Who Owns the Shopper Experience?

Joe Skorupa
Editor at Large
Joe Skorupa profile picture
By Joe Skorupa
The danger today comes from a shopper who walks into a store as if it were a product showroom. She pulls out a smart device and begins scanning barcodes using the Red Laser or Shopsavvy mobile app. She researches specs, prices and recommendations, and then makes a purchase from a low-cost retailer. Consumers are redefining how they shop and retailers are racing to catch up. Here’s how.
In the digital age, shoppers hold incredible power in the palms of their hands, which is redefining the retailer/consumer relationship. This raises one of the biggest questions in retailing today: Who owns the consumer?
Don’t Forget about the Store
Exploring the issues surrounding this question and the best retailer response was the subject of a recent half-day workshop at the just-concluded Retail Technology Conference, held April 13-15 at the Ritz-Carlton Orlando at Grande Lakes, sponsored by Oracle.
The pre-conference workshop, titled Captivate the Customer: Marketing and Merchandising at the Speed of Retail, was led by Brian Kilcourse, managing partner of RSR Research.
Kilcourse referenced two recent quotes by prominent retailers that highlight the imperative of accurately managing the shopper experience:
“In the wireless age brick and mortar stores have to be as interesting for consumers as the online experience.” Terry J. Lundgren, president and CEO for Macy’s
“I don’t think any of us can truly comprehend the power of mobile devices. It will make the growth of retail on the Internet look glacial.” Mike George, president and CEO for QVC
Here are more takeaways from Kilcourse’s presentation:
·         95% of all retail purchases are fulfilled through the store even in the omni-channel age.
·         The biggest opportunity for retailers is to integrate store-level demand and fulfillment with omni-channel customer order generation capabilities.
·         The information asset is becoming increasingly important in retailing and what retailers do with it is causing a major shift in the traditional retail business model.
·         Making digital information assets visible throughout the enterprise is critical and to make this happen retailers need to think architecture. It is the technology department’s responsibility to bring architecture notions to your company. You may have to demonstrate projects are self-funding and therefore front-load value in the solution timeline, but it is up to you to create a portfolio framework that leads to architecture advancements.
·         Capture demand signals wherever they may be found. Retailers now have more opportunities than ever before to pull out leading indicators that point to purchase intent.
·         Retailers need to be able to understand and see into the consumer’s pathway to purchase, and this cannot be done only after a transaction has been made but should also aim to identify pre-demand signals.
Retailer Workshop
With so many challenges facing retailers today a logical question is which one do you focus on first? Retailers that tackle them one-by-one, however, risk falling into the silo trap. The best approach is to determine an overarching strategy, a 30,000-foot view, that defines who owns the consumer and leads to the deployment of logically grouped projects that give them the tools they need to do their jobs.
Retailers discussing this topic came up with the following takeaways:
·         Since collaboration between merchandising and marketing is critical there is a great need for alignment with goals and getting started. The first thing to do is share data today between these two departments that can be quickly and easily shared.
·         Another big need is to create a strategic roadmap that builds bridges to a future that is more customer-centirc in its approach to using data analysis.
·         Since this is all new-frontier territory retailers are looking for models and best practices to follow from other retailers and/or from vendors/consultants.
·         When solving the problem of who owns the customer retailers will also have to solve the problem of revenue recognition.
·         The IT department needs to harmonize innovation proliferation with the corporate vision and set priorities.
·         One of the major juggling acts retailers need to get skilled at is meshing localized assortments and pricing with the mandate to achieve universal consistency across channels. These seem diametrically opposed.
·         Marketers see the current situation as filled with promotion and coupon opportunities to grow the business, while merchandisers see these initiatives as margin erosion.
·         If your organization will take time to sort through these issues, then your best bet is to deploy an analytics project (upgrade or solution) to help discover what you don’t know. When you find this out you will have ammunition to take next steps.
·         The relationship of the store associate and the consumer is similar to the police with pistols facing criminals Uzis. We need to arm associates with weapons that level the playing field.

Why Retailers Need to Own the Consumer

According to Kelly O'Neil, product strategy director for Oracle, there are a thousand ways consumers can go from investigate to purchase. The pathways begin or end in stores or online, and they go through mobile devices, social media, third-party service providers, the contact center, e-mail, catalog and more.

To help retailers better understand what's at stake, Oracle surveyed 1,054 shoppers post-holiday 2010.  Here's what the survey found:
·        48% of shoppers use mobile devices to browse or research products and services, which grew sharply  from 27% one year earlier.
·        Just 13% made a purchase on a mobile device in 2009 while in 2010 it more than doubled to 29%.
·        33 to 54 year olds are growing faster in the mobile channel than 18 to 32 year olds
·        15% of mobile shoppers compare prices and 10% visit store websites

Recommendations from the study include: 1. Mobilize: support mobile browsing and buying of your existing website; 2. Optimize: maximize the consumer mobile opportunity; and 3. Operationalize; leverage mobile commerce throughout your organization.
To find out more about how retailers can harness the forces of change rippling through retailing today and leverage marketing and merchandising tools be sure to view the on-demand webinar Captivate the Customer: Marketing and Merchandising at the Speed of Retail

More Blog Posts In This Series