Dear Retailer, Give Me An Experience!

Omni-channel consumption has become a favorite topic of marketing consultants and strategists. Marketers casually throw it around without actually understanding at a deep level what it means for their consumers and what they want it. What does omni-channel mean exactly? Where does this come from and what are practical ways it can be addressed? Below are tangible examples of what it means for brands and why giving your consumers a better experience matters.

Showroomers Galore

It’s late. You are binge watching the new season of Ozark. Your eyes are on fire. You wonder if it’s just because it’s 12:30 AM or because you haven’t blinked in an hour. Either way, if you’re going to sit in front of a TV this long, you might as well do a favor to your eyes and check out new 4k TVs. You remember passing them after browsing the Blu-ray section earlier that afternoon on your lunch break at the local Best Buy. A sly salesmen got you to fall hook, line, and sinker on refresh rates, pixels, and curled screens. Your bet that the TV was going to be cheaper online paid off. You have it delivered for a 10% discount to Best Buy’s price first thing in the morning.

You are now officially a “Showroomer”. The Showroom Effect is predicated on a consumer making a product decision based on price with an underlying importance on features. This behavior consumers have flocked to has bite to its bark. Best Buy found itself in the spring of 2012 announcing they’d be closing 50 stores to focus on mobile tech.

Consumers want a better experience and are penalizing retailers who are comfortable providing only a transactional one.

This has caused a shift in consumer expectation. Now we see consumers foregoing the instant gratification of leaving with whatever product they were playing with on the store floor to wait for their online purchase to arrive at their doorstep.

Omni-channel Is The New Norm

A piece from Harvard Business Review showcases a study in which the omni-channel strategy has become a safe haven for the retail environment that has taken a hit in recent years. This study, though, reveals that omni-channel consumers spent 13% more in-store when they researched on that store’s website. Recent trends of brands being Showroomed would suggest that this finding does not make sense. Now it’s becoming more common for a consumer to engage in online research before actually going to a store and then driving to the store to make their purchase. This has been appropriately coined “Webrooming”. Additionally, products with larger price tags or technology-based products are being researched while standing in the store holding the product. We’ve all done it. Frantically googling what memory that widget has, why speed processing matters, and how much cheaper it is online before a salesperson asks us do we need help. But rather than swing the pendulum back and forth about which is more effective and how to manage consumer behavior, maybe the answer is right in front of retailers.

The Compensating Consumer

Consumers are adapting to the price war between brick and mortar with compensating behaviors. Brands and retailers need to wake up to the elastic sensibilities that influence persuasion and purchase.

Rather than declaring zero sum war on their digital self, brick and mortar brands should embrace the experience as the solution.

A consumer’s formation of brand equity is directly impacted by their ability to build advertising adstock. The more touchpoints a consumer has with a brand, the more likely they are to perceive that brand as having a greater market presence. This is relatively irrespective of the platform the touch point is made on. Why shouldn’t the purchase cycle be similar? Have you ever tried a product in the store and done research later to understand more about the product? After more research, maybe you check out their social media and go back to the store more intentionally with the purpose of real consideration for purchase? This process is a much more comfortable ordeal for the consumer. An omni-channel experience helps the consumer make a more informed choice. A more informed choice will likely lead to a decrease in cognitive dissonance. Reduced or eliminated cognitive dissonance is the key to customer loyalty and brand affection. Without the customer having a positive brand experience in store, you force their hand to decide based on price and promotion. This creates a battle for features and removes emotional ties to your brand. A strong customer experience in-store keeps the customer with your product in their hand and them thinking of ways they could benefit from it.

So Who Cares?

There are companies doing this right and have made larger efforts to create a unique experience for customers. See Microsoft – across the nation they’ve been rolling out more elaborate retail environments that lead with experience rather than product. They are doing innovative things to get people to see them as a partner on a brand journey. For instance, they have their VR experience as the first thing you see when you walk into the store. Even more interesting, they are hosting things like Fortnite Fridays in an effort to become an integral part of the gamer’s experience. This blended shopper experience is more of a "middle out" method (for all my Silicon Valley nerds). That is, creating a purchase occasion where the consumer isn't even sure where they first heard about the product or realized they were interested.

Apple is another good example of a retailer engaging the consumer for a more immersive experience. However, it does look different than Microsoft. Have you ever noticed when you go to the Apple store you are greeted by multiple people in a very systemized way? You are engaged by an initial greeting team who is solely there to direct you correctly starting from the moment you walk in. They are essentially your tangible, in-person call to action button giving you purpose to be there. Try to remember the last time you were there. I’m guessing your phone was acting up or you needed a new iPad. It is not common you are in the Apple store simply browsing. Even when it does happen, doesn’t your browsing seem more intentional? As if you are saying in your head, “I actually could use a new MacBook”. And that’s the point. The consumer may not want to be sold to, but they do want attention. When a brand is able to infiltrate and coexist with you the way Apple does for its enthusiasts, the experience is on a habitual loop. You are never really done shopping. Rather, you almost feel like you are waiting for them to give you the next thing to buy.

Retail Rebalance Of Power

Thanks to a competitive nudge from online retailers like Amazon, brick and mortar stores will catch up. Fast forward to 2018. Walk in to a Best Buy today. They have adopted this idea in numerous ways, but still could invest further into the experience. Retailers and brands that do not adopt this model and refuse to listen to the consumer will be impacted. Consider Barnes & Noble. Just about each book in the store has at least a 5% mark up and page flipping purists are disappearing. There's nothing immersive about the experience. It would not be surprising if Barnes & Noble flirts with disaster by the end of 2019. As the price premium on products from brick and mortar shrinks compared to its digital counterpart, delayed gratification will become less and less acceptable to the consumer. They want to leave retail stores with their products. The customer will inevitably shift back to appreciating instant gratification more than they will get excited about finding a deal from the digital shelf. The smartest brands in the room will embrace this on behalf of their consumers. Don’t exploit a compensating behavior, give a solution that goes to the root. Give us experience.

If you are looking for what your customers want and why they are choosing you, shoot me a note and we can talk about how we can help. Check out our solutions and other information on the DeepBridge site. Questions? Thoughts? We love hearing from the audience. Let us know if you have an opinion! If you found this interesting, spread the knowledge and give it a share! Find all our insights at our site - no charge.