People Are Still Key to Successful Retailing, Study Shows

Even as new technologies continue to change how customers interact with retailers, frontliners and managers alike need to re-focus on the basics of retailing.

This is the message of the 2013 Achieving Excellence in Retail Operations (AERO) study from the global consulting firm A.T. Kearney, which looked at how retail operations across several industries can improve operations.

All about people
Despite developments such as new mobile tools, new shopping channels and new sources of customer data, the fundamentals of retailing endure, the study found.

“The AERO study demonstrates the importance of many traditional core principles of retailing. It confirms that running a successful retail operation is all about people: employees, customers, and the interactions among them,” the authors wrote in the introduction.

Travel Market Report asked Adam Pressman, principal at A.T. Kearney, who oversaw the study, to discuss the vital trends and opportunities for retailers, including those in travel.

Understand the journey
“You need to understand your customer’s journey and understand how your employees can create what you want to deliver,” said Pressman, adding that “you can use analytics and insights to better understand the customer experience.”

The study found that the most effective businesses do the best of job of looking at data and information to determine “the voice of the customer.”

Frontliners are key
The report also emphasized the role of frontline staff in understanding the customer.

“Frontline staff has always been closest to the customer, and that hasn’t changed. Successful retailers have always been, and remain, those that best take advantage of these staffers’ insights,” the report states.

Unfortunately many retailers lack processes for gathering employee insights, according to the report.

A well-prepared staff
Direct communication between frontliners and management is also vital to an effective sales force, the study suggests.

“Make sure you encourage the frontline staff and managers to lead,” Pressman advised. “Today’s customers have different expectations, so be sure that your staff has something to offer.”
 
As customers use more technology to research before buying, frontliners need to be prepared.

“Your employees may need more tools or different knowledge, as customers come in with their digital devices,” said Pressman. “In some cases, it means your overall mix of staff may need to change.”

One takeaway from the study is that two-thirds of the top retailers test for customer experience skills before hiring a potential candidate. Overall, half of all retailers do not test for such skills.

Use your data
The study takes a close look at the effective collection, analysis and use of data.

“There’s a lot of data that exists today and most is being interpreted in a traditional nature,” said Pressman. “There is an opportunity to really use data to drive more insights.”

He suggested that retailers focus on capitalizing on existing data that is underutilized, then adjust future strategies based on that analysis.

Interestingly, the study suggests that social media data is not useful when it comes to gauging customer experience.

“The specific impact of social media on retail is unclear,” said Pressman.

Mobile is a key force
The study found that retailers overall are investing most in self-serve terminals, mobile apps, QR-code enabled information and mobile point-of-sale technology.

Consumer use of mobile technologies is playing an especially big role in the evolution of retailing.

“When you look at overall mobile penetration, people are using mobile to build shopping lists which is changing the dynamics of shopper and retailer behavior,” said Pressman.

Back to basics
Customer service should still be the main focus for retailers, he suggested.

“Technology will play a greater role than before, but I don’t think it will take the place of person-to-person interaction. About 80% of transactions are still taking place in a brick and mortar environment.”