Why isn’t in-store tech focused more on full-service?
In a new study, A.T. Kearney argues that the reason retailers struggle finding returns on technology investments is because ninety percent of retail sales still happen at brick and mortar stores and almost none of those investments are about helping store associates do their jobs better.
A survey from executives at more than 100 global retailers found that nearly 60 percent of retailers struggle with executing and measuring the ROI on their technology investments – only slightly better than the findings of its 2013 survey.
“Amid the noise of technology investment and omnichannel integration, store associates are often overlooked as crucial conduits for improved store performance,” A.T. Kearney argued in its 2016 Achieving Excellence in Retail Operations (AERO) study.
The study found that instead of investments in tools and information that enable employees to better engage with customers and meet their needs, most are focused on consumer-facing technology, even though 80 percent of consumers say they experience poor service when directly interacting with in-store technology.
“The retailers that are investing in technology successfully are using it to help store associates,” states A.T. Kearney. “It helps ease the burden of execution also, as associates are incentivized to learn, adopt, and implement new technology solutions to boost productivity, sales, and potentially their own commissions.”
Retailers also need to make use of training, incentives, career progression, and corporate support to properly support in-store staff, the study states. Encouragingly, about three-quarters of retailers planned to invest in more training and labor.
Technology-wise, providing a deeper level of in-store customer interactions, such as offering preferences based on in-store activities, is being held back by shopper trust issues and the willingness to share information. But A.T. Kearney still states that, “Mastering store associates’ personal interactions is often a better investment than some technology bets.”
- New Retail Operations Report Finds Store Associates are Being Left Behind as Retail Migrates to Bricks and Clicks – A.T. Kearney
- 2016 Achieving Excellence in Retail Operations (AERO) study 2016 Achieving Excellence in Retail Operations (AERO) study – A.T. Kearney
DISCUSSION QUESTIONS: Why are in-store technology investments focused more on offering self-serve solutions for shoppers rather than helping store associates meet shopper needs? Do you see that changing?
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25 Comments on "Why isn’t in-store tech focused more on full-service?"
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President/CEO, The Retail Doctor
Agreed, the highest return on investment is training because it touches every customer walking into a brick-and-mortar store. Nothing else comes close.
That said, as I wrote in my recent post 5 Ways Brick and Mortar Retailers Should Prepare For Better Future, you can’t be smug about stated low percentages of online sales. The very methodology is flawed, it’s more like 40 percent of sales are happening online.
The time to train is now, and that’s training on the forgotten soft skills of how to engage a stranger and build rapport which is what I do. Then you can look at how technology can cut out friction in the sales process. Without grabbing the customer’s interest first, no Oculus or AR will prove profitable or worthy.
President, The Ian Percy Corporation
Good stuff Tom! Your article speaks for itself and really needs no further comment.
One day we’ll realize that technology is a means not an end. And if we’re smart we’ll also, on that same day, realize that it always has been, and always will be, about people. About connections and community. About genuinely caring.
Principal, Cathy Hotka & Associates
We’ve got to up-end the paradigm of store associate as clothes-folder, inventory-straightener and and checkout clerk, and start seeing them as the face of the brand. Associates need more training, higher wages and a clear sense of empowerment that will engage them fully in the business. Hire smart people, give them a reason to make an impact and the technology tools to reach out across channels, and watch the results.
President, The Ian Percy Corporation
Well said Cathy!
EVP Thought Leadership, Marketing, WD Partners
Totally agree. It seems like such a “duh” — store associates are the biggest advantage brick-and-mortar retail has over clicks — but that “duh” still seems to be mostly ignored.
What makes Starbucks so great? The barista that knows your name. What do you like most about the Apple stores? The helpful employees who solve any problem. Why are the Tesla stores so cool? Amazing associates who are obviously well trained. Who’s bringing the greeter back? Walmart. Why do you think?
