With the holiday season underway, retailers are tapping their marketing budgets to entice shoppers to spend at their stores and online. At the same time, though, they are making mistakes that are keeping customers away.
“Retail right now is a mixed bag — some winners and some losers. And a lot of that comes down to the experience offered,” Nikki Baird, vice president of strategy and product at retail tech firm Aptos, said in emailed comments. “Consumers today have higher expectations for what a retail experience — particularly in the store — needs to offer than it did five years ago.”
Here are retailers’ most common missteps in merchandising and store operations.
Getting the merchandise
Many retailers are making it difficult for their customers to obtain what they’re trying to sell.
An obvious example of this is the locked-up products that consumers are increasingly finding at stores, mostly at drugstores and mass retailers. A great majority of shoppers — 62% — say they’ll wait for a store employee to help them, but more than a quarter say they will give up on their purchase or go elsewhere, according to recent Numerator research. Those unwilling to wait for assistance spend 21% of their dollars online compared to 18% for those who waited.
“When faced with a locked product, there’s more than a 1 in 4 chance shoppers will leave that retailer without making a purchase,” Numerator analyst Amanda Schoenbauer said by email. “This rises even higher if you’re talking about younger shoppers, people with children, or if the locked items are in everyday categories like health and beauty.”
Inadequate staffing exacerbates the very problem of theft that locking merchandise is supposed to thwart, according to Brendan Witcher, vice president and principal analyst of digital business strategy at Forrester.
“Associates have always been a key factor in making sure stores are safe and secure by acting as a deterrent through visible presence and shopper interactions,” he said by email. “Without enough of them in place, retailers are forced to find other ways to ‘protect’ the store.”
Self-checkout is another area where retailers are missing customer expectations when it comes to assistance and connection, experts say.
Bottom of Form
“The folks missing the boat are viewing self-checkout as a cost-savings opportunity, which ignores the sole advantage of brick-and-mortar retail, where you have human interactions,” Brett Wickard, founder and president of unified commerce platform FieldStack, said by phone. “Retailers who are studying the customer journey data know that the more touchpoints you have — the more genuine person-to-person interaction you have — not only does that customer shop with you longer, they’re a more engaged customer.”
Fostering discovery
People who shop online are there primarily for convenience, while those who head to stores expect a certain level of merchandising, according to research from Jonathan Zhang, professor at Colorado State University’s College of Business.
Research from Zhang and others indicates that curating merchandise and providing good customer service in store have helped protect local retailers like independent booksellers from Amazon’s fierce competition.
This matters to some extent online as well, according to Kristin Naragon, chief strategy officer at Akeneo. Research from Circana highlighted “the growing importance of online research and price comparison before making a purchase.” More than 80% of holiday shoppers plan to shop online this year, according to Circana’s Holiday Purchase Intentions report. Fewer will shop online exclusively, which is an opportunity for brick and mortar, per that report.
With so many consumers shopping online and being careful about their discretionary spending, it’s more important than ever to create “a frictionless discovery to purchase experience where customers can easily find, compare, and confidently purchase products,” Akeneo’s Naragon said by email. This is accomplished in part through online assortments, product descriptions and search options that are meaningful to customers and easy to manage.
“However, where many retailers continue to fall short is either overwhelming buyers with choice or not giving them enough information in order to make that confident selection,” she said. “A core reason driving both of those failures is a retailer’s lack of investment in curating their products.”
Customer service
Squirreling away goods behind locked cases or over-reliance on self-checkout aren’t the only ways retailers discourage customers. Too many have trimmed their costs by drastically thinning out their store staffing in general, experts say.
More than 40% of consumers surveyed by Theatro, which supplies tech for frontline workers, described shopping in stores as “less enjoyable” than before the pandemic, and 60% of them pointed to poor staffing levels. This hurts the top line, according to GlobalData Managing Director Neil Saunders, who has monitored a dearth of staff and customer service at retailers like Macy’s and Nordstrom.
Retailers who measure repeat business find that good in-store customer service brings people back into the store time and again, according to FieldStack’s Wickard. Cutting staff is a short-term profit boost that hurts in the long run, and is usually undertaken by retailers that aren’t looking at the right data, he said.
“Retail at its core is really four walls and some people coming through the door. What you do with that is what makes you who you are,” he said. “If you don’t have incredible retail teams and great inventory — that’s literally the reason you exist. You can never under-allocate customer service. Not only that, you should view it the exact opposite way, where, when other retailers are under-serving customers, you should actually be doing the reverse and investing in that because you are going to have more and more customers who are going to be entering your doors, and you have that golden opportunity to win a new customer.”
A lot of retailers miss this because they fail to view holistic data, due to disconnected point-of-sale and customer management systems. This leads to “smart short-term decisions and really poor long-term decisions,” Wickard said.
Failing to cater to customers in stores through meaningful communication and merchandising is throwing up obstacles, according to Colorado’s Zhang.
“Retailers are foolish if they do not make it easier for consumers to shop, easier for consumers to get their questions answered by trained staff, and also easier for customers to discover new things and new categories,” he said by phone. “These are the benefits that stores have over online, so they should just maximize that.”