By Ken Rosen
Our last post scratched at the implications of this shocking stat from a 10-country, Accenture study:
73% of shoppers [owning smartphones] prefer using their smartphone to handle simple tasks in-store. Only 15% prefer to interact with an employee.
[Thanks to Ian Greenleigh (@be3d) for pointing out the study during a Twitter chat (#socialmedia, #sm92).]
This stat suggests that service is no longer the driving force for brick-and-mortar shopping. Since the study notes that 48% of non-smartphone owners plan to buy a smartphone within 12 months, that “suggestion” may be worth reading again: Service is no longer the driving force for brick-and-mortar shopping.
A value-add of merely keeping products in stock to put them immediately in the hands of customers won’t pay the rent on Rodeo Drive or Stanford Shopping Center or even the Great Mall of America. Retailers must offer more than the chance to touch products.
Even more twisted, Andrew Mueller (@AndrewMueller), a frequent contributor I respect notes:
“It’s bizarre, but I would argue that online shopping is often more social than in-store.”
Now Andrew is an early adopter and big thinker, so his view is not yet mainstream, but think about his message: His personal perception of being social—connecting with other people—is greater when he is “alone” online than when surrounded by human shoppers and salespeople. If buyers’ ability to easily check whether a store has a competitive price on an item was the first whack in the head to retailers, a move for customers to see online shopping as the more “social” way to shop completes the one-two punch.
Nike responded to this trend years ago with Nike Stores. But just last year, Jeanne Jackson, president of Nike’s direct-to-consumer business, said the Niketown concept was “a little too big” and “a little too expensive.” Nike’s answer: smaller stores with the most desirable (and profitable) products.
Apple, of course, has done wonders with Apple Stores. But don’t forget a key Apple move when opening the stores was crushing the fledgling Apple clone manufacturers (remember that little chapter?). Even with the staggering value add of Apple stores beyond inventory—from enthusiastic knowledgeable sales people to the Genius Bar for personalized help—they had to control the channel to make the economics work.
As a retail executive, you need to rethink your value. You need to understand your customers deeply: not just “a good product and a fair price,” but intense understanding of what customers crave and fear…and how the buying channels feed or exacerbate those drives.
Is there any data to calm retailer concerns and offer comfort the status quo will stay for a while? Maybe. 54% of respondents worry that using smartphones will erode their privacy. So retailers could depend on privacy concerns to keep driving people into their stores.
But I wouldn’t recommend it.
Takeaways (carried over from Part I, but we hope read with even more urgency)
- Strip away your assumptions about the value you offer customers…and actually ask them.
- Your customers increasingly have “the internet in their pocket.” Embrace that and find ways to engage (and when possible co-opt) these new data sources.
- Assume for a moment your sales people are useless to customers. How can you change that?
