Comment: Creating a productive retail store operation

The role of the store is changing. Most consumers engage with digital at some point in the shopping journey, so when it comes to creating a retail store operation, retailers have a dual challenge to improve customer experience and increase productivity. These two objectives are not mutually exclusive. In fact, our experience shows that both customer experience and productivity can grow in equally positive ways, but only if retailers leverage their key investments – physical assets, technology and people to streamline, automate and optimise store operations. Retailers also need to provide a seamless shopping journey for customers who increasingly flip from digital channels to the physical world.

One of the key trends that we are seeing is that retailers need to view the store as an ‘experience’ centre for customers. This can manifest itself in a variety of forms from the simple and functional, such as finding ways to serve customers faster and more efficiently, to the delivery of ‘theatre’, brand engagement, colleague engagement or the ability to touch and try products.  

The latter, while enhancing brand value, typically increases costs as there is a need for enthusiastic, expert and engaged staff to support additional in-store activity. For example, Lululemon introduced yoga classes in-store to encourage interaction between customers and store “ambassadors”. Coupled with YouTube yoga videos, it creates both a physical and virtual fitness community of loyal customers who strongly identify with the brand values.

Another emerging in-store trend designed to give customers new experiences is the concept of ‘guidestores’. Customers can touch and try products in-store, but items are not immediately ready for purchase. Instead, sales staff are trained to help customers place an order for home delivery. Provided the back-end operations run smoothly, this has the potential to completely change the role of brick and mortar stores.

Other examples designed to enhance experience and improve efficiency include customer tracking. RetailNext, for example, tracks customers around the store, provides information to enable retailers to adapt layouts and merchandising to ensure ‘cold spots’ get more traffic, thereby using space more productively.

Using behaviour analytics, retailers can identify specific zones in-store and understand behaviour, exposure and engagement rates. By testing and measuring different areas and/or fixtures, retailers can optimise merchandising strategies.

Amazon’s use of Kiva robots in its warehouses has driven some retailers to question whether robotics could also work in a store environment. Several retailers, including WalMart, are trialling robotics to scan shelves and alert colleagues to gaps (which they can fill from stock held in the store warehouse) and non-compliance to planograms.

One distinctive element which stores can provide, and a digital experience cannot, is the human factor. Therefore, having helpful and engaging store staff is becoming ever more important. According to a Forrester survey, almost half of retailers saw improving the product knowledge of store staff is the number one driver for improving in-store experience.  However, we know that many store staff struggle to give advice to customers on individual products. Often, they are even less informed than customers who have done preliminary research online and often come armed with significant knowledge about the product and options available. As a result, many technology start-ups have emerged trying to solve this employee empowerment problem.

Some of the most common interactions between customers and store staff (other than payment) is based around product availability: “Do you stock this product? Is it in the building? Can you order it for me from another store? Can I get it online?” Many retailers still do not equip their store staff with the basic information they need to service customers, i.e. full access to the company website, together with complete visibility of where stock is in the store in question, in another branch or the warehouse. RFID is starting to address this problem for fashion retailers but has not yet had significant uptake in non-fashion retail.

When it comes to payments, retailers are still wrestling with the right solution. Queuing for checkouts, fumbling in a bag for a wallet, tucking away a paper receipt post-purchase – these are real sources of frustration for customers. Many customers abandon their purchase because of long queuing times.

New ways of paying are also being explored by start-ups like Curl. Once a user has registered and set-up the Curl smartphone app, the retailer simply asks for their unique username and payment is completed without the customer even having to reach for their smartphone.

In essence, creating a more productive store requires retailers to:

Siobhán Géhin, MD of Kurt Salmon, part of Accenture Strategy.