“What’s Your Email?”

Why Stores Should Not Become an Acquisition Channel for E-commerce.

The threat to retail is real.  In 2017, Sears, JC Penney and Macy’s alone have closed 550 stores in the US.  Amazon now has a 90% market share in 5 product categories.

But the solution for retailers is not to push their sales towards online channels.

The online menace

With the rise of e-commerce, retail has gone through a first transformation, and reacted in several ways to protect itself from online threats.

Retailers such as BestBuy quickly got tired of seeing customers try products in their store, and then search online to find the best price. So, they started matching their prices with online sellers to stay competitive.

To battle online competition, retailers also make the most obvious choice: create their own online shop. Unfortunately, digital is not their core competency, and retailers’ online stores often mimicked the in-person experience: browse through the product selection, make some choices, pay and get the products. With this first transformation, retailers recreated the in-person experience, but online.

Retail as an acquisition channel for online

Retailers first built their virtual customer journeys to replicate store processes. They slightly adapted these processes to account for specificities of e-commerce: tracking of orders, shipping policies. The emphasis of the newly created online experience was placed on convenience and efficiency.

Somewhere along the way, a reverse transformation occurred: the fascination with pure players of e-commerce as well as cost pressures have pushed retailers to replicate components of the online experience back into the physical store.

Some of these changes are great of course. If an item is not available at the store, you can get it shipped to you directly, or immediately know which other stores carry it.  The best retailers are blurring the lines between physical and retail experience: when checking in to an Apple store for support, customers can give their name or Apple ID and all relevant information will be at the genius’ fingertips.

But some other changes come at the expense of the customer experience.  Too often, retailers ask from customers without giving anything first. Here is a seemingly inconsequential example of this:  often at check-out at the counter, the salesperson will casually ask: “What is your email?”.  Giving out one’s information is presented as a necessary step, but clearly, it is not. This example is a case of a retailer demanding the customer’s attention, instead of inspiring the customer to give their attention. There is a fundamental difference here.

Of course, the reason why retailers use such cheap tricks is obvious: in our noisy world, retailers are looking to build as many channels as possible to communicate with customers, and emailing campaigns are much cheaper than billboards or Facebooks Ads. But the result is an underwhelming customer-retailer interaction.

And effectively, retail is used as an acquisition channel for e-commerce.

A Lesson from Online Brands

Yet, with all these major changes over the past 20 years, the most interesting transformation of retail is happening right now, and it is truly fascinating.

Traditional retailers are busy trying to find a solution to the so-called retail apocalypse through online efficiencies. In the meantime, the digital kings of e-retailing, the masters of amazing customer experience, Amazon, Bonobos, Warby Parker, Casper, and many others, are now re-shifting their attention into the material world. They are not just opening doors. What they are really doing is building physical representations of their core brand values, to enable customers to experience the brand even more deeply.

Bonobos has opened Guideshops, not stores: they want customers to feel special, and invite them to book a personal appointment with a stylist. They want customers to know the possibilities, and use their physical inventory for fittings and engagement, and then tap into their much broader online inventory for order fulfilment. Customers don’t need to leave the store with heavy bags in their hands: what’s the point?

Casper’s Sleep Shops are the exact opposite of Mattress Firm stores. They are comfy, playful and exciting. They are experiences that help educate customers on the importance of sleep and the quality of Casper products. There are no salespeople: store employees are not commission-driven.

The point is that retail can no longer just be about selling products, it must be about creating a deep and meaningful experience with customers. Bonobos and Casper get it: engaged customers come back, they recommend your products around them, and they are less likely to price-shop.

The Challenge ahead

Retailers have been on the defense for a long while now. It is high time for them to go back on the offensive.

The major threat to traditional retailers is not behind us, it is ahead. The challenge is that despite broad physical presence, they often struggle to be able to really connect with their customers anymore. So, traditional retailers are facing their major challenge to date: they need to completely truly refocus on the brand experience that they provide to customers, instead of merely thinking about sales effectiveness.

Meeting the ever-increasing expectations of customers is a tremendous strategic and operational challenge, but traditional retailers must realize that their stores and their front-line employees are incredible assets to bringing wonderful experiences to customers and to connect with them, personally.

Online masters are clearly seeing this opportunity.

How to implement your omnichannel strategy?

Leave a Reply