On and on. The days of getting away with stack it high and let it fly are clearly over. And just as clear is the message to stop with the gadgets and touch screen mirrors and train the associates!
VP of Strategy, Aptos
President, Integrated Marketing Solutions
You can’t manage what you can’t measure … and what gets measured gets done.
I strongly agree with the opening statements that retailers struggle with measuring investments in their store associates. Store plan-o-grams and fixtures are tangible and installed overnight — so it is easier to see and measure pre/post changes. Staff training takes place over a much longer period of time and not all staff complete training at the same time.
But the biggest challenge to investing in store staff is that the traditional retail metrics and measurements are geared to store outcomes of sales and revenue. Some of the biggest impacts of training store associates are typically on metrics of consumer trust, customer satisfaction and reducing returns. Most retailers spend very little time on measuring these “soft” outcomes … and you can’t change what you don’t measure.
Principal, Retailing In Focus LLC
Tech solutions such as improved inventory management (RFID, for example) and line management at the checkout lane are actually positive for the customer. Most shopping happens in self-service environments, outside of the most “high-touch” types of stores. And even the Nordstroms of the world can benefit from good replenishment systems.
Where the tech advancement has fallen down lately is the increased emphasis on omnichannel solutions. Tasks such as BOPIS and ship-from-store are also distracting store associates from dealing as effectively as possible with the customers actually shopping in their stores.
I think retailers realize that many questions from customers to store associates likely would have to be answered by systems that involve complex integrations with multiple back-office systems, especially on inventory, back-in-stock, future sales (how much will the discount be?) and others. And while most retailers offer price matching with competitors, they still lean on the customer to seek this out and ask for the price match, which would likely eat up a lot of in-store labor time for an outcome that reduces their margins even more.
Bottom line: while retailers give lip service to putting the customer first, the business is built for transactions TODAY, so anything that slows or complicates immediate transactions takes a back seat to real customer-centricity.
Principal, Retail Technology Group
It could be that retailers have been signaling to the solution providers that they are trying to reduce the payroll costs in the stores and these solution providers are coming up with self-serve-oriented technology. But with all the rhetoric about customer-centricity and customer service orientation, one would think that technology innovation should also be directed at enabling and empowering the store associate to better interact with, and better serve, the customer who wants help.
We see some such applications emerging. For example, we work with a company — Theatro Labs — that markets a wearable, voice-activated communications device targeted at the store associate which (among many other functions) enables gathering of product information and communication among peers without having to leave the customer’s side. It is this type of solution that can increase the productivity of the store associate while providing the customer with personal attention through the end of the transaction.
Global Retail & CPG Sales Strategist, IBM
Great questions. This has been an issue since the dawn of retail technology. Virtually every device in the store takes the shopper away from staff interactions. With the human touch being the main differentiator in physical stores today, I think retailers need to take this seriously once and for all, drive deep staff relationships with their shoppers and help staff serve shoppers better with useful, intuitive and convenient technologies.
Consultant, Strategist, Tech Innovator, UX Evangelist
When it all boils down to its core, there isn’t too much tech available to help employees. The employee-oriented tech is either going to be a variation on training or access to product/inventory information. What will really help employees, and ultimately retailers, is career building opportunities, real wages and making staff feel valued and needed. The tech tools are secondary.
Director, Solutions Marketing with Alteryx
This discussion is similar to this one.
I think the challenge for many retailers is viewing their associates as part of an overall strategy, not just a necessary expense to operate the physical store. Starting small by focusing on what makes a store associate’s job challenging, which also plays a role in shopper satisfaction, makes sense from a store-tech prioritization standpoint. When the pay is relatively low, I think you need to work especially hard to have employees act consistently as brand ambassadors. So you have to focus as much on the associate’s job satisfaction as on the shopper’s in my opinion.
