Is Your Company Doing What Amazon Does Best?

Many brick and mortar companies consider customer service to be their winning card.

If you ask 100 store owners, most of them will tell you that one of the biggest benefits of buying in-store vs. online is personal attention.

Bersin by Deloitte estimated that in US alone more than $60 billion were spent on employee training. While British Retail Consortium (BRC) published a study showing that retailers are investing an average of 1545 euro per employee in training each year, considering great customer service to be their biggest asset. But is it really making such a big difference from the customer’s perspective?

It’s no longer about face-to-face communication.

Historically, customer service was inseparable from face-to-face communication. Winning customer’s loyalty meant creating personal interaction between a sales associate and a customer.

There were a clear number of steps that traditional retailers had to take in order to provide outstanding customer service. It started with greeting the potential prospect at the door, offering them useful information, suggesting additional options and complementary products, and, finally, closing a sale.

For about two decades it was assumed that online retailers and e-commerce sites couldn’t compete with the professionalism and personal attention of direct human interaction.

Then the reality came crashing down…

Amazon.com has been rated #1 company in customer service Jeff Bezos, founder and CEO of Amazon.com, posted a public letter on his blog stating:

“I’m happy to report that Amazon has been rated #1 in the National Retail Federation Customers’ Choice Awards…”

Objectively, Amazon lacks 3 of the most basic elements of traditional retailing: a physical showroom space, on-the-spot salespeople, and the ‘instant gratification’ of taking purchased goods and products home after the sale is complete. So how can Amazon rank so high in customer satisfaction reviews? Easy.

Customer expectations have evolved. Have you?

Thousands of people, who participated in the National Retail Federation survey nominated Amazon for Customers’ Choice for being “efficient,” “fast,” “reliable,” and “easy.” It doesn’t take a genius to figure out that the idea of ‘great service’ has changed.

In fact, out of the top 10 companies, mentioned for their best service only 3 are brick-and-mortar retailers. The rest are all e-commerce websites and online stores. What’s their secret? Why are they quickly winning customer’s loyalty? And, finally, how did they take the brick-and-mortar’s biggest asset and transform it to their serious advantage?

Amazonalytics – the future of personalized service excellence.

Since its foundation in 1995, Amazon.com has been heavily investing in analytics and innovative technology, aimed at offering personalized service automatically.

To Amazon, retailing looks like a giant engineering problem. Algorithms and analytics tools define everything from the most relevant product suggestions to the optimal way of shipping a package. You can call it impersonal, but the fact is – people love it. They appreciate convenience, relevant suggestions, helpful peer reviews and, of course, the attractive price.

Most importantly, it’s working.

This strategy alone has allowed Amazon to quadruple its productivity and boost annual sales to a whopping $61 billion over the past few years.

As of today, Amazon makes more money a year than the world’s top 100 retailers combined!

What can smart offline retailers learn from the online colossus?

Data is the new oil.

We’re entering the era of the Metrics Revolution – the era of real-time data, instore traffic detection technology and connected products.

While traditional retailers can’t compete with the offline low prices, they can now use the same tools that have made Amazon billions of dollars.

Technological achievements combined with Silicon Valley culture have given birth to innovative start-ups that help traditional retailers to collect real-time data, track store traffic and reduce ‘showrooming’.

What can an owner of a brick-and-mortar store learn about their business?

Quite a few things…

In-store monitoring technologies, combined with analytics tools and marketing expertise can lead to a great number of insights. You will learn that the average wait time at the back register is two minutes. That 45% of people that come into your store, leave without making a purchase. That the promotion message on the east side of your store converts 3 times more customers than the promotion placed in the center and so on.

Analytics takes the guesswork out of the picture. It means more effective marketing messages, reduced staff costs, greater profits, better understanding of shoppers’ habits, and possibly better customer service. Definitely a big win for traditional retailers.

But is it a win for shoppers as well?

In-store analytics: awesome or unnerving?

When people found out that major store chains including; Nordstorm, Macy’s, Home Depot, CVS and Family Dollar were testing in-store tracking technologies, privacy concerns were raised.

While many shoppers have gotten used to the idea of their shopping habits being tracked online, they are uncomfortable about being ‘observed’ in store. It’s understandable.

First, most shoppers simply don’t know that the information collected by in-store sensors and eye tracking tools is anonymous and aggregate. The analytics software only receives general demographics data, including sex, age, attention span and in-store movements.

From the privacy standpoint it is much more anonymous than shopping in a store with traditional security cameras. But people are used to security cameras. They are not used to tracking sensors.

Finally…

At the moment retailers are failing to demonstrate to their consumers the value of sharing their personal data. No one is complaining about Amazon’s analytics tools, because they make a big difference in the quality of the online shopping experience.

Brick-and-mortar retailers should learn from the best, focusing on creating immersive retail experiences and on becoming “fast,” “reliable,” “easy,” but also more “personal” and more “fun.”

Those who succeed at it won’t have to worry about competition – even if their competition is Amazon.