Topic: Retail Sales

Retail Top Trends 2012 : Does A Mobile App Mean No Tip?

By Bob Phibbs
This is part of a series of retail expert discussions from the National Retail Federation's Big Show in New York last week. The goal was to have a point/counterpoint discussion of some of the hot topics in retailing. Sponsored by Alert Technologies, these dialogues allowed us to interact and help you as a C-level executive look at some of the more complex issues concerning bricks and mortar stores, their employees ability to serve the customer and interactions with technology.

This interview features Ben Sprecher from Incentive Targeting and I discussing how technology can be raising the bar for customer service to unattainable heights, in particular the buy online, pickup in store movement. Here is the video to watch and an edited transcription below.

Bob: A customer who can click on their phone now to basically say, "Yes, I want my usual order in five minutes." Have we have suddenly, because of technology, set the expectation way higher than it's ever been; the chance to fall flat on your face is bigger than it probably ever has been. And the one thing that I'm hearing when people do the Best Buy or the Sears order online and pick up in-store is that they still have to get in queue with everybody else in line. It seems to be a huge issue. What do you think?

Ben: There are no isolated silver bullets in retail. Right? It's all about getting the right collection of solutions together, and the collection, not just of technology solutions, but collection of people solutions, process solutions, store format solutions, all of these things together, are what you need to do as a retailer in order to get the most out of any one of these components. So, we were using the example of the person approaching the coffeehouse, ordering their latte. If you, as a retailer, provide that capability where they can pay on their phone before they get there, they can order before they get there, and they have to wait in the same damn line, you haven't solved any problems for that person. But if you, as a retailer, say, "We have a new way to talk to our shopper in a very targeted, very personal way, in a very limited and quiet way, in a way that they respect and they want," you also need to turn around and provide the supporting infrastructure within the store to make that a great . . .

Bob: That can be a huge cost

Ben: But it can be a huge opportunity. Right? If you think about the value of being able to have that express line sitting next, the red carpet line if you will . . . so you have the long line over here, you have the red carpet line over there. And the people in the long line notice the people in the red carpet line keep showing up, picking up their coffee, walking out of the door. Every single one of those people would say, "How do I sign up for that, man?"

Bob: Dude, as a coffee guy from years and years ago, I'm telling you, you would have people livid that that happened because not all of them are going to be on their smartphone. And what happens on the day Janie forgets her smartphone to order it? Now she's got to be in that line. But she's telling the barista, "But you already know me. I'm always in the express line." I guess, that's one of the things . . .

Ben: And this is where there is that transition. Right? It's a complicated transition in that world.

Bob: Yeah, but nobody's adding staff for that. And I think - to the point of the shop online and pick up at the big boxes – management is saying, "Well, look, we already have people pick stuff up in our store anyway. Why wouldn't they just be able to use existing employees?" Which makes sense. Wouldn't you agree? I mean, if you were in your office, that makes a lot of sense - until you're the guy waiting for two hours to pickup your TV.

Ben: Right. It makes sense in terms of the spreadsheet of how many staff do I need for the store. What it doesn't make sense in terms of is, how do I make sure that particular experience that consumer has is one that not only says, oh, I'm not just in New York across the street, but in other places in the country I’ll drive a half mile out of my way, to make sure I hit the coffee shop where I can get my coffee instantly as I show up on my way in the door, with no problems. People will change their behavior for really great retailers who do really great targeted customer things for them. And the people in that long line who, the first time they see that happen get a little bit upset, the person at the front of that register can't be like, "Oh, dude, sorry, it's, you know, your problem." They need to be saying, "Oh, this is a great new program we have in place. Here's what you do."

Bob: That's not going to happen. I'm just looking at the operations behind that, especially a barista who's being pay is dependent on being tipped. So now, your best customers will be going to the express line. Talk about coming up with an unequal system in your store. It's like the haves and the have-nots. I think that's really dangerous, because I think retail is kind of a great democratizer. So, it becomes that . . . and let's face it, the statistics last week out of The New York Times was that 1% of the people are driving 90% of the bandwidth in mobile. So, it's a much smaller target than anyone's saying. I mean, if this was 90% of the people had a phone and they could do it, great, but I don't think that's not where we are right now.

