Saturday, December 29, 2007

Can high-tech gadgets improve customer service?

Normally when I think/talking about high-tech innovation in retail over at Kiosk News or Digital Signage News, I'm usually referring to new options for self-service (on the former) or technical additions and improvement to the store itself (on the latter). But this article from the AP highlights another way that PDAs, WiFi and other gadgetry are helping out: by empowering store associates themselves. The article highlights an experiment at Macy's where,
"Without leaving the customer's side, Macy's sales associate Felicia
Dixon uses a small, handheld electronic device that essentially summons
the shoes in the right style, color and size, from the stockroom. It is
not quite magic: A clerk in the backroom receives the request
electronically and brings out the merchandise.

"The shopper does
not have to hunt around for a clerk each time she wants to try on a
different style or needs a different size. Better service means happier
customers, and that could lead to more sales.

"At least that is the hope, from the retailer's perspective."

We've certainly seen a good number of innovative electronic devices show up on the retail scene lately, but aside from a few notable exceptions (e.g. Apple store employees walking around with miniature POS terminals built into PDAs) most of it has skipped the store personnel in favor of going directly for the shoppers. While that strategy is certainly understandable (or at least not obviously wrong), I have noticed a number of retailers trying out hand-held devices this holiday season. I've seen Macy's and Lowe's employees (I think - after so many stores it's hard to remember) using hand-held scanners, along with a few different temporary mall kiosks set up to sell holiday giftware and baskets. The devices leave personnel free to roam the floor looking for people in obvious need of help, and in turn lets customers being helped avoid long lines. Aside from being able to offer more personalized service, I'd imagine that the tech-equipped salesforce could also encourage up-sells and cross-sells, potentially making the transaction a more profitable one for the retailer. So in the best possible scenario, it's a win-win.

It'll be a long time before handheld POS replaces the checkout line, since retailers are notorious slow movers and have tight budgets even in the best of times. But for the holiday rush it seems like a great way to increase checkout capacity without taking up more floor space. And who knows, with a few years of holiday data maybe the ROI of such an approach will cause a transition to this type of service during non holiday times.

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Monday, December 17, 2007

Retail stores try to stay relevant/compelling for web-savvy shoppers

Over at BusinessWeek they've taken a very comprehensive look at how the increasing amount of web-savvy shoppers is affecting the retail industry. They conclude that the big change in shopping behavior boils down to a lack of patience on the part of this new type of shopper. For example, if a customer can't find what she wants at a store or has trouble getting information about that product from store reps then she'll simply go online. This is obviously dangerous for bricks-and-mortar shops, since a customer shopping at Best Buy who leaves because she couldn't find what she wanted, won't necessarily make her purchase from BestBuy.com. She could just as easily go to Amazon, and Best Buy would have lost a costumer because their in-store experience was not up to snuff with the web (despite the store being much more costly to maintain).

This should be a wake up call for retail stores, especially during the biggest shopping season. The increasing power of the web must make retail outlets more prepared to serve customers if they want to remain relevant. The clich├ęd model of the pimple-faced teen with no product knowledge working behind the counter simply isn't going to cut it anymore. The store's power still lies in being able to provide personalized experiences and information to customers, and if somebody is shopping in-store they're basically saying they value that. They don't want to be bothered by no-nothing idiots. They want a very friendly and knowledgeable human being to assist them. No more jaded sales employees. If customers don't require (or don't value) that level of interaction, they're more likely to stay at home and do their shopping online.

The article also discusses how Best Buy in particular is putting its employees through a much more rigorous training process which hopefully makes them better prepared to answer customer questions and provide more informed recommendations, as Bill noted two weeks ago. Best Buy's chief competitor, Circuit City, has also made it much easier for customers to order online and then pick up their purchase in the store, which makes for an effective integration between their web and retail shopping experience. So it's obvious they're paying attention to what's happening and trying to react. In-store pickup is a good example of using the web's wide net to funnel people into the bricks-and-mortar store, and has the potential to become the cornerstone of many multichannel marketing approaches in the future. But Best Buy gets my applause for understanding why people still shop in stores -- it's the people and the experience. And that's what they're trying to focus on and improve now.

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Thursday, December 13, 2007

Restrooms drive draffic, but is it the right kind?

I love this. I'm sitting here, up to my neck in high-tech systems and solutions for driving store traffic, imparting useful information and generally improving the in-store experience, and at RetailWire they're talking about restrooms. You know, toilets and plumbing and whatnot. Apparently in London there's a new trial service available that will tell you where the nearest public restroom (or friendly retailer with an open restroom) is when you text a message from your mobile phone. Using fancy cell triangulation tricks (or something) it simply gives you a list of addresses, ordered from nearest to furthest, and leaves you to decide where to go. Participants in the system agree that it's definitely driving traffic, which lead Bernice Hurst, the Managing Director at Fine Food Network, to ponder whether all of that new traffic is necessarily a good thing. After all, there are lots of people who might only be interested in your facilities, and not necessarily your products/services.

