Today, it doesn’t seem as if retailers are taking the time to see if the technology they are investing in is going to be right for their business and most importantly, if customers even want it. Instead, they are chasing after new and unproven technology, much of which is still on the drawing board or not perfected. Rather than listening to their customers, retailers are looking to the tech companies. Moreover, they are using survey data provided not from their customers but from the very companies who sell the technology, and there is no doubt that data is often compromised.
With the billions of dollars that retailers are forking over to tech companies, the fact is that when shopping in most stores today, not much has changed. Moreover, because of how many retailers are sacrificing needed in-store investments in favor of unproven technology, the only sure outcome is they are losing customers and most importantly, they are losing sales.
Inaccurate Technology Research
Article after article shows high percentages of customers who are screaming for technology in-store and how they refuse to shop without it. According to Deloitte, 93 percent of consumers use their phone while shopping. The problem with that statistic is it implies that customers use their phones for shopping when in reality, they are not.
Walk into any mall or store and look at customers. Many shoppers are holding their phones, some are texting, some are emailing, and some are engaged in a phone conversation, but almost none of them are using their phones to check out competitors’ ads, prices or products. Moreover, for the small percent that may use their phone for a comparison elsewhere, it’s more common for big ticket items and not a pair of jeans or sneakers. Too many retailers are spending significant dollars chasing after technology, a lot of which is still in development in hopes that when implemented customers will flock to their stores thinking that is what the customer wants. Mobile pay is okay and having coupons, rewards and other promotional offers on your phone is a plus, but the idea that the purchase process will only take place when the customer can do everything on their phone while in the store is absurd and too many retailers are falling for the trap.
These investments in unproven technology are coming at a significant cost. Most stores today are not providing the “experience” the customer wants, and that is costing sales. Walk into the retail chains that have been around forever like Jo- Ann Fabrics, Michaels, Kohl’s, J C Penny, Best Buy, Macy's, American Eagle Outfitters, Aeropostale or Express, Books-A-Million or The Paper Store and ask yourself, “what is different today than a few years ago?” The answer: not much, if anything.
The store designs have not changed much. No blaring technology has taken over. The most significant change regarding technology in most cases is probably an updated POS system. We still see associates doing physical tasks; there are still paper signs, (sometimes handwritten) most stores are still playing music and the overall experience is no different from what it was a few years ago good or bad. So, what’s all the buzz?
Technology is Expensive
Read about how many retailers are investing considerable dollars in the development of the latest technology that is supposedly going to revolutionize the retail industry. From AI to robotics, there is something new almost every day. Recently, Kroger was in the news for partnering with Nuro to design and build a self-driving vehicle to deliver groceries. Can you imagine how much that costs? We haven’t even mastered self-driving cars, and it will be years, many years before we do. Then those manufacturers will have to pass all the requirements for 50 states and all local municipality approval. Kroger hasn’t invested any money into the project as of yet, but Nuro is planning to test the vehicle soon and no doubt even if money isn’t involved, Kroger’s time and some human resources will be. Shouldn’t those dollars go into creating a better in-store experience? Wouldn’t that do more for sales? Read Kroger customer reviews, and you would have to agree.
Retailers Today Forgot About Effective Branding
While today’s retailer is chasing after technology, they have also lost sight of who they are and what makes them unique. Effective branding would attract customers and create the desire for them to shop. For example, walk into any mall and imagine taking the store signs off the entrances of apparel stores. If you did, could you tell them apart? There is too much “me too” today with retailers chasing the competition with a “me too” mentality. However, have no fear, because tech companies have done such a great sales job they’re convincing retailers they’ll solve that problem too with analytics and personalization. Well if the customer isn’t interested in what you’re selling, all the data in the world isn’t going to change that.
Brick & mortar retailers today have tremendous opportunities to compete with e- commerce businesses. Buy online and pick-up in the store is becoming very popular for many retailers and it is smart because it gets the customer in the store. However, many retailers fall short because when the customer comes into the store to pick up the item, the retailer has nothing in place to entice the customer to pursue unique offers that would lead to more sales. In fact, too often the picking up process is too tedious because the manager of the store forgot to have someone covering the Customer Service/Pick-Up Orders station and the customer has to walk around looking for someone to help them.
Retailers today need to take a step back and look at the big picture. First, stores are not going away so don’t abandon the needs of yours. One can easily see proof of this when looking at all the e-commerce retailers opening stores. Why? Because almost 90% of all retail sales today are still made in-store! Second, the brick and mortar experience should be driven by the human experience. E- commerce companies cannot have humans interact with customers, but retail stores can with well-trained store level associates. Invest in staff and training and watch how sales increase. Third, figure out what makes your brand unique and promote it. Stop chasing after everyone else and let them be the one chasing you. Look at the success of companies like Apple, Starbucks, Wegman’s and currently Best Buy who have built a brand that customers respond to positively and frequently. Regardless of what you sell, find your niche and focus on it. Make sure you push your brand everywhere you promote your business including your website, ads, and in-store marketing. Become a brand that customers can and will identify with and eagerly give you their business.
The Sales Are Waiting For You
Think twice before you sacrifice the needed funds for your stores to chase after some unproven technology. Ask yourself, “Do I want more sales, or would I rather lose business developing something I may never use?” The answer is pretty simple, but retailers need to act now. Our economy has shown substantial improvement these last couple of years and each day it is getting stronger. Store and mall traffic is also beginning to show some signs of growth depending on the store, mall, and location. Invest in the stores you have and don’t be left behind because you put money in the wrong place.
Now is the time to act and lead before your competitors do.