Guest Blog by Scott Truitt
One of the biggest challenges that brick and mortar retailers will face in the coming years (and are already beginning to face), is the challenge of competing with online retailers accessible to customers through smart phones.
Despite predictions a decade ago that brick and mortar stores would become obsolete, customers continue and will continue to shop brick and mortar stores. As much as we want the convenience and value of online shopping we still want to see, touch, and experience products before we buy them and we always will. We also want the service and expertise of store staff, and we want the tactile connection with a company’s brand.
The challenge for brick and mortar stores over the past decade has been competing with online retailers on price. That challenge is increasing exponentially with customers’ access to online information and sales channels via their smart phones right from the sales floor. Smart phone apps are already providing customers with the opportunity to scan products in the store to comparison shop for lower prices available at other stores or through online sources. So how can brick and mortar retailers compete with online retailers whose operating costs are much, much lower?
The answer lies in a 1947 movie, which you may have just recently watched: Miracle on 34th Street.
In the movie, Kris Kringle (aka Santa Claus) “puts the customer ahead of the commercial” by helping Macy’s customers to find exactly what they want, even if it means sending them to another store. As a result, throngs of customers express their undying gratitude to Macy’s and pledge to become regular Macy’s customers. Flash forward 65 years, and this becomes the strongest solution to competing with online retailers. Now, however, instead of being armed with huge books of newspaper ads for other stores, today’s store staff are armed with tablets.
One of the most interesting and dynamic developments in retailing in the past 5 years has been the development and growth of mobile POS systems – allowing store staff to research product availability, stock levels, product details, and even check customers out using mobile tablet devices. This allows staff to continue to engage customers when they are most interested in connecting with staff, get answers without walking away from customers, and capitalize on the customer’s enthusiasm by processing their sale the moment that they are most excited about the product rather than making them come to the front of the store to check out.
Meanwhile, other customers are avoiding engaging with staff and even slyly checking their smart phones for price comparisons at other stores or online retailers. This is a two-fold problem: not only are they shopping elsewhere for the lowest price while standing in your store, but they are avoiding engaging with staff while they do it, denying staff the opportunity to address questions or concerns, or establish value in the in-store experience.
What if store staff went the other way, and offered to use their mobile tablets to comparison shop with the customer or for the customer? What if they were as transparent as they possibly could be, helping the customer to find lower prices elsewhere using their mobile tablets, giving the customer all of the information that they possibly can not just about what they carry and at what price, but what the customer might find elsewhere?
What if, rather than begrudgingly accepting mobile comparison shopping as an unfortunate reality that brick and mortars are powerless to compete with, staff used that experience as an opportunity to illustrate to customers that, “Yes, it looks like you can save a couple of dollars by driving across town or by ordering it online. If you buy here, though, our product comes with X Service, Y Return Policy, Z Warranty, we can save you 20% right now by signing you up for our Loyal Customer Program, and you get to take it home now, not later. Oh, and here’s my card – if you have any questions at any time, you can call me directly and talk to a real human being.” Imagine what kind of loyal customers that would create…
Admittedly, on the surface this might sound insane – helping your customer to find a lower price at a competing store. But that’s exactly what the customers in Miracle on 34th Street thought – and yet their response was to become increasingly loyal to Macy’s for one very important reason: Trust.
Granted, Miracle on 34th Street is a work of fiction. But it has endured for 65 years because it resonates with us – as human beings, and as customers. We would all like to be treated like the customers in that movie. And the more we are inundated with shallow and insincere marketing messages, the more we value that kind of respect, understanding, honesty and trust. And we’re willing to pay more for that. We’re happy to pay more for that.
Price is just one factor in the value equation, and it can easily be overcome if you establish value elsewhere in the buying experience that is worth paying more for. So the irony is that by abandoning the old paradigm of not wanting customers to know what they can get elsewhere and instead becoming their partner in the comparison shopping experience, you create a bond of trust that makes them willing and happy to pay more with you because they see the value that you are providing for that little bit of extra money.
We all know that the internet and mobile technology is going to radically change the way retailers engage customers – we just don’t know exactly how yet. Increased transparency is certainly one answer. Who’da thunk that that answer would have been right in front of us every holiday season for the past 65 years?
Scott Truitt is a Brand Strategist and Designer specializing in Brand Development and Prototype Retail Store Design. His clients include national and international companies such as Office Depot, Nike, Costco, and Miller Brewing Company, as well as professional sports teams such as the Seattle Seahawks, Baltimore Ravens, and Pittsburgh Steelers, and regional retailers such as Aries Apparel, The Luxury of Leather, and Picasso Exotic Aquatics. For more, visit scotttruitt.com