiate their shopping experience outside of promotions. Retailers like PetSmart can do this with engaging in-store activities like pet training, grooming or doggie daycare. Bloomingdale’s Loyallist Program engages top customers with exclusive in-store events with designers. All of these need to be consistently tied to the online and mobile experience.
What are their biggest needs?
Brick and mortar retailers are challenged to keep up with the technology of the Amazons of the world, but with low margins and pressure to keep up with comparable store sales and margins. Often, they are dealing with antiquated POS and store systems that cannot integrate with the online, mobile or loyalty experience. These retailers need better tools to prove the ROI of technology investments.
How would you characterize the evolution of technology in the marketplace and retailers using it correctly to drive engagement?
Mobile is becoming increasingly more important for retail. The number of tablets in use in the U.S. is expected to reach 280 million by 2017. Today, 60% of the time consumers spend on their phone is spent on mobile apps. Retailers need to develop compelling and integrated mobile experiences that are channel agnostic. The customer increasingly wants to make a purchase wherever and whenever is convenient for her. Retailers should be investing in mobile apps, wallets and beacons.
What would be your advice to retailers who are trying to be customer-centric, but just haven’t been able to put all the correct pieces together internally and form a corporate culture standpoint?
Customer centricity needs to be an enterprise wide endeavor. I always cringe when I see titles like SVP of Customer Experience. It’s a nice gesture, but it implies that one person owns the customer experience. Every facet of the organization needs to own the customer and feel responsible for their experience. Measurements like net promoter scores need to be put in place and every department should be measured against them. The most important three feet in retail will always be the three feet between your associates and your customer. The organization only exists to empower that relationship.