Many retailers are continuing to close stores, filing for chapter 11 or worst yet, going out of business. The reasons vary, but most commonly is there is too much debt brought on from either too many under-performing stores or too aggressive loan terms when going private. The Internet, namely Amazon, has taken a big chunk out of sales, fewer people shop in-store and younger people don't buy as much as the older generations did. However, with all that said, the most significant problem of stores losing sales remains with retailers not addressing the needs of today while too many of them are chasing after unproven and possibly not a necessary technology of tomorrow.
FACTS
In today's retail environment according to a recent report by Axonify, 32% of retail employees say they do not receive any formal training, which is higher than any other industry surveyed! According to Retail Dive, most retail employees receive no real training. Does that make sense? How many sales do retailers lose because the customer who has taken the time to come into the store has a bad experience with an untrained store associate and leaves unhappy, without making the purchase? Most retailers talk a good game about how vital, adequate training is, and yet many of them only provide at best 10 hours of training time. In fact, in many retail environments where the staff is very thin, it's no surprise when the new hire is on the floor the first day because the store has no coverage. How unfortunate is it when we hear that standard line coming from an embarrassed employee who when asked a question they cannot answer responds with, "I'm sorry I don't know, today's my first day?" We've all had that happen, and although we may feel bad for the untrained associate, we are never happy with the store for putting that person and the customer in an unfortunate position.
Yet, rather than invest in a few dollars for hiring more staff and most importantly providing effective training, each day, we read about another retailer investing in some unproven technology that will one day do amazing things. That may be ideal for their business but what about the customer? Will all the AI technology create the positive in-store experience or aren't humans capable of that as well? Don't get me wrong, I love technology, and I find myself very excited when trying out new devices, software, and services that make my life easier. I enjoy them even more when I have downtime to play with them. But until we can build an android-like Data from Star Trek, which is many years from now, most of the technology that retailers invest in today will fall short of its expectations. The result is that retailers will continue to lose more customers and more sales from poor store performance.
COMMON SENSE
Ask yourself this question: why does a customer go to a store? Usually to find or buy something. Yes, they could be browsing, or they could be looking for the item to see it in real life with the intention of going home and buying it elsewhere, or they could be looking for the item for purchase immediately in the store. So, let’s address each possibility and how technology is not the solution.
The customer enters the store just to browse. First, the customer received no acknowledgment from store associates who are either engaged in tasks or personal conversations, which is common when there is no training that explains why associates need to engage customers. The customer walks around the store and leaves without making a purchase. That's what we expect. Now, the same situation happens with a well-trained associate. In this scenario soon after the customer was looking for an item, the associate greets and welcomes the customer to the store. They get into a conversation about the item the customer was looking at, the associate answers a few questions and shows the customer some competitors’ products with different features. Suddenly, the browser decides to make a purchase and is now a buyer. How is technology going to do that?
The second possibility is the customer interested in seeing the item before going home and buying it online. The customer finds the item, reviews the product features and the price confirming it's a few dollars less on Amazon and leaves. Now, what if in the same situation while looking at the item, the customer is approached by a friendly well-trained associate, and they begin a conversation about the item. The associate knows the item is being sold for a few dollars less on Amazon and tells the customer, "You may have seen this on Amazon for a few dollars less." Of course the customer, who is slightly embarrassed, doesn't admit it. But the associate knowing that the model sold on Amazon, that although looks identical to the one in-store, has somewhat less quality and she points out the differences of a few extra features the Amazon model does not have. Now the associate has the customer thinking, and soon she realizes that she would rather have the additional features and decides to purchase the item at that moment in the store. How is technology going to do that?
Then, of course, the most common scenario is the customer comes into the store to buy an item. If left completely alone and the customer finds what they are looking for, there is a good chance they will make the purchase. Of course, if they can't find the item or anyone to assist them, they will leave. But what if the well-trained associate greets and engages the customer? Now we have all kinds of upselling possibilities where the associate recommends more or other items after the associate learns more about the customer's needs. And in both cases, there is the opportunity to add on to the sale with accessories to further help the customer with their needs. And lastly, of course, is having a chance to share something unrelated to the customer such as new items or a current in-store promotion leading to an even higher sales purchase. How is technology going to do that?
