In search of the retail metric of the future…

With the opening of not one but two ‘product-less’ concept stores (Nordstrom Local announces openings in New York), it seemed timely to re-examine a recent blog post in which we explored two arguments against the use of ‘traditional metrics’ in a rapidly evolving retail world.   The opening of a store that literally cannot measure sales provides a refreshing (and exciting!) context to reflect on those positions in an interesting new light….

Are traditional retail metrics dead?

In the article “The Way We Measure Retail Store Performance Needs to Change” retail M&A banker Richard Kestenbaum puts forward a well-reasoned and sensible argument for why retailers need to evolve their thinking when it comes to measuring store performance.

Retailers in the past relied on two key metrics, both sales driven, as a general gold standard for measuring performance – sales per square foot and store income statements.

Sales-per-square foot was used as a base-level indicator of performance; crucially, one that gave retailers to chance to make store-by-store comparisons, regardless of the size of each location.  While it may not have accounted for a host of important factors (age of store, local demographics etc.) it did at least provide a standardized basis for competitive analysis.  Combined with the evaluation of store income statements – a more localized viewpoint that treated each store as though it were an independent business – the two were presumed as sufficient by the majority of retailers.

The modern consumer’s relationship with physical retail is much more complex than it once was, having evolved beyond the point of that only looking at success from a ‘sales’ perspective can accurately represent.

Stores are no longer mere warehouses for goods, but rather interfaces for a wide range of interactions.  Customers today may use the store as a pick up and drop off point for online purchases, while retailers may use their physical locations to host experiential events, or even simply view as a showroom for product.

While traditional KPI’s are not without value, if our relationship with stores has evolved, so too, argues Kestenbaum, should our success measures as a result.

The Store as Media? 

In, “Measuring the Store of the Future“, ‘Retail Prophet’, Doug Stephens goes a step further, denouncing retail’s traditional KPIs as mere ‘industrial-age metrics’,

Judging a store’s performance simply by regarding its most recent sales results is like evaluating a patient’s health by asking what they had for breakfast that day.” 

For crystal-ball futurist Stephens (in an argument echoing the thrust of his 2017 work Re-Engineering Retail) it is not simply how much product a store can shift that represents its effectiveness, but rather how well the store is working as a ‘channel’ for the brand.

In an increasingly saturated digital space, reaching anyone online through targeted media becomes increasingly cost prohibitive.  Stephens argues that the real value of the store is its potential to reach an audience directly – in the ‘real world’. “Your stores are your media,” Stephens declares, “you’re just not measuring it” – yet.

Image result for customers queuing in-store event
A glimpse into the future? Customers wait for an event outside a Supreme store in London.

While looking to establish a more accurate method for performance measurement is a valuable endeavour, the parallels Stephens looks to draw to contemporary digital metrics (‘one positive in-store experience’ as the equivalent to a single digital impression or click through) feel perhaps a little too out there for some of the more literal-minded in the C-Suite.

Measuring the success of the store that doesn’t sell anything

Opened last week, Nordstrom’s “Local” concept store, is an 1,800 ft Upper West side behemoth, that doesn’t stock any product at all.  Customers can book ‘consultancies’ with stylists, or use the locations as a place to return products they’ve bought from other retailers (see our recent post on the announcement that Nordstrom will accept returns from Macy’s & Kohl’s in their stores).

With such a radical re-thinking of the traditional store experience, are metrics as sales per square foot even possible?  Speaking to Bloomsbury, James Nordstrom, announced that the success of his latest stores would be measured by increased market share – nary a sales metric in sight.

Is this what future of retail will look like?  No longer as a place of pure commerce, but rather something closer to the original vision of Harry Selfridge – the store as a place where people come to socialise and chat, with the incidental occasion of making a purchase an added bonus.

Have we lost that loving feeling?

In a recent interview with Forbes, TruRating CEO Georgina Nelson, observed a serious problem in contemporary retail, “Traditionally there has been something of a disconnect between customer experience and store operations… without a consistent way to measure it, how do you operationalise the customer experience in-store?”

In a world where customers no longer have the patience to put up with poor experiences, the need for a simple yet unobtrusive way to gauge customer sentiment in ‘real-time’ is more important than ever before.

If your customers are unable, or worse, unwilling to let you know how they feel about your service, then whatever the metric you land upon for measuring success, will ultimately be of little matter.

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To find out how TruRating’ point-of-sale customer feedback solution can help you to understand your customer experience and deliver rapid innovation in real-time, get in touch with one of the team today for more information. 

 

3 CX Improvements To Drive Revenue Growth

We recently submitted a guest blog post for our fantastic partners Retail Pro about three simple customer experience tactics you can implement to drive revenue growth for your business.

