In the store, consumers sometimes want less: less waiting, less apathy, and a lot more ‘less’. Here are five issues that retailers urgently need to remove.
Less is better after Covid
After two years of having to sit at home and shop online, consumers’ expectations are high when they return to the store. They have made themselves with the ease of online shopping – including lower prices and higher convenience – and expect at least the same from their offline shopping experience. They tolerate fewer shortcomings, consultancy firm McKinsey concludes from new retail research.
More than 80 % of all consumers have adopted new shopping habits during the pandemic (such as click & collect), and a majority wants to maintain their new habits. However, consumers today are also looking for more than convenience and cross-channel connectivity. For example, one in three shoppers in the United States already expects same-day delivery, and such American trends often also make it to Europe – albeit with a little delay. The rapid rise of flash delivery companies is already hinting at the start of speed becoming a paramount argument in deliveries in Europe as well.
Consumers are expecting less in five domains: cross-channel obstacles, needless interaction, delivery times, injustice and staff rotation. As a result, the role of shops changes drastically.
1) No obstacle between sales channels
Especially now that retailers and brands were forced to digitise during the pandemic, today’s consumers no longer tolerate obstacles between the different sales channels. Cross-channel has to be seamless: for example, Apple had its Genius employees provide customer advice over the phone, online and in-store, armed with the full customer history thanks to each person’s Apple ID.
Target provided e-commerce fulfilment from its stores during the first lockdown, so that staff could continue to work and the many online orders were processed. However, customers now expect that this service will become permanent: in the meantime, ship-from-store is happening at most locations and there is a strong focus on hyper-fast collection at the point of sale. The store layout has now even been adapted so that employees can quickly prepare much-requested products.
2) No help
Interaction used to be what set physical stores apart from online shops, but now a growing number of customers only get irritated if they have to wait for someone to pay at the cash register or for an employee to get a product to try? During the pandemic, people have become so used to ‘contactless’ that they no longer need or want help with transactions. More than 70 % of people who recently used self-checkout want to continue to do so: self-service is preferred at checkout and transaction moments, so that employees are more available at other times. Employees are still appreciated for advice, guidance and troubleshooting when technology fails.
At makeup retailer Sephora, employees now provide personalised recommendations and tips, using tablets containing the shopper’s loyalty card information. Paradoxically, American supermarket chain Trader Joe’s is pushing to stock the stores during peak times, increasing the chances of staff coming into contact with customers. For tasks without added value, such as counting stocks or cleaning, more and more robots are popping up between the store shelves.
3) No wait
More than 90 % of consumers see delivery within two or three days as the norm today. In the US, one in three even expect same-day delivery – mainly younger consumers in cities, who are willing to pay an extra fee for that fast service. This creates opportunities, but also poses threats: if retailers fail to make this work, there are consequences. When online customers discover during checkout that they may have to wait longer for delivery, about 46 % simply leave the virtual shopping cart behind.
Some retailers respond to the challenge by offering more options: Walmart already offers free two-day shipping on purchases over 35 (or for Walmart+ members), but the new Walmart InHome program delivers groceries directly to people’s closets and refrigerators in their homes. If they cannot do it alone, they join forces with external partners: in Belgium and the Netherlands, Jumbo is collaborating with Gorillas; Carrefour will have its orders delivered by Deliveroo.
4) No tolerance for injustice
Consumers, especially the coveted Gen Z and millennials, are basing their choices for retailers and brands increasingly on sustainability, diversity, equality and inclusion. For example, 90% of US Gen Z shoppers believe that companies should address racial inequality.
Their beliefs can be strong: they have no patience for apathy or inertia in the field of equality or sustainability. More than half of Gen Z and millennial consumers say they are aware of brands’ sustainability efforts. Almost half are trying to shop more sustainably, which also explains why second-hand is on the rise.
5) No talent goes to waste
The pandemic has made recruiting and retaining staff a lot more important: the number of unfilled vacancies is high and labour shortages are increasing. Amazon in the US and Lidl in the United Kingdom are just some of the retailers that have increased wages and revised their benefits to attract new employees. There is also a trend towards more autonomy, flexible work schedules and better career paths.
“Traditional recruitment and onboarding will not suffice for most retailers in the coming years”, McKinsey predicts: data becomes important here as well, from AI-driven recruiting to digital training. Automation in HR is still in its infancy, but could be promising.
In terms of training, Walmart pioneered the use of virtual reality in 2018 to train employees in in-store order picking. Since then, the company has offered this training to more than a million employees in the United States. According to Walmart, those using the new system report 30 % higher satisfaction, score 70 % better on tests, and show up to 15 % more knowledge retention than before VR.
