Analysts expect that more than 6,000 stores will close in 2019.
Malls are closing. Retail stores are fighting to stay afloat. Analysts expect that more than 6,000 stores will close in 2019. More than 40,000 employees are expected to be laid off. The blame is often cast on the new digital retail experience. Yes, the way a consumer shops is radically different than even just a few years ago, but consider the stats from ServiceChannel’s recent research outlined in The State of Brick and Mortar Retail Report.
(By the way, if you aren’t in retail, don’t pass over this article, thinking it doesn’t apply to your business. Read between the lines. The shopping experience is a buying experience, regardless of the industry.)
This first point intrigued me. Eighty-six percent of consumers continue to make most of their purchases at brick and mortar locations. Yet many brick and mortar retailers fear how much business they are losing to online retailers. Yes, retailers must learn to compete with an online business, but that’s not the only reason a customer doesn’t return. Something as simple as a dirty restroom or a broken shelf could impact a return visit. Even something about the parking lot – too much traffic, having to walk too far, trash on the ground, etc. – could impact the experience enough to make a customer look for an alternative store.
In addition, 40% of customers surveyed said they are likely to spend less money in a store where there is a negative experience, while 43% said they are likely to jump to a competitor if they encounter any of these negative experiences. In other words, customers know what good service is. What’s more, they expect it. The report goes on to say that when customers have a problem-free experience, they come back and spend more. It’s common sense. You must accept this simple truth – shoppers expect a good customer experience.
It all comes down to experience. Here are three reasons from ServiceChannel’s report on why customers won’t return:
1. A Messy Store: I already mentioned dirty bathrooms. Add cluttered shelves, dirty floors and simple aesthetics and the customer is left with a negative impression of the store and its merchandise. The store inadvertently sends signals to customers that if the floors and shelves are dirty, the merchandise may not be of quality either.
2. Stores Should Be Shoppable Before Experiential: The report states that “basic amenities and the ability to touch, try on and take purchases with them immediately leads to repeat visits.” Before you get fancy by adding other amenities or experiences, make sure you have the basics covered.
3. One Bad Experience Is All It Takes: Customers are smart enough to know what a good experience feels like. Certain retailers with stellar reputations for service and experience – both brick-and-mortar and online – have set the bar high. Customers want and even demand a good experience. Just one mistake and 69% of shoppers are less likely to return. That number jumps to 76% for “high-income shoppers” (customers who earn more than $100,000 a year).
I’d like to add one more of my own to this list: customer service. If the service experience is bad, it won’t matter if the bathrooms are spotless, the floors are shiny and there’s plenty of wonderful merchandise to sample, try on and purchase because there won’t be any customers there to see it.
But even with all this gloom and doom in retail, there is a silver lining. Brick and mortar is far from dead. Some would even say it’s thriving. Consider that more than 2,100 stores are set to be opened by Amazon, Target, Dollar General, Costco, Aldo, Lululemon, TJ Maxx and more recognizable brands. Restoration Hardware is pushing for a better in-store experience as it aims to “revolutionize physical retail.”
There’s no doubt that digitization has impacted how businesses in all types of industries sell to their customers. If you read the ServiceChannel report, you’ll get a better understanding of these trends. You may even learn not just how to survive the digital revolution but thrive in it.