As expected, the comments range across the spectrum from "more traffic is always better traffic" to "there's no way I want a bunch of non-customers in my restrooms." With a few exceptions, I tend to agree with the latter group. However, if all public restrooms were handled like Charmin's (and there's a new one on Broadway between 45th and 46th streets right now, apparently), I might change my mind. Of course, it's nice when you have an army of 200 to clean the stalls after each use, and I'm sure a lot of the equipment and decor was donated by companies looking for a share of the brand recognition and positive glow that Charmin nabbed when it first tried out the high-end public toilets idea in Times Square last year.

That's really what it comes down to for me. Nice, free facilities can be a major differentiator, and if you're having trouble separating yourself from a close competitor, that might be enough of a reason to take the plunge (no pun intended). But doing so at the cost of a plummeting activation/conversion rate and the added expense of upkeep, maintenance and insurance (yes, even your liability insurance may go up if you have a public restroom) isn't likely to be profitable.

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Tuesday, December 11, 2007

The genius behind Apple's "Genius Bar"

Ever since Apple opened its first retail store just a few short years ago, there have been pundits heralding the demise of the fabulously stylish (still?) tech company. After all, retail presences had killed so many other, bigger computer firms in the past, so what made Apple unique?

Well, the answer, of course, is the focus on the customer experience. What lots of people failed to realize was that a company as obsessed with the user interface as Apple had probably figured out that that same attention to detail would be required to deliver a positive, memorable bricks-and-mortar shopping experience.

Fast-forward to late 2007 and what do we see? Over 200 Apple stores in operation around the world, massive growth on tap, fat margins, a wide selection of (still?) trendy products, and a stock price that shows no signs of coming down soon. But not content with their successes so far, Apple figured that their admittedly-great retail experience still has some room for improvement.

Thus I was pleased to see this announcement at Yahoo noting that the company would be putting more of a focus on their "geniuses" -- Store employees who are filled with Apple knowledge and ready to help, whether it's showing how to use a new iPod or figuring out what's wrong with a Mac. Where other stores routinely have difficulty getting their staff to connect with shoppers, Apple actually asks you to go online and book time with geniuses before making your way to a store.

So let's look at what Apple has done: They've built a retail experience around having great staff. They hired great staff. Sure enough, people don't treat the great staff like a bunch of lepers or used car salespeople. In fact, customers now come to the stores specifically because of the staff in many cases. In response, Apple's latest store has a Genius bar capable of handling up to 50 shoppers at once, and they've added a "personal shopper" service.

While Apple's product line and core demographic lends itself particularly well to guided selling and in-house support, it doesn't seem like the success of Apple's geniuses should be limited to that one company, or even the home/personal electronics industry. There are plenty of other stores that I go to where the staff is truly excellent -- they're knowledgeable, friendly, courteous, and they know when to intrude and when not to. But it seems like there are few other brands who have made great products, great service, great stores a core part of their marketing strategy. Down here in Florida, the Publix grocery chain is trying. They've been big on service since their inception, but only recently have they started focusing on the overall store experience more. I know people are in love with Trader Joe's, and they certainly have a strong reputation, but I haven't shopped there enough myself. Wholefoods has a solid brand, and their stores are pretty to look at, but while free cheese and cracker samples are nice, I haven't found the staff to be up to snuff on many occasions, and their store layouts leave a lot to be desired.

So who else is out there? What other brands offer solid store experiences backed up with first-rate staff bent on making shoppers feel good? I'm sure there are lots of local guys, but are there any other national (or even regional) guys making this a priority right now?

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Monday, December 03, 2007

Borders adds original film & music content to in-store video

According to this article in Variety, Hollywood is taking some tentative steps into the store, with Borders announcing that they'll be featuring videos of live musicians as well an interviews with prominent filmmakers like Wes Anderson, or as they put it, "real entertainment programming -- not ads."

While I think this is great idea, when it comes to Hollywood the line between entertainment and advertising is very hard to define. Take for instance late-night talk shows. Yes, they are entertaining, but actors and musicians appear on them for the purposes of selling a new product of theirs. So let's be honest and look at the implications of showing this kind of content in store... You can't put interviews and live shows on a screen in a Borders and not call it an ad, no matter how entertaining and informative it may be.

