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Customer engagement fuels retail success

Down, but not out? It's a fitting description for the current state of traditional retail stores. But there are many ways retailers can still win against online competition.

The rise of online sellers, led by Amazon, has been a disaster for traditional brick-and-mortar retailers, with many department stores and innumerable mom-and-pop shops shuttering their doors. It's not unlike the ongoing challenge the movie business faces from the array of online and digital entertainment options, led by Netflix.

This has left retailers to think outside the box and rework their business models. To improve CX and customer engagement, retail businesses have implemented self-service checkout and options that include the ability to shop online and pick the merchandise up in store.

Take Target and Walmart, for example. They both have business models that include a mix of what stores traditionally offer and online services. Other retailers are using technology to identify customers in store and send them mobile alerts about discounts for items they previously purchased. Stores are able to do this using beacons -- small, battery-operated, wireless devices that transmit Bluetooth signals to customers' mobile devices. It won't work with all customers, though -- only those who have Bluetooth enabled and the right retail app downloaded on their mobile device.

Another soon-to-be-released idea is the Ellipse Platform, a radical new kind of shelving system that offers retailers more flexibility in how to display products and which ones to carry.

Though it's not yet available, the Ellipse Platform design is finished, and the company is planning a big rollout with partners, said George Fanourgiakis, a partner at Grand Venture Group (GVG), the company behind the Ellipse Platform. What makes Ellipse shelving unique is it's easily extendable -- even bendable -- as a way to help retailers display different product sizes.

"The retail store layout hasn't changed in over a hundred years," Fanourgiakis said.

Traditionally, it can cost hundreds of thousands of dollars to change a store layout. Retailers get a lot of data about what they should be selling, but it is underutilized, because stores can't always adapt to take on new products, Fanourgiakis said.

GVG said it's also working with IoT and other technology providers to make the shelving smart in the sense that retailers will be able to use sensors that let them check inventory remotely and be alerted when quantities are low.

Back to basics

While there seems to be broad agreement that improved CX and customer engagement are necessary for the success of retail businesses, there is disagreement about how big a role technology should play.

Four out of five respondents said they'd prioritize a clean store over technology.
Tom BuiocchiCEO, ServiceChannel

"The consumer's expectations are at an all-time high. You can't have a smelly or dirty store or make mistakes; you have to invest in the store experience proactively," said Tom Buiocchi, CEO of ServiceChannel, a facilities management company that operates on a model like Uber, where retail stores can order a plumber or other service technician via the ServiceChannel app.

In a recent survey, ServiceChannel found 71% of high-income customers walk out of retail stores because of something physically wrong at the location.

"Also, four out of five respondents said they'd prioritize a clean store over technology," Buiocchi said.

The multichannel shopping experience

Ultimately, shopping online for just about everything may be inevitable, but there may always be a need for stores, as well. Even Amazon recognized the need for stores when it decided to buy Whole Foods.

"Basically, what has changed is the consumer has gotten savvier about the multichannel experience that's been talked about for a decade," said Maribel Lopez, founder and principal analyst at Lopez Research.

Consumers are now able to shop using an app and pick items up in store. And CRM systems also give retailers a better sense of who their customers are, and they send them coupons when they're in the store.

And, contrary to popular belief, Amazon doesn't always have the cheapest prices, Lopez said. Retail businesses can engage customers by using technology to reach them on the web and mobile devices to show where there are deals.

"I don't know that retailers are going away anytime soon," said Tim Bajarin, analyst and president at Creative Strategies. "People still enjoy shopping, especially things like clothes that they want to be able to feel and try on."

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