Excellent retail experiences are hard to find, yet we expect customers to pay more for in-store purchases?
I hear calls for exceptional retail experiences as a way to stem the tide of declining physical store sales. On its face this makes sense but then I ask myself, how will retailers that cannot execute on customer basics provide such experiences? A tour of local stores will show the issues quite clearly. Dirty and messy sales floors, broken fixtures, empty shelves, sloppy or uninformed associates, and long checkout lines are all symptoms of a larger problem. I visited my local big box discounter again last week, on a mid week morning, and found the same issues I have seen repeatedly throughout the holidays (strike that, I mean throughout the years). But now it’s late January, what gives? Not that It’s ever okay but to some degree it’s understandable that there are times of overwhelming demand during the 4th quarter. But why on a quiet January morning are there packed carts of returns stacked 20-30 deep, while departments are in total disarray. And then there are the checkout lines that are so long people are putting down merchandise and leaving the store. Why are we surprised that people don’t want to go to the store?
Its smoke and mirrors to believe that pricing competition won’t be a primary driver of sales erosion in this environment. Sorry retailers but if by chance you haven’t been impacted by showrooming it’s more luck than anything else. There are a few concepts that you have to accept and they are not new – price and availability are the drivers of consumer’s choice of purchase channel. Consumers have spoken and they expect pricing that is competitively right and consistently offered to them across channels. The extent that you as a retailer are able to charge more for products that are available in store is determined entirely by the value or premium the consumer is willing to pay for availability of the product and the store experience.
You are running out of time. So with the clock ticking what can you do? First get your head out of the sand. Second embrace pricing transparency. Third make sure that you are executing on the customer basics. If, and it’s a BIG IF, you can determine a store experience that will be supported by a customer willing to pay a premium, then invest in new store experiences. This can be done only after determining what your customers want from the shopping experience. You are not in the driver’s seat any longer. You are at best a co-pilot.
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