Interbrand’s 2014 Best Retail Brands report was recently released, ranking the top global retail brands. The report is produced in collaboration with Interbrand Design Forum, the retail experience group within Interbrand. My biggest takeaway from the report is that in this competitive economy, retailers should not create competition between their own in-store business and business from digital channels. In fact, there are big retail customer experience opportunities for companies that leverage digital channels for customer engagement within brick-and-mortar stores. Ultimately retailers need to be customer-centric, not channel-centric, providing the right customer engagement opportunities at the right time.
With this in mind, below are my good, bad, and ugly retail customer experience practices called out in the Interbrand report.
The Good: Connected Stores for Connected Customers
Retailers who embrace digital channels in their brick-and-mortar store are making a seamless in-store, online, and mobile shopping experience referred to as a hybrid model. Macy’s was highlighted in the report as their brand value surged 383%, the most of any retailer on Interbrand’s North American list. Macy’s has been quick to respond to shoppers’ new digital behaviors and rapidly become a leader in omnichannel retailing. Macy’s adopted a hybrid model, using beacon technology, for enhanced mobile interactions in-store, and is rolling out a “buy online, pickup in store” concept at all of its stores.
The Bad: Losing the Battle of Showrooming
One of the major pressures retailers face is today is showrooming, when a shopper visits a brick-and-mortar store, then uses a smartphone to compare prices or search for product reviews online, and then purchases the product online due to better pricing vs. in-store. As consumers instantly price check items from their smart phones, all retailers have gotten more competitive on price. Electronics shoppers visit as many as 14 online sources for product information before buying, and most of that research is done while in store on a mobile device. To combat showrooming, retailers like Best Buy have begun matching any online price for the products it sells in its brick-and-mortar stores, which they claim is aiding in closing more in-store sales. The report also noted Best Buy’s ship-from-store, in-store pickup, and a loyalty program as additional showrooming combatants for them.
The Ugly: Lack of Action to Enhance the Customer Experience
Interbrand says that creating a customer-centric view with an integrated multi-touchpoint customer journey will make shopping experiences more enjoyable and brands more valuable. But they also point out that in Accenture’s report, Energizing Global Growth, 73% of business executives recognized a marked change in consumer behavior in the last three years, but 74% admitted they did not fully understand those changes, and 80% believe their companies were not taking full advantage of current trends and opportunities. This lack of action on trends and technology, whether due to lack of in-house staff, operations synergy, or partner knowledge is hurting retailers now and in the future. According to Dirk Defenbaugh, Managing Director of Interbrand Design Forum, “By integrating the physical and virtual, making purchasing easier, enhancing service, and using storytelling, these leading brands are re-imagining their offers, and creating unique experiences for consumers that convert browsers into buyers.”
Learn more about omnichannel retail, combatting showrooming and merging the physical and digital channels at our 2014 Retail Summit. Reserve a complimentary session pass, as seats are limited. Click here to register!