Owner, Tony O's Supermarket and Catering
Co-Founder & Partner, Ascendant Loyalty
It’s not as easy as simply going out and hiring smart store associates. Smart people do not settle for a store associate job unless they are bored and looking for something to do. This leaves retailers with less than ordinary people in the labor force. As a result, retailers must focus on self-service because the labor force they have to choose from is often unapproachable and customers are more comfortable with technology.
Independent Board Member, Investor and Startup Advisor
This is an important issue that forms one of the three legs to the digital transformation stool for retail companies. My employer is all in for helping retailers make this transformation by helping their store associates work smarter by easily accessing enterprise and customer data on mobile devices.
The bottom line is that retailers need to view technology not only as a productivity booster but, more importantly, as an indispensable ingredient in turning their customer interactions into a strategic differentiator. And you can’t do that without making an investment in your people and integrate digital in your future plans not as a passing fad but as a truly transformative opportunity for the business.
Director of Retail, Milwaukee Art Museum
I agree that beyond assuring efficient transactions or finding product at another location, technology doesn’t really lend itself to helping store associates provide great customer service.
However, I strongly feel that great customer service is first and foremost something that comes from the top down. It is management that models it, hires it and coaches it. Great customer service is often more about a smile, empathy and a tone of voice. Most of those things don’t cost anything but seem to be oh-so elusive.
CEO, President- American Retail Consultants
Investing in your employees, both in-store technology focused ones and non technology focused ones, is not one of the mantras being sung by retailing leaders each day. Despite the glaring success of Apple Stores, and their robust approach to both training their employees and focusing primarily on customer service, the majority of the retailing world ignores this path to success. The old paradigm of just showing the customer the product (and then making them hunt down someone to help them buy it) is still alive and well because of the old concept that a well-trained, well-staffed team of customer service focused employees is not worth the customers they service. Retailers will continue to fail until they recognize this as one of their primary keys to success.
Scientific Advisor Kantar Retail; Adjunct Ehrenberg-Bass; Shopper Scientist LLC
This is a totally mistaken focus, and common — always suggesting that the way to improve a SELF-service store is to provide more service, through better trained or more staff. Sorry, that just compounds the problem, as if SERVICE is the answer for the SELF-service store. Wrong, WRONG!!!
I don’t think I have all the answers, but have spent the last 5 or more years intensely focussed on the ultimate CONVERGENCE of online, mobile and bricks (COMB) retail, into a fully integrated, single machine. I’m working on it every day, but the current conception is described in Chapter 5, “The Coming Webby Store,” in my second edition of “Inside the Mind of the Shopper,” to be released in July. Meanwhile you can access a PDF of that single chapter by clicking the chapter title above.
Principal, Your Retail Authority, LLC
Managing Partner Cambridge Retail Advisors
Global Vice President, Strategic Communications, SAP Global Retail Business Unit
SVP, Client Services, MotionPoint
Store payroll is typically the 2nd largest expense in retail (behind CoGS). Retailers are smart to do everything they can to make that investment productive. AT Kearney is right on the money!
I understand the attraction of driving payroll down by replacing it with customer self-service, but even with significant self-service, payroll will remain a huge expense. Store associates are admittedly more difficult to “program” than computers, but retailers that don’t enable & inspire their people to do the right things in-store are not only wasting money, they’re wasting a huge opportunity to differentiate in the face of online competition.
CEO & Co-Founder, GoSpotCheck
At this point, most retail tech investments have been focused on self-serve solutions for customers. The reasoning for this is two-fold: first, retailers and brands have been shortsighted in thinking that the most effective tech investment to improve the customer experience is consumer-facing tech. Second, self-serve solutions for customers are easier to tout because they are so forward facing.
However, as the CEO of a company that provides software to retailers and brands to empower their teams in market, I encounter companies every day that embrace back-of-house tech. These early adopters understand the power that store associates and other employees on the front lines of brick-and-mortar retail possess. By providing them with technology to improve agility and empowering them to make better decisions, everyone wins. This is the future of retail technology and we’re seeing it gain momentum amongst retailers and retail brands.