Why in-store experiences are retailers’ best antidote to inflation
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There are countless ways to tell the impact of inflation on shoppers (and retailers, by extension). While consumer spending on services increased in February 2022, spending on goods declined. 72% of US shoppers are spending less because of inflation.
While you might think this is based on the first positive returns of the year, retailers now need to get down to business to ensure they survive a likely inflationary downturn. Even before the recent acceleration, the consumer price index (CPI) was rising at an unprecedented rate. Shoppers have little money to spend, and the reality of retail will catch up with these trends, if the effects haven’t hit your organization already.
We released our 2022 State of Consumer Behavior report precisely for times like these. It is essential that retailers and consumers are on the same page, because the well-being of both parties depends on it. With our report, we identify several insights that can help retailers better serve customers and position their organizations for long-term success, regardless of economic conditions. Among other findings, we found that consumers need exceptional in-store experiences more than ever. Continue below to see what we found:
Fact #1: Positive in-store experiences are key to brand loyalty
It’s important to highlight how important in-store experiences have become. As many retailers know, brand loyalty seems more like a pipe dream than a realistic possibility today. Retailers routinely spend exorbitant sums on elaborate customer loyalty initiatives. Yet we found that 29% of shoppers are switching brands more often than ever before.
It turns out that the best way to retain your customers is to deliver consistently great in-store experiences. 55% of buyers switched brands after just one poor in-store experience. Conversely, 83% of shoppers are likely to return to your store after Well in-store experience. The data couldn’t be clearer: in-store experiences have a direct impact on your brand’s bottom line.
Related: The 6 essential in-store experiences your customers want to see
Finding #2: Product selection and customer service define the in-store experience
Products and service are fundamental elements of the in-store experience – it’s no secret for retailers born the day before yesterday. Yet organizations can lose sight of how much the typical customer values product variety and customer service.
According to our results, 31.9% of shoppers judge an in-store experience primarily by the variety and availability of products displayed in a store. 26.4% of shoppers find that the quality of customer service defines the in-store experience the most.
Supply chain shortages have forced retailers to get smart about how they acquire, stock and display items. Strong inventory management systems have never been more important. Additionally, McKinsey recommends purchasing and stocking the most in-demand items in the highest quantities, while trying to eliminate third parties from the supply chain as much as possible.
Some retailers may also not realize how much customers value quality service. Some may also not realize how big the gap is between brands that make customer service a priority and those that miss the mark.
Brands like Tommy Bahama, Brighton, Nordstrom, WaWa and Bath & Body Works have left a memorable impression on service-minded shoppers. Clearly, these brands have inspired their employees to put the customer first and positioned those employees for success.
WaWa is a good example of how technology can improve a customer’s perception of positive customer service. Ordering at WaWa’s beloved fresh produce markets is a highly automated process, with shoppers able to arrange their orders via touchscreens or on the WaWa app. This allows employees to focus on the most important part: getting food to customer specifications.
Many retail brands are ripe for such automation. Because customers place a high value on service, making self-service options available could provide the boost your brand is looking for.
Related: How Customer Experience Defines Any Business’s Success
Finding #3: Engaging In-Store Experiences Attract New Customers
When we asked customers what would get them to try a new store, 21.7% said “experiences aimed at generating pleasure” would convince them. The only answer more popular than this was “to offer exclusive in-store discounts”.
Pennsylvania-based clothing brand United By Blue has made a name for itself by installing cafes in its stores, offering local dishes that fit the brand’s image of a clean life. By offering shoppers the option to grab a drink or a full meal during their shopping spree — or even independent of shopping — United By Blue imbues a laid-back vibe that says “stay a while.”
Although you may not consider a coffee to be the the most exciting in-store experience is more than enough to win over new customers who appreciate such attentions. Given a similar product selection, would you as a shopper choose to shop at the store that has delicious coffee or coffee, or one that doesn’t?
This is just one example of the many ways you can think outside the box to attract new, loyal customers to your stores.
As consumer tastes change, many things stay the same. Shoppers still want what they’ve always wanted: fair prices, associates to answer their questions and direct them to quality items, and exciting new experiences. However, the way retailers respond to these wishes has certainly changed.
Brands have ventured further outside the box, delivering bold experiences and embracing new technologies to deliver the service and positive experiences customers desire. With self-service kiosks and other tools that relieve employees, employers can assign their employees to exciting new features of their store, like coffee, for example.
Organizations that continue to combine the latest technologies with innovative service and marketing approaches stand a good chance of weathering even the toughest economic times.
Related: Let’s Get Personal: Using Technology to Improve the In-Store Customer Experience