Employees Are Key To Electronics Retailing October 27, 2009
Posted by Bruce Temkin in Customer experience, Store/branch strategy.Tags: Best Buy, Brian Dunn, The American Consumer Institute
add a comment
Here’s how Best Buy CEO Brian Dunn ended a recent blog post on CNBC:
You should be happy with what you purchase. This means that the product works the way you expect it to before you walk out of the store, or when you get home. If not, you’ve overpaid at any price.
Dunn’s post discusses the importance of knowledgeable staff in the consumer electronics space. He points to a study by The American Consumer Institute that shows how often consumers selected different attributes as being important for their electronics purchase:
- Product quality (85%)
- Knowledgeable staff (77%)
- Finding someone to help (74%)
- Lower prices (70%)
My take: True! Dunn’s comments are consistent with my previous post about Wal-Mart’s new tech support as well as my research which shows that customer service trumps price across most industries. When consumers chose a retailer, the need for higher customer service increases with age. There are 2% more Gen Y that want good customer service than those that want low prices. For Seniors, the gap between customer service and low price is 14%.
That’s why retailers need to focus on the 4th law of my 6 laws of customer experience: Unengaged employees don’t create engaged customers.
The bottom line: Don’t sell electronics, help people chose and use them.
For More Sales, Design Better Checkout Experiences October 20, 2009
Posted by Bruce Temkin in Customer experience, Store/branch strategy.3 comments
I’m guessing that many people who read the title of this post think it’s about online experiences. That’s where “design” and “checkout” most often show up in the same sentence. But I’m actually discussing in-store experiences. According to recent research, about 1.6 percent of customers abandon in-store checkout lines. For a typical retailer, that’s over $100,000 per store per year, which is more than $50 million per year for a 500 store chain.
My take: I’ve recently discussed new in-store merchandising strategies for Wal-Mart, Michael’s, and Macy’s. Companies are recognizing that store design has a significant impact on customer purchases during a visit and on the likelihood of customers to return to the store. But the last place you want customers to have a bad experience is when they’ve got a product in one hand and payment in the other.
So companies need to take another look at the design of their checkout experiences. This means examining their queue structure (multi-line, single-line, etc), the queue environment, and in-queue merchandising. Technology offers new options for in-store experiences like self-service checkout kiosks and portable checkout systems.
Since I mentioned online experiences at the start of this post, I’ll end with a comment about online experiences. I’ve written in the past about flaws in the Store to Web experience. With the growth of mobile applications like ShopSavvy, retailers will increasingly need to design experiences that cross-over online-offline boundaries.
The bottom line: Stop losing customers that are ready to buy.
Walmart’s Experience Redesign Makes Sense September 24, 2009
Posted by Bruce Temkin in Customer experience, Store/branch strategy.Tags: WalMart
1 comment so far
What do you get when you combine Walmart’s low prices with smart merchandising and good service? Trouble for competitors. And Walmart’s Project Impact is aimed at doing just that.
According to Walmart’s Northeast general manager:
We’ve listened to our customers, and they want an easier shopping experience. We’ve brightened up the stores and opened things up to make it more navigable.
Here’s an example of Walmart’s new store experience:
Source: BNET
My take: There’s no reason for companies to make trade-offs between low prices and good in-store experiences (or good experiences in other channels like the Web and the phone). That’s the core premise of the post My Manifesto: Great Customer Experience Is Free.
When companies focus on their target customers, it becomes very clear that customer experience is not an optional ingredient. But that doesn’t mean that Walmart or any other retailer should replicate the experience model of Nordstrom’s or even Michael’s Crafts. The key is to understand what your customers’ need and want.
Employees are also a critical component of customer experience. As I’ve discuss in my eBook The 6 Laws Of Customer Experience: Unengaged employees don’t create engaged customers. That’s why every one-tenth-of-a-point increase in employee engagement at a Best Buy store increases it profits by $100,000 a year.
Is there a blueprint for getting this right? Yes. Experience-Based Differentiation.
The bottom line: Customers notice when you neglect their experience.
