Customer Experience

Customer Experience

Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

Changing the in-store experience matters more than ever

The exponential growth of online sales compared to overall sales, along with new and evolving customer demands and a drop in footfall and loyalty levels due in part to the latest digital technology, poses a fundamental challenge to retailers:

How do I attract more customers into store instead of losing them to competitors or online channels?

Customers are more demanding and expect to be delighted

Customer expectations of what good looks and feels like in terms of shopping experience have changed. They now demand a simpler and convenient shopping experience with minimal waiting time and maximum product availability, relevant to their needs, personalised and engaging, connected through social media and the latest digital technology, and inspiring.

Importantly, customers increasingly have one single view of the company, not differentiating between online and physical shopping experiences.

Therefore, multi-channel integration, as well as technology and social media integration within the physical store environment are critical, and the most successful retailers have met and exceeded those demands to attract shoppers to their stores and grow their revenue. They have aligned the physical, human and digital dimensions of their stores around customer needs.

You walk into a retail store, whatever it is, and if there's a sense of entertainment and excitement and electricity, you wanna be there.” – Howard Schultz, CEO of Starbucks

Brick and mortar is an amazing opportunity to use our stores and our store staff as a vehicle to truly engage with the community” – Jim Brett, President, West Elm
 

Transforming the store to delight customers

In line with the new customer demands, we now see stores endorsing new roles. They are moving away from a purely transaction mode to being about the interaction and the emotional connections with the brand, turning into destination retailers and even, in some cases, experimentation and education centres – Apple stores being a good example of this.

The way the store layout is designed (physical), the way staff interact with customers and the staff to customer ratio (human) and the extent to which digital technologies are integrated into the in-store experience (digital) – are all instrumental in achieving this move towards stores that fulfil new customer expectations.

What are the benefits of transformed stores for customers?

Transforming stores to effectively meet customer expectations has many potential benefits. 
From the customer’s point of view, stores that are aligned to their needs provide an enhanced, more convenient shopping experience, with reduced waiting time at queues, easy navigation and product availability for example. A visit to the store is more relevant to their needs, more engaging, through staff interactions, quality service and advice, and more connected – being able to share and review products on social media.
 

And what are the benefits for the retailer?

From the retailer’s perspective, this improved experience will drive customer loyalty and repeat purchases, giving shoppers additional reasons to visit as stores evolve toward becoming ‘destination stores’. Customers will also spend more time in store – which holds the potential for higher average basket value purchases and significant sales uplifts.

Disney’s store revamp, which includes interactive kiosks with touch screens, enabling shoppers to navigate through the product offering, access clips, social media feed and related content, resulted in a 20% increase in profit margins and a significant boost in revenue. A staggering 90% of customers also stated they felt closer to the brand as a result of the new store design – and increasing the emotional links with a brand is more likely to enhance customer loyalty.

In our own experience, store transformation initiatives have delivered impressive benefits and value-add outputs for retailers: sales uplifts of 3 to 5%, 25 to 50% increases in colleague and customer satisfaction, over 2.5% increases in conversion rates, 96% increases in Internal Rates of Return or more and doubled operating profits.

The case is compelling In short, store transformation enables retailers to drive significant sales increases with minimal capital expenditure, thereby transforming their bottom-line profit performance by reallocating and utilising their current resources.

About the author

Clément Bourcart
Clément Bourcart
Clément is an Associate Consultant within the Programme Leadership & Change team, with a passion for the Retail sector and specifically Store Transformation and Customer Experience in general. Clément had experience of the Retail industry prior to joining Capgemini and was involved in store transformation in his first project, conducting store interviews and observations. He has also worked in the healthcare and government sectors.
1 Comment Leave a comment
To reinforce what you describe about delighting customers, we have seen recently a new type of shopping area near Metz called "Waves". A new architectural approach (modern designed shops gathered as a ring around a parc) provides a great feeling of being immersed in modern art mixed with neighbouring nature. A little bit of luxury. This concept requiring large areas provide more than just a standard crowded shopping area as we see with Ikea for example. You feel really delighted by the space, colored lights, fountains... And I would bet that this concept is also cost effective...

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