Question: What is the one thing separating physical retail from online retail. This is looking from the consumer's perspective in the type of experiences they are presented with.
This one thing is the reason why physical retail converts considerably higher (20% to 40% range) than online retail (1% to 4%).
The rules (or the "rules of engagement") governing how a retailer should be engaging with a consumer are exponentially different online to in-store because eCommerce technologies and the supporting business systems are governed by rules.
This concept of rules is the key to improving online experiences.
Understanding this dynamic first requires an assessment of why physical salespeople are effective at selling.
The In-Store “Rules of Engagement”:
When retailers work to create sales employees to become effective selling machines, they train people to do the following....
- How to effective greet people initially to great a good first impression
- How to immediately build rapport
- How to listen to a person's needs and then guide them to relevant products
- How to take product knowledge and translate it into benefits - this is all about presenting relevant information that contributes to a person's purchase decision making
- Closing techniques - understand when the need has been fulfilled and guide people to the checkout
All of the above training is designed to enable the delivery of a highly personalized and relevant one-to-one experience between salespeople and consumers in a face-to-face setting.
Why is this hard to replicate online?
The training listed above is designed for salespeople to react and respond to verbal cues that are provided by a person. Though salespeople are given training and information to be effective, ultimately, the above experience is not rules-based.
Salespeople are not provided rules to abide by when it comes to engaging and interacting with people. To be effective, this interaction must feel natural, not appear scripted, and make a person feel this engagement is on his/her terms.
For a consumer to remain engaged in a face-to-face interaction, they want information presented based on their own information-gathering needs.
This is how and why a face-to-face interaction feels personalized and is the foundation to amazing in-store interactions and is why physical retail converts higher than online.
For a moment, pause and reflect on when you have had a poor experience with a salesperson in a physical setting. Commonly, one of three things would have occurred...
- The salesperson loved the sound of his/her voice and presented information that was not relevant
- The salesperson did a poor job of presenting information - the salesperson used "jargony" language you did not understand
- When you what you wanted/needed, the salesperson presented products that did not fit your need
In summary, the experience felt like the salesperson did not understand your needs, was irrelevant, and just wanted to sell you anything he/she could. If one (or more) of the above happened to you, did you buy from that salesperson?
Of course not.
Technologies Require Rules:
Conversely, every eCommerce technology (and the various connected business systems) can ONLY operate with pre-defined rules. This will never change.
And even though Artificial Intelligence (AI) continues to boast it will automate thinking and enhance experiences at scale, it too must conform to rules.
The crux of an online channel's underperformance is always because the rules in play are poorly designed and not aligned to how consumers want to engage with a retailer online.
Another way to put it is, consider the above comments of the poor salesperson you would never buy from. This is what underperforming online channels do all day every day...
- If the site has good content, but it's hidden and/or presented in the wrong places (content presentation rules are flawed
- The behavior of functional elements is not intuitive (the rules that govern functionality behaviors are flawed)
- The layouts of pages are poor (the rules governing page element and page content are flawed)
- Inventory availability is confusing (business system rules feeding the site are flawed)
- The experiences on mobile are difficult for people to engage with (the rules governing rendering content and functionality on small screens are flawed)
Retailers need to become better listeners
Another question: What must retailers do to bridge this gap?
Answer: Become better listeners
Retailers do a great job teaching their salespeople to listen and respond (see above). However, to create a better "digital salesperson" the entire business must collectively listen.
Retailers need to stop designing rules that make it easy for technologies and systems to interact with each other. This approach needs to be flipped to create rules that make life easier for consumers. This change in mindset will require the configuration and connectivity between eCommerce technology and business systems to be more sophisticated. It's supposed to be!
Retailers are not put on this earth to make life simple for technologies and their technology vendors! And yet it always seems to work out that way.
Technology needs to be designed to anticipate consumer engagement needs:
Another question: How can listening improve engagement.
Answer: By listening to customers, retailers learn how they want to engage. This understanding enables retailers to anticipate future engagement needs.
To make rules work for eCommerce technology, experience design planning needs to be constructed to anticipate the following...
- Consumer pain points
- Consumer needs and motivations
- Consumer anxieties
- Consumer information gathering needs
Once these are known, rules can be designed to pre-construct journeys which perfectly align with each of the above.
In the physical world, salespeople react to questions and statements from the consumer to create this personalized interaction.
In the online world, rules can be designed to enable technology and supporting systems to also react in similar ways. Some examples...
- Content can be presented based on what pages consumers have engaged with previously
- The manner in which functional elements behave can be pre-designed to match consumer expectations - making it appear obvious and intuitive
- Pre-constructed experiences (a mix of content, page layouts, and functional elements) can respond to terms and phrases consumers type into a site search box (these are literal statements defining a consumer's need)
If retailers can get this right, they are presenting personalized experiences that can scale.
Breaking down "retailer listening" what does this mean?
There are many methods to effectively listen but the foundation comes in the form of quantitative and qualitative behavioral first-party data.
Quantitative data is statistical and is typically structured in nature – meaning it is more rigid and defined. It's measured using numbers and values, making it a more suitable candidate for data analysis in the truest sense.
This form of data tells retailers what is happening on their site. It defines behavioral issues and identifies the online experiences/journeys not working.
Some examples of quantitative data a retailer has access to:
- Google Analytics (quantitative)
- Consumer search demand (quantitative)
- POS purchasing history (quantitative)
Qualitative data is non-statistical and unstructured. This data does not measure hard numbers used to develop graphs and charts. Instead, it is categorized based on properties, labels, themes, sentiment, and other identifiers.
Qualitative data can be used to ask the question “why.” It is investigative and is often open-ended until further research is conducted. Generating this data from qualitative research is used for interpretations, developing hypotheses, and initial understandings.
This form of data helps retailers understand why things are happening and how they can be fixed.
Some examples of qualitative data a retailer has access to:
- Live chat logs (qualitative)
- Social interactions (qualitative)
- Incoming emails and phone calls to the support teams (qualitative)
- One on one interviews with front line salespeople (qualitative)
All the above (except for Consumer search demand) is classifieds as first-party data and can be easily accessed with the right approach in place.
Customer interviews do not work:
Out of interest, customer interviews are not a reliable form of qualitative data because of the risks in the integrity of the data produced from this source.
Research has proven, even under tight control, consumer interviews do not produce findings retailers can use as a basis to enhance future online experiences.
Retailers can spend millions on an enterprise eCommerce technology, however, if the rules that govern its engagement are flawed, a retailer will never gain ROI on that investment.
The first step for every retailer is to construct a planning methodology to drive a comprehensive listening process that helps guide the rules of the eCommerce technology and all supporting systems.
Then retailers seek out the technologies that can follow these rules or the business changes its existing technologies to comply with the new rules.
This is the foundation to constructing and scaling personalized online experiences.