Michaels Crafts Distinct In-Store Experiences September 4, 2009
Posted by Bruce Temkin in Customer experience, Store/branch strategy.2 comments
Here’s a very interesting approach to in-store experiences: store-within-a-store for every category. I ran across work that retail brand consultancy Interbrand Design Forum did for Michaels, the arts and crafts specialty retailer. This is what the jewelry area looks like at Michaels:
- Source: RetailCustomerExperience.com
The bottom line: Tune retail experiences to support user goals
My Macy’s Provides Recession Blueprint September 3, 2009
Posted by Bruce Temkin in Customer experience, Managing in a recession, Store/branch strategy.Tags: Macy's
add a comment
Late last year, Macy’s consolidated its divisions and started tailoring in-store merchandising to the needs of different regions, an approach that it calls “My Macy’s.” It turns out that “My Macy’s” has been such a success that it is rolling out the effort across all of it’s stores. According to Karen Hoguet, Macy’s CFO:
For the spring season, the My Macy’s districts outperformed the remaining stores by 2.6 percentage points
My take: These results aren’t surprising. In a previous post, I gave ”My Macy’s” a thumbs-up for following a recession strategy that I called: simplify, target, and align. During a recession, companies have less opportunity for sloppiness so they need to more effectively align their offerings and efforts to the specific need of target customers. Since the needs of customers vary across regions, it makes sense to merchandise in different ways in different regions.
The bottom line: What’s your “My <Your Company>” strategy?
The Experience Of A Bicycle Built By You August 6, 2009
Posted by Bruce Temkin in Customer experience, Store/branch strategy.Tags: Adaptive Path, Mission Bicycle Company, Peter Merholz, Dana-Farber Cancer Institute, Pan Mass Challenge
1 comment so far
The Tour de France just ended and the Pan Mass Challenge, a huge event where people raise money for the Dana-Farber Cancer Institute by biking across Massachusetts, was held this past weekend. So biking is in the air.
That’s probably why an email from Peter Merholz, President of Adaptive Path, caught my eye. He sent me a link to a blog post about work that his firm is doing with a bike store in San Francisco. It turns out that Mission Bicycle Company was selling fixed gear bikes online, but decided to open a retail store where customers could easily assemble their own custom bikes.
But “easily” is not something that’s easy to accomplish — especially when Adaptive Path had less than 2 weeks to design the in-store experience.
Despite a HEAVILY time-constrained project, Adaptive Path followed a user-centric approach:
- Interviewing cyclists to understand their needs and expectations of a custom bike retail experience
- Clearly articulating the Mission Bikes process in a way that aligned with cyclists’ needs and expectations
- Sketching and generating experience concepts quickly
- Prototyping the experience design concepts in their studio
The final store design (which is very cool) was based on 4 components: Instructions, Wall Mount Displays, Table Displays, and Build Kits. 
Here’s what Zack Rosen, CEO of Mission Bicycle Company, told me about his new bicycle shop:
The visceral experience of being in our store surrounded by beautiful bicycles and parts laid out like artwork was what made the sales system and process work. If our customers are excited by the prospects of designing a custom bicycle they will happily go through the process Adaptive Path careful designed.
It’s worth taking a look at the case study they pulled together on the effort. It shows the evolution from sketches, to designs, to implementations. For example, this is how the Table Display evolved:
The bottom line: There’s always time for good user-centric design
In-Person Satisfaction Snapshot- Costco, Barnes & Noble, and Marriott Top The List April 24, 2009
Posted by Bruce Temkin in Store/branch strategy.Tags: Barnes & Noble, Comcast, Costco, credit unions, Marriott, Old Navy, Road Runner, Sam's Club, Sprint, Time Warner Cable
add a comment
We asked more than 4,500 US consumers about their satisfaction with experiences across 12 different industries: airlines, banks, cell phone service providers, credit card providers, hotels, insurance firms, Internet service providers, investment firms, medical insurance companies, PC manufacturers, retailers, and TV service providers. Our analysis looked at phone, store/branch, and Web interactions.
Here are some highlights of consumer feedback on in-person interactions. The analysis looked at satisfaction rates at an industry level and changes from last year’s results, examined satisfaction for individual companies, and compared responses across generations of consumers.
- Highest industry satisfaction: Retailers (88%)
- Lowest industry satisfaction: Heath plans (69%) and TV service providers (69%)
- Most improved industry: Credit card providers (improved 6%)
- Least improved industry: Internet service providers (declined 7%) and health plans (declined 7%)
- Highest company satisfaction: Costco (94%), Barnes & Noble (94%), Marriott (94%), Old Navy (93%), credit unions (93%), and Sam’s Club (93%)
- Lowest company satisfaction: Time Warner Cable (61%), Road Runner (63%), Sprint (64%), and Comcast (66%)
- Most satisfied generation: Seniors and Gen Y were most satisfied for four of the industries
- Least satisfied generation: Gen Yers were least satisfied for six of the industries
- Largest generation gap: Banks (Gen Y at 86% versus Younger Boomers at 68%)
The bottom line: What’s it like when customers come to see you?