I'm a Borders junkie myself. I can't walk into the store without buying something, so anecdotally I think this kind of advertising has a good chance of being successful. There have been plenty of times when I've lingered inside while unable to make a purchase decision. If I were to see a particularly interesting interview or a great live performance, it could easily sway me. "Entertainment" as a concept is much easier to sell in video form than other media, so the producers of this content no doubt see an opportunity to get their pitch across in the best way possible, and to an audience that's already receptive to making purchases.

However, people also go to Borders to get away -- it's a haven for a lot of people. So if the content isn't truly entertaining, and it's just thinly-veiled advertising, it will be a turn-off for a big contingent of Borders shoppers. That will be the toughest part of this project: making sure that the content, if it has to lean more towards the direction of entertaining people than trying to sell to them.

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Best Buy to wow customers this holiday, but the right way?

On the one hand, this press release from electronics retailer Best Buy detailing the results of their annual holiday survey seems to make plenty of sense. Faced with making a big-ticket electronics purchase, the vast majority of survey respondents indicated that a good return policy, attentive phone service and lots of customer assistance available on the sales floor would be the most useful changes that Best Buy could make this season. So, not surprisingly, these are the areas that Best Buy has been focusing on. They've extended their return policy for holiday purchases through January 31st. They've converted a third of their sales floor staff to "Customer Assistants" who will hopefully provide knowledgeable, reassuring service to bewildered buyers. And they enhanced their phone support options by letting callers connect to live store operators that can consult on purchases, check product inventory, etc. These are all good things, right? Surely they'll impact the firm's bottom line (in a good way) while improving the in-store experience, right?

Well, maybe not. At least not necessarily if you believe what the Integer Group found (according to this AdAge article) recently when it came to making consumer electronics purchases. Specifically:
[A]mong all shoppers, almost one-third bought electronics based on an offer or promotion, the most popular being rebates and sale prices. Also, most of the buyers (75%) browsed on the web before purchasing. Shoppers went online an average of more than three times to do research before buying, and it was "not uncommon" for the shoppers to make 10 or more internet visits.

...However, even more important are effective in-store displays. When the buyers in the survey rated the in-store displays as effective, their purchase satisfaction went up by almost 300%.
So essentially what Best Buy's survey found to be important doesn't seem to jive with what Integer's survey found to be important when making a sale. Normally I'd say that improving the in-store experience and driving sales aren't mutually exclusive goals, with the former often driving the latter. But these results are pretty weird. The availability of trained sales staff on the floor did little to promote sales, whereas it was #1 on the list of things customers hoped to see from a new and improved Best Buy performance. On the other hand, nobody in the Best Buy survey was clamoring for new or better POP displays. Nor did they mention they wanted lower prices or better promotions (though that was probably due to the way the survey questions were presented). Yet Integer's survey indicated that these devices were best at driving sales.

So who's right here? Are people assigning some mental value to items on a survey page that don't translate in the real world? Or is it simply futile to try and compare the results of two different surveys, one trying to improve customer satisfaction and the other trying to understand the sales process and key triggers?

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Saturday, December 01, 2007

Kroger and Nascar team up for in-store blitz

According to MediaPost, Kroger and Nascar are gearing up (no pun intended, honestly) for a major in-store marketing push, with Nascar providing POP displays, buying screen time on the digital signage network and even branding packages for dozens of different branded goods in 2,500 Kroger stores. The purpose of the event will be to celebrate the 50th anniversary of the Daytona 500, Nascar's central event.

As you might imagine, branding packaged goods means that Nascar isn't just working with Kroger on the deal. They've made arrangements with General Mills, ConAgra, Kellogg, PepsiCo and a bunch of other companies to feature the Daytona 500 50th anniversary race logo on products in Kroger stores, all starting this week.

Interestingly, one major reason to work an in-store marketing deal is because Nascar fan demographics are starting to shift. About 40% (and rising) of Nascar fans are women, and this campaign is seen as a way to better reach that part of their audience as well as promote the brand to more Kroger shoppers (like most grocers Kroger skews to women too).

I have to say I'm impressed. This is a pretty savvy move, even for Nascar, which is known to have run some clever campaigns in the past. I wonder if they'll have any way of measuring the discreet elements of the promotion to see which work and which don't. Given the quantity of products that will be branded and the fact that there will "only" be 2,500 stores running the campaign, it doesn't seem like standard-issue split tests will be viable. Likewise, if they want to go for maximum exposure at all costs, they likely won't want to limit the amount of marketing in any given store. Thus, it'll be hard to figure out how much of an effect the branded merchandise has versus the branded fixtures or digital signage ads.

Or, given how massively profitable Nascar and related companies like ISC are, maybe they just don't care :)

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