The following is a guest post by Michael Klein, director of industry strategy and marketing for Adobe. The views are the author’s own.
Imagine you‘re running late to your friend’s birthday party. Suddenly, you realize you‘ve forgotten a present. Oh no! Amazon Prime’s 2-day shipping can’t save you this time.
Fortunately, Target has you covered. As of last spring, customers can purchase items using the Target mobile app, and in less than an hour, pick them up outside their nearest Target — without setting foot in the store. At stores that piloted this “Drive Up“ program, orders increased 10% in less than six months.
Brick-and-mortar brands would be wise to follow Target’s lead and bring the convenience of online shopping to their physical stores. In other words, it’s time for retailers to start selling great experiences, not just great products.
Why customer experience matters
If brands deliver lousy customer experiences, shoppers will quickly defect to rival retailers. More than nine in 10 customers say they won’t continue to patronize a company that has poor customer service, according to a Glance report.
By contrast, when brands offer great shopping experiences, they cement customers’ loyalty and guarantee themselves future sales. More than half of consumers would dish out more cash for a brand that guarantees excellent service. Brands that prioritize the customer experience grow revenues up to 8% faster than their peers, according to Bain & Company.
The retail revolution has begun
Retailers are already striving to make the shopping experience more seamless and convenient. In a survey from last year, over half of digital senior retail managers named “experience management” one of their top three marketing priorities for 2018. Those same retailers believe that by improving the customer experience, they’ll be able to differentiate themselves from their competition.
Consider how cosmetics company Sephora has embraced the customer experience revolution. As Amazon began to gain market share in the cosmetics industry, Sephora realized its in-store experience needed a digital makeover. According to Bridget Dolan, Sephora‘s senior vice president for Omni Experience and Innovation, cited in a CB Insights report, “Consumers are looking for retail stores to be creative spaces. They are looking for experiences.”
So Sephora rolled out its Beauty TIP Workshop program, which outfits stores with iPads and free WiFi so that customers can access digital beauty tips. The brand more recently launched an in-store 3D augmented reality mirror that lets shoppers virtually try on different lipstick shades. In part thanks to its in-store experiences, Sephora has maintained its position as the globe’s top specialty cosmetics retailer.
Or consider athleisure retailer Lululemon‘s decision to help facilitate customers’ active lifestyles.
The company’s Manhattan store now features a concierge that helps customers find local yoga instructors. Several locations even offer yoga classes in-store.
While other retailers fall behind online sellers, Lululemon’s revenue jumped over 20% in the second quarter of 2018, exceeding financial analysts’ expectations.
Experience customer-focused retail
How can brands follow Sephora and Lululemon’s lead?
They can start by making the purchasing process seamless and consistent. Today’s consumers expect marketing material to be synchronized across a company’s website, mobile app, and in-store offerings. A survey of senior retail leaders found that 25% are already prioritizing consistent messaging across all forms of marketing.
Customers also want to be treated like individuals, not numbers in a marketing database. With each purchase, click or login, customers reveal information about their shopping preferences. Artificial intelligence helps brands quickly convert those reams of data points into perfectly personalized experiences — even in-store.
For example, automated digital assistants can check in-store inventory for a customer’s size and report back to employees on the floor wearing earpieces. Outsourcing routine tasks to AI gives retailers more time to make personal connections with their customers.
Retail has become an experience game. To keep up, brands need to revolutionize the “quick trip to the store.”