Gartner Blog Network

Excellent retail experiences are hard to find, yet we expect customers to pay more for in-store purchases?

by Robert Hetu  |  January 23, 2014  |  3 Comments

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.

Additional Resources

View Free, Relevant Gartner Research

Gartner's research helps you cut through the complexity and deliver the knowledge you need to make the right decisions quickly, and with confidence.

Read Free Gartner Research


Tags: amazon  consumers  multichannel  omni-channel  personalization  price-transparency  pricing  retail  showrooming  stores  

Robert Hetu
VP, Analyst Retail
7 years at Gartner
29 years IT Industry

Bob Hetu is a Research Director with the Gartner Retail Industry Services team. His responsibilities involve tracking the technology markets and trends impacting the broad-based retail merchandising and planning areas. Mr. Hetu is an expert in the areas of brand, vendor and assortment management, merchandise planning, allocation, and replenishment. Read Full Bio

Thoughts on Excellent retail experiences are hard to find, yet we expect customers to pay more for in-store purchases?

  1. Kenneth Shaw says:

    I’ve heard about studies and practical examples that purport to prove that pricing transparency doesn’t work in retail. Most people say that they want simple pricing in retail, but stores have bigger profits when they put up lots of sale signs rather than putting up prices for what the price would have ordinarily been. People like the thrill and perception of getting a deal, so they’re more likely to buy when priced at $100 with 10% off rather than simply pricing something at $90. That being said, there’s no excuse for bad service, dirty stores, sales people that ignore customers, etc. The one advantage that retail has is that they’re able to provide in person service. Online is much cheaper to run and with so many social networks and so many options at places like there’s a wealth of alternatives for most people to turn to. If retail doesn’t provide good service, they have no advantages left. Amazon is already trying to get same day delivery out there so then there’s nothing left if stores can’t provide great customer service.

Leave a Reply

Your email address will not be published. Required fields are marked *

Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes, with attribution to Gartner. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.