For the past couple of years I’ve been referring to the need for retailers to reduce “operational friction” in their stores. Recently I’ve seen this expression everywhere – everyone from Terry Lundgren, CEO of Macy’s, to the search titans at Google have been talking about the need to reduce in-store “friction.”
So, what’s the big deal? What are we all talking about, and why does it resonate so loudly?
As consumers – shoppers – we all feel friction points in the shopping journey and wonder, “Why can’t this be solved, and isn’t there technology that can make this experience better?” At RetailNext we spend a lot of time talking to customers about about friction in physical stores, and when we collaborate to solve these friction points, we typically do it across three dimensions:
- Location – Can I find what I am looking for?
- Service – Is it easy to understand, try, customize, etc.?
- Payment — Is it easy to buy, ship, and deliver, and do it all on my terms?
If any of these dimensions are lacking or less than optimized, it leaves consumers disappointed and wanting more from their physical store experience. But what can retailers do about this in-store friction?
Each point of friction feels easy to solve; in fact, it feels like something that should already be solved. But when you think about thousands of stores and millions of dollars of legacy technology infrastructure – and retail staff with varying levels of training and expertise – the picture and path to a friction-free experience becomes less clear.
Below are the 3 key areas of friction I see as holding physical retail back, along with a framework for action.
If you think about the evolution of online retail, e-commerce powerhouses like Amazon, and to a certain extent even legacy retailers like Macy’s, invested millions of dollars in understanding how customers shop online and how they can make it dead easy to buy something from the comfort of their homes. I can be sorting my 3 year-old son’s fall clothes, realize he needs a few more pairs of pants, and within 2 clicks have them on their way.
It’s that easy.
But when I shop in physical stores, it’s never that easy. When I walk into a store, the only person who knows what I am looking for is me. So first and foremost, I have to find it. Yes, sales associates are sometimes there to help, but if it’s not easy to find what I am looking for, or if my size isn’t available in-store and there isn’t an easy option to get my size, or – worse yet – if the associate can find the item in her system but can’t actually find the product in the store, I inevitably think to myself, “Why is this so difficult? I should have bought it online.”
Instinctively, being in the business I am in, I also wonder what the impact to the retailer is. How many sales are lost because customers aren’t willing to wait, to dig, or to settle for something else? And how many of those lost sales turn into lost customers.
One of the biggest points of friction in a physical store is around service. Is the staff well trained and do they have the right tools and knowledge to answer my questions? Can the staff do more than simply enter a query on the company website or online (something I can do myself quite easily)? Is the staff adding value to my shopping experience, or are they just warm (and sometimes not very warm at that) bodies that seem to desire being anywhere but in the shop?
Moving beyond the staff, there are countless other service areas in retail stores that can create additional points of friction if not organized properly. Fitting rooms, returns and customer service areas, alterations, any customization offering, parts and repair, the print center, etc. are all potential friction points that hamper the shopping experience – each of these investments to make the shopping experience easier has the potential to actually let your customer down.
Mobile POS, register-free retail, buy online pick up in store (BOPIS, or if you like, ‘click and collect’ in British parlance), curbside checkout, home delivery – these are all areas of significant current investment for retailers. These initiatives are all interesting, but are they solving the problems of inefficient checkout processes and checkout queues, or are they creating new problems? If a store’s execution isn’t flawless or if it’s solving the wrong customer problem, a retailer’s money would be better spent elsewhere.
Recipe for Success: Analyze, Isolate, Activate
Early in my career as a retailer, a mentor of mine told me, “As retailers, we all cook with water,” meaning that the problems and opportunities we face are very similar retailer-to-retailer, brand-to-brand. But what we add to the water is what makes the right recipe for success across our own businesses.
The biggest questions in today’s retail kitchen are:
- What is the perfect recipe for the in-store experience?
- How do we build lasting engagement with our customers across multiple channels?
- How do we do this while faced with increasing consumer expectations?”
Of course, we all want to “surprise and delight,” and we all want “raving fans” and loyal “omnichannel customers.” But how do we get there?
Setting the newer online-to-physical players aside (they don’t have the operational scale or legacy frameworks to contend with, and in many ways their different journeys are easier), how can retailers combat these points of friction? At RetailNext, we work in a framework of Analyze, Isolate, and Activate.
Analyze the Data: Use data to understand exactly what the issues are and their impact on the business. Retail analytics has evolved considerably over the past few years, and almost any question you have about your shoppers can be answered, automatically and at scale, through data.
Isolate the Opportunity: Once you have analyzed the data, isolate the issues and opportunities. Identify specific points of friction that present opportunity, and develop hypotheses for eliminating those points of friction.
Active the Test(s): Design a testing plan that helps understand and measure initiatives to eliminate the isolated points of friction. Test fast and fail fast. Without taking measured risk, you will never know the impact your initiative can have on your business.
Retailers, and physical stores in particular, need to recognize that friction points in the shopping process are a problem. Today’s connected, empowered shopper has too many choices and alternative options, and once lost as a shopper, she’s lost for a long time – sometimes forever.
However, friction points also represent opportunity, and the quicker retailers and stores improve to a friction-free shopping experience, the quicker they’ll emerge as one of the few on shoppers’ ever-shrinking list of “retailers of choice.”
Join the #retail and #shopping conversations on Twitter @BridgetJohns & @RetailNext, as well as at www.facebook.com/retailnext.