How to Digital-Proof Your Business?
The new generation of digitally-savvy shoppers is quickly changing the customer shopping patterns. With higher number of mobile phone subscriptions than toothbrushes sold in the world, the line between physical stores and e-commerce websites is quickly disappearing.
People who walk into the store are no longer “just looking”. They use smartphones to search for reviews and compare prices to see if your competitors offer a better deal.
Consumers do their homework, because retailers don’t
On average a consumer researches 18 sources of information before buying a car and 14 sources to buy electronics. Real-time interaction across 3 different platforms – mobile, online and real-world, allows people to make more informed decisions, by searching relevant information, reading reviews and comparing prices.
Consumers, just like University students do their homework. Bocconi University, where I teach, has a brilliant and very competitive crowd (don’t tell them I said that). It’s no wonder students use Q&A time to ask questions, that they already know answers to. It’s a little strategy to test me, but most importantly, to show that they have a broad knowledge outside the university program.
Well, today’s customers do the same. They come to the store prepared and often, when they ask product or service-related questions, they already know the answer. They just want to get a second opinion.
But it’s not just about the lack of information
It’s about such deeply-rooted psychological components as credibility and loyalty. In the majority of cases, people have more trust in the experiences and opinions of their peers than they do in the competence of in-store employees. Would you blame them?
A new survey from Motorola Solutions showed that almost 50% of shoppers believe they are better informed than store associates when it comes to making buying decisions. (Source: Motorola, 2013)
And according to UK Birmingham Post, during the UK Ford dealership training session, “….35% of sales staff had little confidence in their own ability to demonstrate hi-tech in-car equipment such as Bluetooth devices and voice control systems”. This is not just dealership problem.
Despite the costly training programs large retail chains and department stores still can not claim that 100% of their employees are highly knowledgeable about the products and services they are offering.
What does it mean for the brick-and-mortar retailers?
While lowering the prices to compete with e-commerce titans may not be realistic, traditional stores can noticeably enhance their retail experience.
Those retailers who are able to bring online shopping benefits offline and make the shopping process more enjoyable or more personal will get a serious competitive advantage.
Turning Problems into Opportunities
The good news for traditional retailers: it is much easier for them to reap take advantage of technology capabilities than for the online world to “simulate” the traditional retail experience.
For one, the possibility of testing and touching the product, and taking it home with you is where the traditional stores offer is an undeniable benefit that online retailers at the moment cannot beat. And the fact that 43% of customers (even if they consider buying online) still drive to a store to check out the product talks for itself.
Can Brick-And-Mortar Retailers Digital-Proof Their Business?
Yes, they can. In fact, instead of fighting to stop customer’s migration to the digital and mobile domain by lowering prices, offline retailers should be looking for ways to incorporate best online and e-commerce trends into the marketing strategies.
Digital-Proof Strategy #1: Go-Go Social
Social network platforms can turn into a valuable source, helping retailers to get a better understanding of what consumers are saying online about products and whether they want to share this information with their customers.
The fact that 59% of users consider customer reviews to be more valuable than expert reviews and that almost 87% trust their friends’ recommendations is not to be dismissed lightly.
Digital-Proof Strategy #2: Start with WHY
The resistance of buying in store is simple – fear of making the wrong choice. If a customer is not sure that they get the best deal in terms of value and quality, they will walk away. Yet many retailers are so busy explaining WHAT they sell, that they fail to communicate to the potential prospects the true reasons WHY it makes sense to buy.
This pushes people into doing their homework.
Not only do 40% of shoppers consult 3 or more channels before making a purchase, statistics also reveal that product reviews influence shoppers’ purchasing decisions more than clearance sales pages. It turns out a screaming “SALE” sign is not as powerful as a short 5- star review (even if it comes from a total stranger).
If a retailer doesn’t answer this question in 4 seconds, they are likely to lose a customer. Shoppers don’t care about “great deals” or “product features” if it is not the product they are interested in.
They want very relevant answers to very specific questions and so far online retailers have made it much easier for potential prospects to find information that is both relevant and useful to them. But it doesn’t mean brick-and-mortar stores can’t do the same.
Many e-commerce websites and online retailers ease a customer’s psychological pain of spending their hard-earned money by introducing 1-click payment methods. While in-store retailers prolong the psychological discomfort not only by having customers take their wallet out, but also by having them wait in line to do so.
Thankfully, there are quite a few promising start-ups and giants as Google that are currently working on “pay-with-your-face” concept that goes beyond traditional 1-click payment and can noticeably enhance offline retail experience.