We're living in a post omnichannel world — and, really, what that means for most tier one and tier two retailers is that they've done the work of investing in all of the key channels that make up the omnichannel customer journey. They've invested in mobile, web and social, and not only have they made these investments, but they've also allocated resources to connect these channels with their retail stores.
For traditional retailers, these physical brick-and-mortar stores remain the hub of the business. Sure, e-commerce sales have grown thanks to these investments, but digital channels still account for a relatively small percentage of overall sales. As a result, retailers are using these new digital channels to enhance sales, not just for e-commerce but also for the in-person business. That's placing more pressure on stores to execute at the highest levels and it's also leading to new challenges.
Today's digital shoppers look up in-store inventory online to make sure retailers have the items they want in stock. If customers arrive and that inventory is missing — or is in the wrong location — that means retailers have failed at executing. Between new shopping options like buy online, pick up in store and curbside pickup, there are even more hurdles for the retailer and customer to overcome. For example, the retailer needs to make navigating the parking lot, in-store pickup and return experiences all smooth interactions.
It's clear in-store operations are in the spotlight more than ever, thanks to increased traffic and new ways of doing business as a result of digital channels. Fortunately, technology can help retailers enhance these in-store operations to drive the customer experience.
Key technologies for driving operational excellence
In 2023, here are the key tools savvy retailers are investing in that make the work of ensuring in-store operational excellence more effective and efficient.
#1: Customer experience technologies
At a high level, retailers need to understand the current situation for customers — they need insight into customer expectations and behaviors, so they can better offer customers what they want, when they want it and where they want it.
Leaders need to find out what customers have to say about current in-store offerings, navigation and staffing. That's where CX technologies can help shed light on what's being said, and then enable management to make improvements across training, inventory and navigation from an operational standpoint.
Retailers can use surveys at in-store kiosks and via the brand's app, website or email and SMS marketing campaigns to ask specific questions about the store's layout, cleanliness, checkout process and employees to measure high level metrics, such as net promoter score.
They can also use AI-powered text analytics to gather unstructured data, such as call center call logs, emails, live chat conversations or social media mentions and messages, and analyze these inputs, distilling them into topics and themes while analyzing sentiment. Text analytics can uncover issues that are driving CX and revenue up or down, helping stores prioritize which areas to focus on improving first.
Brands can then use these tools to not only guide which changes to implement but also to verify whether these efforts are paying off. By bringing in point of sales data and overall business intelligence data and conducting financial linkage analysis, retailers can validate whether changes made to improve in-store operations and enhance CX are paying off. They can see whether customer scores and sentiment are increasing and if financial measures, such as market share, repeat customers and revenue, are increasing as well.
#2: Handheld inventory technology
Retailers are equipping store employees who work on the floor to be able to find products, look up product locations and have access to back stock, so they can intervene in real-time when customers can't find what they're looking for.
#3: Smart scheduling technologies
More than ever, retailers need to understand foot traffic patterns and plan accordingly, so that they're staffed appropriately and employees are focused on serving customers rather than taking care of tasks like cleaning or stocking, which can be handled during slower times of the day.
In addition to rolling out new technologies, retailers need to offer the necessary training to set employees up for success when it comes to using and learning from these tools to meet customer needs.
Retailers have invested heavily in omnichannel, and they're looking for that investment to pay off. Most of that ROI is going to happen on the in-store side of the business, but to optimize for the greatest ROI, retailers can't fail when it comes to the analog side of the business — that is, the in-person experience. After all, customers won't keep coming back if retailers keep getting things wrong.
This is all the more important now in the current economic climate, as recent research from Sense360 by Medallia revealed retail customers are buying fewer items but for those brands that they are shopping with, they're spending more money. With share of wallet going to fewer retailers, the challenge is to become one of those select retailers.
How are customers picking which retailers they're doing business with? The answer is clear: When given the choice between the retailer that falls short on operational excellence or the competition, they'll opt for the one that's laser-focused on execution.