Because we’re generous, we’ve decided to share the intro of the article here, enjoy this taster and be sure to click through for the full read below!

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For retailers looking to compete with the fast pace and convenience of online businesses, the in-store experience is an increasingly important battleground.

While historically success for retailers may have been measured by metrics such as comparable growth by store, sales per square foot, and gross margin return on investment, these no longer tell the full story.

Modern retailers need to know more than just what your customers are buying.

To succeed today, you need to understand how each of your touchpoints impacts the totality of your customer experience.

And the trend is one that’s catching – a recent study by the Forrester Group reports, “72% of businesses now say improving the customer experience is their No.1 priority.”

Using CX to drive loyalty & revenue

For today’s retailers, the availability of point-of-sale data provides a huge range of options when it comes to building true and lasting engagement.

Creating customer experiences that are truly memorable can help drive loyalty and advocacy for your business, so it’s important to make every single moment count…

Make every experience count

In an increasingly competitive landscape, you need to focus on creating memorable experiences.  This doesn’t need to involve a radical overhaul of everything you do.

As we found with one of our retail partners, the little things can add up.

The Retail Prodigy Group (master franchisee holders for Nike) is committed to providing the ‘ultimate customer experience’ with every visit. In practice, this manifests itself in a series of relatively cost-efficient but rigorously maintained, service measures, especially at the point of sale.

Staff at RPG are trained to ask for each customer’s name and always offer multiple product selections at the checkout. Customers are made to feel welcome with small personal touches, creating an authentic and warm experience.

This not only creates happy customers but can lead to financial gain too – we measured a 30% increase in the average transaction as a result of these measures and 5% increase in total revenue.

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To read the article in its full unabridged glory, click here!Image result for retail pro logo png

We’d love to hear your thoughts as to the best ways to create memorable customer experiences and how to measure the results. Get in touch with us on Twitter or Linkedin and leave your comments below!

TruRating Debuts Plug-In with Magento, Launches Full Online Offering

The original in-store customer feedback solution now first of its kind available in the e-commerce realm

TruRating announced today an official extension with Magento Commerce, the worldwide leader in cloud digital commerce innovation. TruRating is now available for Magento merchants looking to select innovative solutions that enhance business operations.

In addition, the TruRating solution, which began as an in-store service when the company was founded in 2014, is now available to all online retailers as well as Magento, through a simple initiation process. This means that for the first time, businesses with both online and brick-and-mortar stores can gather customer feedback across those channels, combining ratings with transaction data to gain omnichannel insights that haven’t been possible before.

TruRating’s online business solution, which provides easy-to-understand insights via a dashboard and mobile app, generates a 59 percent quantitative customer response rate and 20 percent qualitative customer response rate, greatly outpacing typical industry standards. All feedback is gathered quickly and efficiently on the payment confirmation page, ensuring that the online shopping experience remains seamless and uninterrupted. Through Magento, digital retailers can go live with TruRating in less than 15 minutes and for those handling  less than 10,000 transactions per year, TruRating is free.

“Providing an extension through Magento seems the obvious way to officially launch our online product offering and bring more retailers the customer insights they’re craving,” said TruRating CEO Georgina Nelson. “Nearly 35 percent of businesses around the world use Magento to host their online store.”

The company was launched by Nelson, a former lawyer who wanted to help businesses get better insights by giving a voice to the “silent majority” of consumers who never give reviews. Online shoppers are asked one question on the payment confirmation page that can be answered simply using a number from 0-9, and written responses are also encouraged. The validated customer feedback data is fed back to merchants in near real-time, and the performance dashboard allows them to easily switch between online and brick-and-mortar stores.

“TruRating online is a natural evolution of our wildly successful in-store solution,” said Mary Hubbard, head of consumer product at TruRating. “Having worked with major retail brands in the past, I know first-hand that TruRating addresses well-known blind spots with their customer interactions, particularly as we’re witnessing the rapid change from traditional customer journey to consumer demand for flexible, personalized, omni-channel shopping experiences.”

You can get our online extension here: https://marketplace.magento.com/tr-trurating-rating.html

Furthermore, TruRating will be attending ETA Transact 2018, April 17-19 in Las Vegas, and Magento’s Imagine 2018 conference, April 23-25 in Las Vegas. If you’re interested in arranging time to speak with an executive at either show, email pr@trurating.com.

TruRating is planning additional e-commerce announcements in Q2. To learn more about how TruRating can help your business, visit www.trurating.com/business.

Shop Smart: How Data, AI and Culture Power Intelligent Retail

Forward-thinking retailers are investing in people and secure digital technology to infuse intelligence across all elements of retail. Inspired by Microsoft 2018 Retail Study, this paper explains how retailers can deliver seamless customer experience across multiple channels, proactively and efficiently connecting their organization to the diverse needs of their customers.