7B the migo IQ blog

July 22, 2016

6 major changes in brick-and-mortar retail

By Annie Mueller

Brick-and-mortar retail has come a long way. Take a look at the recent changes that are affecting current trends and will determine the best way for brick-and-mortar businesses to succeed in the future.

1. Goodbye, sales funnel. Hello, customer journey.

The sales funnel is gone. Now it’s all about the customer journey, a cyclical path which the customer can enter and exit at will, and at any point along the path.

What does this mean for brick-and-mortar retailers? It means that marketing has changed. Don’t market to particular points in an outdated funnel. Market to individuals, to your particular customers, who may be anywhere on their customer journey.

2. Customer service is the journey.

Customer service isn’t something you worry about after a purchase; it’s a key part of every point along the customer journey.

Superb customer service means winning customer loyalty, maybe for life. 70% of consumers are "willing to spend more with companies they believe provide excellent customer service." But poor, inconvenient, or non-existent customer service results in customers walking away, literally and figuratively; 91% of customers who feel they've experienced poor customer service will choose not to do business with you again.

Unhappy customers talk about why they're unhappy; but they talk to their peers, not necessarily to the company. A fair estimate is that only 1 out of every 25 or so unhappy customers will actually lodge a complaint to the company. The rest will go online, venting via customer reviews and warning their social networks away from doing business with your brand.

3. Customer service + customer journey = customer experience

Customer experience is what you get when you combine customer service and the customer journey.

Brick-and-mortar retailers have learned to focus on creating a great customer experience. Investing in a superb customer service is the first step. Understanding the customer journey, and adjusting your marketing strategies to it, is the second step.

To call them "steps" is really a misnomer. They're ongoing processes which enable you to succeed at the new focal point for brick-and-mortar retailers: creating a cohesive, responsive, satisfying customer experience.

4. There is no online versus offline.

The old dichotomy of ecommerce versus physical retailers is slowly crumbling, for two reasons.

First, all retailers are now online. Website, social media, apps, content marketing, we're all on board. That's where the consumers are, so that's where the marketing goes.

Second, online retailers are becoming physical retailers, too. From pop-up shops to flagship stores, online brands are finding that having a physical presence in the real world attracts consumers, creates brand awareness, and provides more concrete ways to cement customer loyalty.

Brick-and-mortar retailers, of course, already knew this.

And brick-and-mortar retailers have become savvy digital marketers, adopting new tools and competing in the online marketplace. The next change is one that the smartest brick-and-mortar retailers definitely saw coming.

5. Omnichannel is the only channel.

First, physical retailers realized they needed to add digital channels to their marketing strategy.

Next, ecommerce businesses realized they needed to have a physical presence to stand out from the online crowd.

From there, all retailers began investing in significant multichannel marketing, presence, and customer interaction. The multichannel mindset was a good step forward, a recognition that customers weren't going to confine themselves to a single method of interaction. But multichannel strategies still stemmed from a sales funnel mentality: the key to success, in the multichannel playbook, was picking and choosing the right channel for the right point of customer interaction at the right time.

Omnichannel (as this article explains well) is an approach that takes it cue from understanding the customer experience. Omnichannel thinking recognizes that customers will interact with a brand in many different ways, at various points in their customer journey, and that they want to encounter the same brand identity and excellent customer service every time, on very channel.

It's not about optimizing your marketing channels, anymore; it's about building a strong brand identity and incorporating company-wide customer service practices that exist across all your channels, consistently.

6. Competition is fierce because customers are overwhelmed.

The competitive retail market is getting even more competitive.

Online retailers are reaching for ever more market share. They're adding convenience, more services, and more product options to grab customers. They're expanding to brick-and-mortar to become an even more powerful presence in retail.

Customers have been trained by e-commerce businesses that they have endless options. So customers are ever-choosier about which brands, services, experiences, and products they choose. They can go online and research; and they do. They can ask their friends; so they do. They can search social media, websites, blogs, reviews, and more to find real people giving their opinions on any product or brand out there.

Customers are also overwhelmed. The endless options lead to a kind of product numbness, a blindness to advertising, that leaves marketers looking for catchier, better, more amazing ways to grab customer attention. But sometimes the best approach isn't to dazzle consumers with more, more, more; instead, it's to provide focus and simplicity so that consumers can take a breath and relax, and see the brand fit that is already there.

As retail competition grows even more fierce, the successful brick-and-mortar brands will learn how to give a powerful gift to consumers: the gift of less. Smart brands will learn to use big data, personalize, filter down the options for their consumers, and take away the stress of too much.