Delivering growth with experiential retail
Experiential is one of the hot topics in retail.
John Lewis has announced plans to devote one fifth of their floor space at their new Oxford Westgate branch to providing experiences and services to their customers, and many other retailers are planning similar initiatives.
Get past the buzzwords and theatre training, and this approach makes perfect sense. In the face of internet retailers and customer expectations, traditional retailers have to update the in-store experience to make it more relevant and compelling to customers.
Fujitsu’s Forgotten Shop Floor research found that browsing & purchasing products remains the top reason for customers to visit stores, but close behind that is the in-store shopping experience. So retailers with an extensive physical presence are in a strong position to deliver growth.
Speed bumps on the road to experiential success
However, there are challenges to delivering real sales and profit growth through experiential.
The traditional financial equation for retail real estate is that the more floor space you have, the more stock you can carry and the more you can sell to customers. So from the perspective of a store manager, cutting into that floor space to deliver experiences may not be a comfortable thought.
If floor space is devoted to experience rather than product, the question arises – how does the customer make a purchase? Impressing the customer but then being unable to fulfil the product does not make for a positive experience.
How can retailers make it work?
High street retailers could perhaps learn from their cousins in trade and wholesale. Trade suppliers such as Screwfix are able to carry a wide range of stock items through highly optimised warehouse space, coupled with a sales desk.
In a high street context, this could mean looking closely at how store room space is used, and optimising this to carry as wide a range of stock as possible.
If more of the stock is moving to storage rather than being on display, it’s essential that sales assistants and customers can access this as fast and as smoothly as possible. This is where technology has a key role to play.
Ideally, the customer should be able to experience the product, pay a sales assistant right away, perhaps on a mobile terminal, and get the item brought to them in minutes.
Or better yet, the customer could collect their purchases once they had finished browsing the store. This could even be facilitated through a mobile app or self-service collection facilities, making the purchasing process as easy as possible for customers.
Leading retailers are already delighting their customers through piloting these approaches, but it is vital to ensure that technology is fit for purpose.
When over 50% of retail employees think their technology is too slow, delivering a seamless customer experience could be a challenge.
Experiential as a seamless part of a multi-channel retail journey
Not everyone buys right away after an in-store experience. This is especially true for high value, infrequent purchases such as electrical goods. The customer may also choose to purchase online rather than return to the store.
This is where delivering the multi-channel experience is crucial. When the customer enjoys an in-store experience, then visits the retailer’s website or uses a mobile app, they should be recognised and presented with a continuation of the experience rather than starting from scratch.
It’s also important to understand how the in-store experience is driving sales & shape your business processes and incentives appropriately. Typically store managers and staff have been measured and incentivised on in-store sales, with online being assessed as an independent channel.
But if you’re relying on those employees to deliver an outstanding experience, shouldn’t you be rewarding them for all the sales they’ve contributed to – even if the transaction took place online?
Provided you have the right data and single view of the customer, this becomes a practical reality.
These aren’t simple challenges to solve and retailers must work out the right unique solutions for their customers. But for those who succeed in combining the in-store experience with seamless fulfilment and online commerce, the rewards will be immense.
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