Consumers are looking for something new – a great experience to go with their buys. Meet the businesses who are driving sales by designing new experiences for customers.
Australian consumers are proving to be a tough sell. Despite job growth and wage increases, retail spending was flat in 2010. Consumers are still spending, but their preferences are memorable experiences over the simple accumulation of more goods.
Consumer research conducted recently for credit card operator, Visa, suggests that retailers can adapt to this change in a number of ways: by providing entertainment, education or expert advice in stores, by creating a different environment to the homogenous shopping mall experience, and by using the internet for superior communication and engagement.
“The global financial crisis has not meant a complete retreat from premium products and services, but more of a reframing,” says Judy Shaw, Visa’s acting director of corporate relations. Above basic consumerism, she says, there’s a desire for feeling and learning.
Tapping into that desire presents a challenge, but providing consumers with an enhanced shopping experience doesn’t need to be expensive or time-consuming for retailers, big or small, online or offline.
Selma Mehmedovic, a research analyst at Monash University’s Australian Centre for Retail Studies (ACRS), says retailers are turning to “shoppertainment” to keep customers coming back. As an example, she cites Sportsgirl, whose Chadstone, Victoria, store now has a lounge area with a DJ and a styling studio.
Harvey Norman has a food school at its Alexandria store in Sydney, with a program of classes run by well-known cooks. It provides customers with something more than the usual shopping experience and gives the retailer a fresh way of promoting its kitchen appliances.
Australian online shoe retailer, Shoes of Prey, offers customers an enhanced shopping experience by inviting them to design their own shoes using tools, materials and expertise provided on the company’s web site.
“The actual design process is very quick, but most customers will spend quite a bit of time on it,” says Michael Fox, the company’s director of operations.
Executive director of the Australian Retailers Association Russell Zimmerman says, “Retailers are looking for ways to make the customer feel good. This is about customer loyalty and customer care. “You even get retailers who email or phone the customer when they have new stock,” he says.
Communication and efficient service cannot be underestimated when creating an enhanced customer experience, both online and especially in store. Even though increasing numbers of consumers are buying online, in-store shopping is still preferred by most, according to the ACRS.
“People still love that tactile experience; they also like having that interaction with the sales assistant,” Mehmedovic says.
Show your expertise
Brian Walker, the chief executive of the consulting group Retail Doctor, says retailers benefit by demonstrating some expertise. “If you look at a store like Athlete’s Foot, they offer running shoes – a simple product. But they add expertise, knowledge and have highly developed skills that personalise their customer service. That is what stores need to offer.”
Customers also like to be able to interact with the products, as it allows them to feel like they control the shopping environment.
Letting customers try your products before buying them, and do so at their own pace, is one of a number of trends relevant to Australian retailers identified this year by US online retail publication <Inside Retailing>.
Create a different environment
Zimmerman agrees: “There will always be a need for shops... for the experience, and to touch and feel.”
Bricks-and-mortar businesses can do a number of other things to enhance the in-store purchasing experience. And these need not necessarily be time-consuming or expensive.
Music, lighting, a coffee machine, water, and even a kids’ play area, are all relatively inexpensive improvements that can be controlled by the retailer, and can add to the shopping experience for the customer, Mehmedovic says. “Think of something small and creative but of relevance to the customer.”
Gilbert Rochecouste, principal of Victorian design consultancy Village Well, says the combination of a small number of large shopping mall operators and increasing level of retail franchising has turned shopping into a “same-same” experience. Consumers find this sameness boring and are eager to find something different. Rochecouste cites the popularity of local growers’ markets as an example.
Build an online presence
A web site doesn’t have to be about selling online. It can be about demonstrating creativity. For bricks and mortar retail businesses, it can simply provide a way of telling customers about their products.
ACRS research has found that consumers who researched product information on the internet before buying in store spend significantly more across a range of categories, including beauty and skincare and DIY hardware.
Most consumers use online search engines and retailer web sites for their research, but printed and online catalogues are also important, the research shows.
As an online retailer, Shoes of Prey has also taken advantage of the social media phenomenon by setting up a Facebook page.
“Facebook works really well for us,” Michael Fox says. “We have over 8000 fans, and there’s lots of discussion going on there.”
However, as ACRS’s Mehmedovic says, “It’s not enough just to have a Facebook presence ... you have to engage with your followers.”
Customers will think they are being ignored if you don’t respond to their content, she says. This means you need to have the time and resources to manage social media as a marketing tool.
Engage the customer
Direct engagement with customers is known as experiential marketing. As well as the creation of branded content such as a YouTube video, it could also be an event, a sampling program, a roadshow or a PR stunt.