THE TREND
There is nothing wrong in investing in technology especially if has proven value to your business. But retailers who have more competition than ever today can't afford to abandon some of the basic principles that will always lead to sales, and that starts with having enough associates at the store level and most importantly making sure they are well-trained. I always say, "There is no one or nothing more important than the customer." The customer must come first, and we need to address ALL their needs. Until we have Data, no technology will do that!
Art Suriano
CEO of The TSi Company
FACTS
In today's retail environment according to a recent report by Axonify, 32% of retail employees say they do not receive any formal training, which is higher than any other industry surveyed! According to Retail Dive, most retail employees receive no real training. Does that make sense? How many sales do retailers lose because the customer who has taken the time to come into the store has a bad experience with an untrained store associate and leaves unhappy, without making the purchase? Most retailers talk a good game about how vital, adequate training is, and yet many of them only provide at best 10 hours of training time. In fact, in many retail environments where the staff is very thin, it's no surprise when the new hire is on the floor the first day because the store has no coverage. How unfortunate is it when we hear that standard line coming from an embarrassed employee who when asked a question they cannot answer responds with, "I'm sorry I don't know, today's my first day?" We've all had that happen, and although we may feel bad for the untrained associate, we are never happy with the store for putting that person and the customer in an unfortunate position.
Yet, rather than invest in a few dollars for hiring more staff and most importantly providing effective training, each day, we read about another retailer investing in some unproven technology that will one day do amazing things. That may be ideal for their business but what about the customer? Will all the AI technology create the positive in-store experience or aren't humans capable of that as well? Don't get me wrong, I love technology, and I find myself very excited when trying out new devices, software, and services that make my life easier. I enjoy them even more when I have downtime to play with them. But until we can build an android-like Data from Star Trek, which is many years from now, most of the technology that retailers invest in today will fall short of its expectations. The result is that retailers will continue to lose more customers and more sales from poor store performance.
COMMON SENSE
Ask yourself this question: why does a customer go to a store? Usually to find or buy something. Yes, they could be browsing, or they could be looking for the item to see it in real life with the intention of going home and buying it elsewhere, or they could be looking for the item for purchase immediately in the store. So, let’s address each possibility and how technology is not the solution.
The customer enters the store just to browse. First, the customer received no acknowledgment from store associates who are either engaged in tasks or personal conversations, which is common when there is no training that explains why associates need to engage customers. The customer walks around the store and leaves without making a purchase. That's what we expect. Now, the same situation happens with a well-trained associate. In this scenario soon after the customer was looking for an item, the associate greets and welcomes the customer to the store. They get into a conversation about the item the customer was looking at, the associate answers a few questions and shows the customer some competitors’ products with different features. Suddenly, the browser decides to make a purchase and is now a buyer. How is technology going to do that?
The second possibility is the customer interested in seeing the item before going home and buying it online. The customer finds the item, reviews the product features and the price confirming it's a few dollars less on Amazon and leaves. Now, what if in the same situation while looking at the item, the customer is approached by a friendly well-trained associate, and they begin a conversation about the item. The associate knows the item is being sold for a few dollars less on Amazon and tells the customer, "You may have seen this on Amazon for a few dollars less." Of course the customer, who is slightly embarrassed, doesn't admit it. But the associate knowing that the model sold on Amazon, that although looks identical to the one in-store, has somewhat less quality and she points out the differences of a few extra features the Amazon model does not have. Now the associate has the customer thinking, and soon she realizes that she would rather have the additional features and decides to purchase the item at that moment in the store. How is technology going to do that?
Then, of course, the most common scenario is the customer comes into the store to buy an item. If left completely alone and the customer finds what they are looking for, there is a good chance they will make the purchase. Of course, if they can't find the item or anyone to assist them, they will leave. But what if the well-trained associate greets and engages the customer? Now we have all kinds of upselling possibilities where the associate recommends more or other items after the associate learns more about the customer's needs. And in both cases, there is the opportunity to add on to the sale with accessories to further help the customer with their needs. And lastly, of course, is having a chance to share something unrelated to the customer such as new items or a current in-store promotion leading to an even higher sales purchase. How is technology going to do that?
THE TREND
There is nothing wrong in investing in technology especially if has proven value to your business. But retailers who have more competition than ever today can't afford to abandon some of the basic principles that will always lead to sales, and that starts with having enough associates at the store level and most importantly making sure they are well-trained. I always say, "There is no one or nothing more important than the customer." The customer must come first, and we need to address ALL their needs. Until we have Data, no technology will do that!
Art Suriano
CEO of The TSi Company
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