Ben: The reason that bandwidth is being consumed by a very narrow group of people is because, I think, we collectively, we the technology industry, we the retail industry, we everyone have not provided the really great, compelling next generation of experiences on the phone that are so easy to use that everybody can use them. Smartphones are rolling out like crazy. Everybody is getting them. People are forced to buy the data plan. They're spending $120 a month, anyway, but all they're doing on that thing they're occasionally checking their email.

Bob: I’m often just looking at a map.

Ben: Looking at a map. Yesterday there was a great session that Cognizant ran where they were talking about building the store of tomorrow today. They pointed out that we are at the point now where mobile web browsing, minutes per day in the United States, has passed stationary computer web browsing, in minutes per day.

Bob: But what is that mean, though?

Ben: What's happening is people are shifting where they think about interacting with information, and they're starting to do it much more on their phone. You're right, there's definitely a steep curve there. There are a lot of people doing a lot and most people doing very little.

Bob: I guess my thing would be balance, Ben. I want to stay with the coffee house, because I think between that and the shop online and pick up in store is a big deal, because what I'm hearing is that it really is an integrated business but it's almost a different business if you're going to be doing the mobile with the cool technology. You really have to set it up that if this is always going to be on, then it's almost like your store has to always be on too, right? That that customer could come in, and they have to be able to have that same always on experience, and then . . .

Ben: Or have to have the right expectations set from the very beginning. Right? If that always on experience is available during rush hour in the morning and rush hour in the evening and lunch, then when you go into the application not at that time, it needs to say, "I'm sorry, you can't place your advanced order right now through this application." So it really has to be sensitive to be aware of not just the who and not just the marketing side of it, but the where and the when of each of these interactions with the shopper.

Bob: And I'll go to the next one, which is the operational issues that support it, because that's the one I think that we're missing.

Ben: And the operational issues to support it. You can't have a disconnect.

Bob: People are raving about it like, "What a horrible experience." I'm, like, "Really? You had to wait a half hour." "But I ordered online." Right? So . . .

Ben: Right. It's mis-set their expectations. They're setting the wrong expectations and not executing on it.

Bob: And even if a brand set that expectation, though, do you think a customer would listen to it? Because we customers are an impatient group. I'm talking over you right now.

Ben: If it set all the way to the very front of the experience. One of the greatest experiences I had was with the Registry of Motor Vehicles in Massachusetts. Now, I don't think anybody has ever said those phrases together before.

Bob: No. I don't think so. Any of you out there? No.

Ben: When I had to do my most recent driver's license renewal, I went and checked. I could look at each one of their locations and find the current wait time at each one of those RMVs online. I was able to change the one I was deciding to go to. That's incredible. I knew that I was heading for a half hour wait, but I knew that I wasn't heading for the hour and a half wait. Right? And so was I happy with that half hour wait? Damn straight.

Bob: The expectation was set.

Ben: Because the expectation was there right from the beginning.

Bob: That might also be interesting if you were doing the application, we're staying with the coffee house idea, that maybe it would say, "And there are six people in line right now." That would be cool.

Ben: A little camera there. You could see what's going on in the coffee shop right now.

Bob: All right. So, I think we've solved the world's problems here with this. But anything else? Final thoughts come to mind about setting the customer expectation high or low and . . .

Ben: At the end of the day, it's all about respecting the customer, about talking to the customer in a way that values the incredible intimacy of this channel of talking to them, and that is targeted to who they are, to what they buy, to where they are, to when they are. When you start thinking about saying less and saying the right things instead of saying more to everybody and the wrong things, those are the retailers that are going to win. The retailers that are going to lose are the ones who treat this like printing in the newspaper, like broadcasting on TV.

Bob: And that's the stuff that could spook them, right? That's the stuff that could spook customers, like, wait this isn't any different. You're just vomiting on me with your same stuff.

Ben: It does not take very long to totally ruin a relationship, right? But it takes a very long time to build a good one.

Bob: Excellent point an good place for us to stop.

discover-12-trends-sure-to-causesleeples

Retail Consultants featured are part of the Retailwire Brain Trust Panel

 

The 5 Shifts Brick-and-Mortar Retailers Are Making to Generate Up to 20% Higher Profits Every Month

Are you a hungry brick-and-mortar store owner who’s ready for a fresh, people-obsessed strategy? This training is for you if you want to grow your business using a powerful customer experience formula proven to make your cash register chirp.

I'm ready to win