A quarter of the year 2018 has already past. It is evident that major retailers are facing great challenges to win in the marketplace. Challenges include: (1) winning on the internet, (2) being quick and responsive in distribution of merchandise, and (3) especially gaining customer traffic in physical stores. Success of efforts in any of these areas will play out over time; progress for any major retailer can only be measured as the year passes and we track their ability to gain share of market and sustain profitable growth.
What’s involved here? There’s a need to think about retail business in new, broader terms and then make investments from the perspective of how they can improve customer satisfaction.
While I dislike the word – multichannel would be more appropriate – omnichannel is the key to long-term success for many companies. In a brilliant report on enterprise resource planning shared by CGS (Computer Generated Solutions, Inc.), Nordstrom is lauded for creating constant excellent customer experience across all sales channels. At Nordstrom, it’s always been their culture to think every customer is “family.” They have applied that mindset to come up with new selling models that respond to what today’s customer wants and then they make investments to back up the strategy. Omnichannel success is enabled by technology that invigorates sales, accommodates a fast and flexible supply chain, and keeps the focus on customer service.
Nordstrom has made it possible to buy items from Instagram and find items based on Pinterest favorites. According to CGS, items for sale from the retailer’s feed are displayed as an elegant grid of photos. Shoppers can scroll these photos at leisure and add items to their wish list or shopping cart. By having already invested “millions of dollars” into technology tools that help manage inventory, Nordstrom is prepared to support the use of these digital marketing tools and is able to deliver products quickly to the customer. Even better, it also reduces costs. More initiatives like that will keep a retailer ahead of competition and truly make omnichannel shopping a seamless experience.
Distribution of merchandise
A good retailer has always made it a point to present fresh, new merchandise that would entice customers to shop. That is still critically important, but there’s an equally important factor that goes along with having the right merchandise these days. As I wrote in a recent report, customers demand speed. Delivery in even a few days is no longer acceptable; shoppers want their ordered merchandise now. Amazon’s Prime, Walmart’s 2-day free delivery, and Barnes & Noble same day delivery are all examples of how delivery is changing.
While managing and reducing cost is a priority for every retailer, the customer must be serviced quickly and with charm. Traditional retailers must adopt their own responses to all of this, and I look forward to seeing what these brands will do to connect customers and their merchandise in new, time saving ways.
Gaining Customer Traffic in Physical Stores
Retailer profitability demands sustained store traffic. Macy’s loyalty program promotes shopping in stores. Rewarding customers with extra bonuses for shopping for more of their needs and wants is the first step that will pay-off in more traffic in stores. Adding a concierge service to some key locations is another option that would add to the ease of shopping. Concierge service is already in all Nordstrom stores, where “Everyone is Family.” In addition, to assure good customer service, merchandise has to be in stock through an integrated supply system that ensures efficient and cost-effective operation.
I believe that adding food departments in some stores will add repeat traffic and customer loyalty.