In my last post, I referred to the customer experience as being a major part of a corporate image. I received a few responses asking me to discuss that a little more.
With the rapidly changing economic conditions, retail has had to evolve very quickly. Companies are being forced to reevaluate the way they are doing business, and more importantly, reevaluate the customer experience within their stores. Creativity is necessary to increase consumer spending.
Ikea is known for their "maze" of sales floor, that is designed to get you to "imagine" all the possibilities to decorate your entire home and office. They incorporate a powerful combination of creative merchandising, aggressive price point marketing, an easy to find sales staff and consumer psychology. They have built a successful business model entirely centered around the customer experience. From their lay-flat packaging, to their low cost food court, Ikea is the extreme model of the customer experience.
One necessary change that most retailers are being forced to make, is a significant reduction in on-hand inventory. Many retailers have watched their margins disappear as they have been forced to take deeper discounts on much more product than was planned for. Some retailers are even approaching their vendors requesting faster turnaround on product orders, as "season ahead" ordering is becoming near impossible to accurately project.
With this major change in inventory levels, addressing consumers needs/concerns has become an obvious area for improvement and innovation. I read a NY Times article that discussed the approaches of Macy's and JCPenney's to this issue. Macy's, as I mentioned in my last post, is actually asking their customers what they want in an effort to "pinpoint" customer needs and ship product accordingly, even by location ("Do it right the first time", "Work smarter not harder", the innovations are new, but the ideas have been around forever). JCPenney's is revamping their training to be more customer focused, as well as adding "product terminals" into their stores for customers to easily order out-of-stock items.
Most retailers are going to have to look at the way business is conducted in their stores. Inventory levels are not going to be what consumers have been used to for the past 10 years. Training is going to become more important than ever. Mid-level managers (District Managers/Store Managers) are going to have be more accountable and supportive than ever. It is becoming obvious in some stores that their company is in transition. This will take away from consumer confidence. A well trained sales staff that is confident in the company they represent will help the consumer feel more comfortable, and more apt to spend money. Training is something we can do today.
Innovation is something for tomorrow. With smaller inventory levels comes the idea of exclusivity. Some companies are doing pre-order lists of next season items. Corporate customer service and online shopping is getting revamped to address out-of-stock issues. Shipping methods are getting revised. There are several ideas that are getting tested. Some work, some don't. The focus however, must be about the customer experience.
To me, this is what I expect to receive as a "customer":
Clean Store - Lower inventory should make it very easy to maintain a "neat" appearance
Well Merchandised - From sizing to creativity, I should want to buy on looks alone.
Professional and Trained Staff - The desperate approach is very transparent, be professional, available, and know your product.
Clear Marketing - The "silent salespeople" actually do most of your talking!!
Corporate Awareness - Be able to be a good representative of your company. Know all procedures designed to benefit the customer.
Accurate Product Offering - Offer the product that made you successful in the first place. This economy has effected everyone, changing your line now is only going to lose valuable clients, but will also require time to establish new ones.
If time is money, don't raise your prices by wasting the customer's time! -Christopher Mead
With the rapidly changing economic conditions, retail has had to evolve very quickly. Companies are being forced to reevaluate the way they are doing business, and more importantly, reevaluate the customer experience within their stores. Creativity is necessary to increase consumer spending.
Ikea is known for their "maze" of sales floor, that is designed to get you to "imagine" all the possibilities to decorate your entire home and office. They incorporate a powerful combination of creative merchandising, aggressive price point marketing, an easy to find sales staff and consumer psychology. They have built a successful business model entirely centered around the customer experience. From their lay-flat packaging, to their low cost food court, Ikea is the extreme model of the customer experience.
One necessary change that most retailers are being forced to make, is a significant reduction in on-hand inventory. Many retailers have watched their margins disappear as they have been forced to take deeper discounts on much more product than was planned for. Some retailers are even approaching their vendors requesting faster turnaround on product orders, as "season ahead" ordering is becoming near impossible to accurately project.
With this major change in inventory levels, addressing consumers needs/concerns has become an obvious area for improvement and innovation. I read a NY Times article that discussed the approaches of Macy's and JCPenney's to this issue. Macy's, as I mentioned in my last post, is actually asking their customers what they want in an effort to "pinpoint" customer needs and ship product accordingly, even by location ("Do it right the first time", "Work smarter not harder", the innovations are new, but the ideas have been around forever). JCPenney's is revamping their training to be more customer focused, as well as adding "product terminals" into their stores for customers to easily order out-of-stock items.
Most retailers are going to have to look at the way business is conducted in their stores. Inventory levels are not going to be what consumers have been used to for the past 10 years. Training is going to become more important than ever. Mid-level managers (District Managers/Store Managers) are going to have be more accountable and supportive than ever. It is becoming obvious in some stores that their company is in transition. This will take away from consumer confidence. A well trained sales staff that is confident in the company they represent will help the consumer feel more comfortable, and more apt to spend money. Training is something we can do today.
Innovation is something for tomorrow. With smaller inventory levels comes the idea of exclusivity. Some companies are doing pre-order lists of next season items. Corporate customer service and online shopping is getting revamped to address out-of-stock issues. Shipping methods are getting revised. There are several ideas that are getting tested. Some work, some don't. The focus however, must be about the customer experience.
To me, this is what I expect to receive as a "customer":
Clean Store - Lower inventory should make it very easy to maintain a "neat" appearance
Well Merchandised - From sizing to creativity, I should want to buy on looks alone.
Professional and Trained Staff - The desperate approach is very transparent, be professional, available, and know your product.
Clear Marketing - The "silent salespeople" actually do most of your talking!!
Corporate Awareness - Be able to be a good representative of your company. Know all procedures designed to benefit the customer.
Accurate Product Offering - Offer the product that made you successful in the first place. This economy has effected everyone, changing your line now is only going to lose valuable clients, but will also require time to establish new ones.
If time is money, don't raise your prices by wasting the customer's time! -Christopher Mead
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