By Greg Zakowicz, senior commerce marketing analyst, Oracle + Bronto
We’ve all had this experience: You walk into a store and find a product you like, open your phone for the obligatory quick price comparison and the store’s Wi-Fi network pops up, asking you to login or to register for an account. As a casual shopper, I view this as a hassle. On more than one occasion, I’ve just clicked cancel and foregone the free Wi-Fi.
This bumps up against the strategy plans of retailers who really, really want to know who is in their store to better engage and encourage conversion. A Boston Retail Partners survey shed light on several strategies retailers are considering to increase customer engagement and loyalty. The data shows within three years, 59 percent of retailers plan to use Wi-Fi and 63 percent plan to use mobile apps to identify in-store shoppers.
Look, I get it, but I don’t get it. While having the ability to identify a customer can be a powerful sales tool, I do wonder if it has the potential to cause retailers more harm than good.
Here’s the thing: Having access to Wi-Fi in a store is only the beginning of the in-store consumer experience. How do retailers provide value that not only overcomes this login friction but also ensures repeat usage? What is the retailer willing to offer — discounts, loyalty rewards, personalized recommendations — in exchange for the customer giving up their anonymity?
Let’s say I decide to provide my information and access the store’s Wi-Fi or app. What then? What does the user experience look like? This is critical because consumers generally won’t be overly patient with retailers while they “figure it out.” Retailers need to have a good grasp on what services come with an account. Is it in-store product recommendations, the ability to request an associate, or easily order online items? If providing personal info to login is required to access Wi-Fi or an app and it nets the shopper little, consumers will abandon without hesitation. For customers to go through these steps, retailers need to make it clear upfront what the value is.
A retailer may only have one chance to prove value. While using Wi-Fi is convenient, people aren’t streaming movies while they shop. Their overall data usage is minimal, and most opt to simply use cell service instead. When using an app, the same applies. If I open the app and there’s no value to using it, again, what’s the point?
Consider a grocery store asking shoppers to login. There may be value here in conjunction with other technologies, such as beacons, but what does that experience look like? Do I need to have the app open or screen unlocked the entire time I shop? Will I be getting push notifications every time I walk past certain products? Do I need to login simply to access my loyalty card when I already have an app for that?
Will I need to have 75 different store apps on my phone just in case I happen to go shopping? This can be a turnoff as it means more personal information, like payment info, is being stored. Security concerns are real for consumers. Not to mention, having too many apps is cumbersome to manage.
The Discounting Dilemma
Retailers today, both online and off, have backed themselves in a corner over the past several years by offering seemingly never-ending and increasing discounts. There has been a case of keeping up with the Joneses (and Amazonses) and they have trained consumers to wait for discounts. This is a major reason Gray November, a month-long deep discounting period in November, has usurped Black Friday and Cyber Monday as the “start” of the holiday shopping season.
If consumers are expecting discounts, what happens when they log into a retailer’s app or Wi-Fi and are not treated with an in-store discount? Even worse, if there are no other value adds, what would compel a shopper to login in during their next visit? Discounts will have to be managed, and in most cases, be a part of the value offered — at least initially. However, they shouldn’t be viewed as the primary value. Being able to personalize these promotions will be instrumental to success. However, only 24 percent of retailers in the Boston Retail Partners study mentioned personalized promotions and offerings as their top customer experience priorities.
Building Customer Loyalty
When asked what the top customer experience priorities were, 50 percent of retailers surveyed said they want to improve the experience for the purpose of increasing customer loyalty. Only 32 percent want to improve the experience by enhancing personalized service and sales assistance. If logging in doesn’t provide discounts or bring you sales assistance or personalized recommendations, what value does it provide? How will this value drive loyalty?
Retailers need to ask themselves this question: Is the focus really about increasing loyalty or simply improving the experience? One doesn’t necessarily lead to the other. If I’m at a store and take the time to login to an account, or open an app, I already have some affinity with your brand. But not providing me value in the form of sales assistance, recommendations, or other incentives leaves me wondering how that cultivates loyalty.
One challenge retailers need to figure out is how to provide value to increase loyalty from past customers, while at the same time encouraging the everyday browsing customer to make their first purchase. For instance, for a past customer, does the retailer make individual recommendations of products based on inventory and purchase history? Does it recommend a shoe shine kit knowing your last purchase of dress shoes was long enough ago that the shoes might be losing their luster? Or maybe even offers a free shine kit as the incentive with the purchase of XYZ? For a first-time customer, does it provide a discount or other incentive, like a gift, to encourage the first purchase? In lieu of discounts, maybe it offers an extended return policy and satisfaction guarantee, or showcases user-generated from social channels.
Where Does It All End?
For shoppers, the technology should not be the reason for a good in-store experience, but rather complement it. Creating hurdles to access features like free Wi-Fi, while providing little value in return, negatively impacts the customer experience. Retailers need to focus on the value they want their technology to provide customers, rather than offering it just because.
About The Author
As a former consultant with more than 10 years of experience in email, mobile and social media marketing, Greg Zakowicz has first-hand knowledge about the challenges facing the retail industry. Now, as Senior Commerce Marketing Analyst at Oracle + Bronto, he provides thoughtful insight to the Internet Retailer Top 1000, and is a frequent speaker at ecommerce events.