In this guest post, Hemaka Perera (pictured below), the director and retail commentator at The Warranty Group, says things need not be grim for bricks and mortar retailers if they can leverage tech and aftercare services to compete with Online…
While bricks and mortar retailers struggle to compete with global pure-play online retailers such as Ebay on price and convenience, there are a few areas where online retailers are still finding it difficult to match physical stores.
Human connection, immersive and interactive experiences, as well as pre and aftersales service remain key differentiators. Increasingly bricks and mortar retailers are looking for innovative ways to capitalise on their competitive advantage to enhance the in-store experience and build long-term customer loyalty.
Merging the physical with the digital
Interestingly, a recent report by the Commonwealth Bank found that Gen Z consumers express a stronger preference for real-word shopping than Gen X or Gen Y, despite making one in three purchases online. The report indicated that younger consumers are being drawn to retailers that use technology to add to the in-store experience – such as virtual kiosks and apps to help them browse.
As consumers spend their daily lives tethered to their smartphones, savvy retailers are exploring ways to merge the physical with the digital world. From virtual changing room apps to QR code scanning, technology is being used to make the consumer experience even better.
Even Amazon is getting in on the action – it recently launched its first physical stores, known as Amazon Go in the US. There are no cashiers, no lines and no registers. Shoppers simply scan their phones using the Amazon Go app upon entering the store. When items are taken off shelves they are added to the shopper’s virtual cart, with the shopper automatically charged when they leave the store. For Amazon, this opens the online retailer up to a whole new pool of customers that may be wary of a purely online shopping experience where the ability to experience products prior to purchase is limited.
To compete with the convenience and fast delivery options available through online retailers, many bricks and mortar retailers are also exploring how they can improve their digital offerings to remain relevant across this space.
For instance, Coles recently began trialling the use of peer-to-peer jobs platform Airtasker for home deliveries. Similarly, McDonalds launched partnerships with UberEats so fast food can be delivered straight to the customer’s door. For these retailers, such partnerships and offerings means that they can meet customer expectations for on-demand services and convenience, while also enabling them to engage with customers more regularly.
Offering an interactive experience
For higher-cost items such as whitegoods and TVs – it remains important for consumers to try before they buy and have the option to easily return, replace or repair. Equally well trained in-store experts can work with a customer to find the right price or product based on their individual needs and desires. While live chat and chatbot options have infiltrated this space to a degree, there’s still a long way to go before this technology measures up to the face-to-face experience.
Moreover, shopping centres are evolving into highly interactive destinations that offer unique experiences. For example, Harvey Norman’s flagship store in Auburn, in Western Sydney now offers barista and cooking demonstrations, VR exhibits, GoPro workshops and video game sessions with famous gamers.
Focusing on traditional strengths
While the adoption of digital technologies by bricks and mortar retailers is helping them to level the playing field, focusing on traditional strengths like service and warranties can provide a major point of difference against pure-play online retailers. Aftercare service in particular is key to building customer trust and loyalty.
Aftercare services such as replace or repair through extended warranties can go a long way to keep customers happy. However, there is still a large knowledge gap for consumers on what is available to them. Therefore, educating retail staff is really important, as well as being transparent about the value that warranties provide. Warranty services can be seen as “peace of mind” products. However, the real value for consumers is in the convenience they provide through rapid repairs/replacements for the customer. Apple’s “Genius Bar” is a great example of aftercare service where customers can have face-to-face tech support for their iPhones. Strong aftersales offerings can ensure customer satisfaction and build loyalty.
Ultimately, aftercare services can be a key differentiator in the battle against pure-play retailers. Customers may be enticed by a bargain, but this will not guarantee customer loyalty. It’s about providing the right products and investing in added services that serve to build consumer trust. Customers that understand their rights and the products, are less likely to be dissatisfied post-purchase. That is where the long term value for bricks and mortar retailers lies.
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