In an age where a variety of digital tools are at a customer’s fingertips, Chris Sanderson, cofounder of The Future Laboratory, believes that customer service will become even more important as the differentiator.
“Before your customers even visit your store, they probably looked you up online, they’ve checked you out on social media, they’ve read some reviews, they’ve done some research and maybe decided where they can get your brand cheaper.
“If you are not a vertically integrated retailer, they checked your price against your competitors and started to make some interesting decisions.”
Sanderson said the U.S. online market will account for more than 20 percent of all retail sales in 2017, and mobile will account for more than 70 percent of total e-commerce in 2017.
“Mobile continues to be hugely important, but what we’ve got to understand is the underlying truth that it’s all about bricks-and-mortar,” he stressed. “That’s where the strength continues to lie in retail.”
He advised retailers to abandon the omnichannel structure as it’s “not really relevant” anymore, and to think of their businesses as a single entity.
“Customers don’t think about who runs the web site, the mobile business, the store business and the franchise business. For the customer they are all one business,” he said. “We need to break down the walls that we have created within our own organizations, get rid of those silos and just put the customer first in terms of what we do.”
He believes that merging physical and digital channels into a “phy-gital” experience would result in increased spend and loyalty because, “the customer who engages with your brand in both a physical and digital aspect, is ‘phy-gital’ in their engagement. They tend to spend [four times] more with you. That’s the simple fact we begin to see.”
To succeed, stores need to become “embassies” where a customer can experience the brand, guided by well-trained “ambassadors.”
He used Sneakerboy as an example. The retailer’s stores carry no stock, although customers can try on, and order sneakers. The retailer distributes all purchases from a centralized warehouse within 24 hours.
“That’s what being an embassy is all about — it’s about having this presence that is greater than what is actually within that space, and the idea of service isn’t just about the store experience, it’s about the experience that you have with the ambassador.”
He added that capitalizing on how customers use their smartphones in-store is important, as is making use of moving images, especially with shoppers under 25 who have all grown up with smartphones.
“They have become so used to the notion of a moving image, and one they can interact with, that if you put up material that does not move, you are basically walking into a mausoleum.”
Predictive technologies and artificial intelligence will also play a big role in the future of successful retailing, with 70 percent of U.S. Millennials and 62 percent of U.K. Millennials saying they would like retailers to use A.I. technology to show them more interesting products.
The balancing act between integrating technology and maintaining a human element in customer service is being driven by three trends, he said: invitation-only clubs, online hotlines and automated service.
As automated service evolves, he said, more than 50 percent of retail jobs are expected to disappear over the next decade, forcing fashion retailers to focus on human contact. For brick-and-mortar stores, this will mean an investment in staff who are able to engage with the product and educate the shopper.
“So maybe what this means is we’ll start investing a lot more in what retail actually is supposed to be about, creating great store experiences that encourage the customer to buy.”