Aug. 30, 2010 - The changes in retailing seem to be happening at a faster pass than ever. Keeping up can be a real challenge. A new word seems to be creeping into the retail vocabulary - shop centric.
I first noticed the word in reports coming out of mainland Europe, but what is shop centric all about? It is about a shift in thinking processes. It is about being less concerned about the product being sold and more concerned about providing the right experience for the consumer.
Some organizations are using other words that mean the same thing. Shopping malls are emphasizing that they are "Activity Centres" rather than places you just go to shop. Whatever word you use to describe it, the emphasis has turned to creating a shopping experience rather than just selling "stuff."
What does this mean for you as a retailer? It means that you have to focus more on the consumer and their needs and wants than you have had to do in the past. Many retailers will argue that they have always focused on the consumer, but now it has become more fashionable for more retailers to do this and as a result the competition for this space has become more aggressive.
What do you need to focus on to provide a point of difference?
My first concern is that the word “experience" is now overdone. A recent launch of an American shopping centre was heralded as a "New Shopping Experience,” and the latest marketing from Jakarta in Indonesia is "Family weekend shopping experience in Jakarta."
The trouble is not many people believe in the headline any more, for example, 56 per cent of American shoppers "cross shop" on a regular basis when purchasing a product. In other words the so-called experience has not bought customer loyalty.
There are exceptions and Starbucks, Anthropologie and Abercrombie and Fitch shoppers are good examples of consumers that are true followers due to the experience they have experienced in those stores.
Creating an experience or being shop centric means following some specific guidelines in retailing that other retailers either do not implement or do badly or inconsistently.
In 2004 Indiana University produced a report entitled "Creating the Ideal Shopping Experience" they interviewed consumers to identify what they preferred. It is not the actual results that I find interesting for today's retailers, but instead their approach and how that research technique can be adapted to any retail situation.
The report was split into five segments:
1. Must Have
The first question asked of consumers was what must a retailer provide? The answers were what you would expect. Knowledgeable staff, customer service, cash and credit card payment facilities, product availability and cashiers and people to bag your products. The challenge is if you did a similar survey in your store, what would be the must haves?
2. Should Have
This was the second question asked of consumers and the response included promotional flyers, staff having computer access to find out information, products signed, a map of the store and products individually priced. Again this may be "common sense", but I recently worked with a retailer where computer access was banned as the owner felt that the sales team could not be trusted to use the computer professionally.
3. Nice to Have
This was the third part of the survey and looked at what the consumer considered to be a bit of luxury when they were shopping. It got the consumer to think about the shopping experience and this was the core of the survey. The challenge is what would the consumer feel were the nice-to-haves in your store? This would probably revolve around extra services rather than more products.
This part of the survey focused on what you may feel is important, but your customer felt it did not make a difference to their shopping experience. Too often as retailers, we focus on the wrong things in the customer eyes and we could be focusing on the wrong areas of developing the business.
5. Prefer Not to Have
The final question focused on the things customers would prefer not to have in their shopping experience, comments like a dirty store became one of the issues in the customers mind.
As I mentioned this survey was carried out six years ago and the results would not apply to retailers today. The key issue is how would your clients complete such a survey and how you manage and implement the suggestions and ideas that are offered.
Many of you reading this article may argue, quite rightly, that you are already providing an experience for your customer base. My challenge to you is that providing an experience has now become trendy and all sorts of retailers and shopping centres are now joining the band wagon. This means that everyone in the experience economy needs to improve their game to ensure they impress their customers and provide a better experience that the retailer next door.
Customers are not only comparing the experience you provide against other retailers that do what you do, but also against other retailers.
We have found this in our own town. Six months ago the experience retailers in town on a Sunday were the local garden centre and breakfast coffee shop. Both businesses have seen a drop in town once the farmers market opened during the same time period. The customers changed shopping habits for a better shopping experience even though the product sold was completely different.
The challenge for all retailers is to improve their game. This starts by asking the customer where they feel the business fits into the experience game. You need to know your strengths, weaknesses and opportunities. Once you have done that, work with the team to improve them. You will probably find that the opportunities fall into specific groups. Most retailers find they split into customer service, services offered, merchandising and display and management issues. Create some action teams to address each area and come up with a plan to truly enhance the shopping experience.
John Stanley is WA
Entrepreneur of the Year 2009 and his business JSA is WA Small Business
Champion – Education 2009. He is an acclaimed conference speaker,
retail consultant and author. For more information on how he can help
your business grow, visit his resource-site www.johnstanleyretailguru.com.au or email
Creating a 'shop centric' experience
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