Experiences That Satisfy Consumers, 2009 April 15, 2009
Posted by Bruce Temkin in Call center customer experience, Customer experience, Online strategy, Store/branch strategy.8 comments
I just published a report called The Experiences That Satisfy Consumers, 2009 that examines consumer satisfaction with Web, phone, and in-person experiences. My analysis looked at more than 100 companies across 12 industries. Here’s an overview of the results:
Only hotels and investment firms cross over the 80% satisfaction mark in every channel, while health insurance plans and TV service providers don’t even make it to 70% in any channel.
The report also analyzed changes from last year, differences across generations of consumers, and satisfaction levels for individual companies. As I did with last year’s report, I’ll create separate posts to examine satisfaction with Web interactions, phone interactions, and in-person interactions.
The bottom line: Consumers aren’t as satisfied as they should/could be.
Microsoft Takes A Giant Leap Into Retail February 13, 2009
Posted by Bruce Temkin in Apple, Customer experience, Store/branch strategy.Tags: Apple, Best Buy, Circuit City, Microsoft, Radio Shack
11 comments
Microsoft has been contemplating a new frontier…
Retail.
Over the past couple of years, Microsoft has recognized that it needs to take a more active role in the retailing of it’s products. It can no longer leave in-person merchandising and selling to retailers. What’s driving the urgency in Redmond to get into stores?
Apple.
Apple has radically changed the paradigm for retailing in technology. Rather than relying on retailers to deliver in-person experiences, Apple stores have revolutionized both the sales model and the service model for technology retailing.
That’s why it’s no surprise that Microsoft just hired a former Walmart executive to open a chain of retail stores. This effort will report into Kevin Turner, Microsoft’s COO (and a former Walmart executive) who says the aim is to
Transform the PC and Microsoft buying experience at retail by improving the articulation and demonstration of the Microsoft innovation and value proposition so that it’s clear, simple and straightforward for consumers everywhere.
This follows Microsoft’s recent unveiling of its huge Retail Experience Center in Redmond. I actually visted the center last year while doing some work with Microsoft on its retail strategy; it’s quite impressive.
My take: The technology market is maturing. Mainstream consumers are now the largest market; not techies. There’s a broad base of customers who want to buy technology products (PCs, phones, MP3 players, TVs, etc) who don’t understand anything about the underlying technology. So the listing of speeds-and-feeds (along with other technical specs) is an outdated retail marketing approach.
Unfortunately, retailers have not kept up with this shift. If you look at the 25 retailers that we ranked in Forrester’s Customer Experience Index, three of the bottom four were electronics retailers (Best Buy, Circuit City, and Radio Shack). This might also explain why stores like Circuit City and Tweeter are going bankrupt. So manufacturers like Sony, Apple, and now Microsoft are taking a lead in finding the right approach.
Here’s some of the things that mainstream technology users need:
- Plain language about feature benefits to enable trade-offs (why should I care about 60 HZ or 120 HZ when buying an LCD TV?)
- Products that are easy to setup and provide very simple interfaces for making common configuration changes
- Easy-to-use decision making tools for narrowing potential products
- Human advice (through trained employees and social media forums) for making product decisions
- Access to help for setup, repair, and usage questions
The bottom line: The electronics retail experience is overdue for a makeover
Recession Insights From Zeller’s CEO November 7, 2008
Posted by Bruce Temkin in Customer experience, Executive leadership, Managing in a recession, Store/branch strategy.Tags: Mark Foote, Zellers
2 comments
I just read an interesting article about Mark Foote, CEO of the Canadian retailer Zellers. Since Zellers is a discounter, the down economy is helping its business. But Foote isn’t just sitting back and pegging his company’s growth on the recession. Here are several things that he’s working on:
- Lowering the prices on 250 key items from paper towels to ironing boards
- Designing in-store displays and signage to more actively communicate price savings
- Putting more focus on its higher-margin apparel category with products that mimic upscale brands like Lululemon
- Pruning up to 25% of the inventory to concentrate on the products that are most important for its target shoppers: “mom and her kids.”
- Looking for ways to more radically change the Zeller store experience in the future
According to Foote:
A new Zellers store would stop them in the first few feet and give them a moment of pause. A great new store builds on but changes the character of the brand.
My take: Foote’s actions highlight the importance of four questions that every senior executive should be asking in the midst of this economic downturn:
- What’s our core value proposition and how does it translate in this economic environment?
- How can we more aggressively tailor products, services, and experiences to meet the needs of our most important customers?
- How can we deliver more value and make sure customers recognize that value?
- Despite the focus on tactics in an economic downturn, how can we maintain progress on our long-term strategies?
The bottom line: Navigating through a recession takes active leadership
