The state of the big-box store is constantly changing. Rather than buying a product at the retail price, consumers are shopping around online and getting better deals. In fact, a growing number of consumers are participating in something called “showrooming,” a trend whereby customers test the product in-store and then proceed to acquire it online for a better price.
Wal-Mart CEO Doug McMilon believes that big-box stores will probably change moving forward. Due to ecommerce and the combination of retailing and ecommerce, stores will likely shrink in the future.
In order to circumvent the declining in-store sales, some franchises have decreased their prices in the hopes of increasing business and getting customers to find great deals. Some have even added products to their shelves that may not have otherwise been seen before – McMilon is considering installing 3D printing capabilities in Wal-Mart stores in the future.
Is this measure working? Not necessarily so.
According to a new “The State of the American Consumer” report from Gallup, quality customer service reigns supreme and has become more important for the customer to remain loyal to that brand rather than enhanced advertising and lower prices.
The study authors conceded that price is an important element for the consumer, but it’s not the be all and end all to a customer returning to the store or not. To compete and stay in business, companies must improve the customer service experience.
“Gallup research has shown that customers only shop based on price when price is the only thing that separates competing offerings. In other words, customers shop based on price when there is no emotional connection to a particular retailer— when they are not engaged,” Gallup stated in its report.
The polling firm explained that customers who are engaged and admire the brand are the most profitable consumers. This means that they will likely go out of their way just to shop at certain stores because they care more about the service than the price, such as Apple, Nordstrom and Starbucks.
Ed O’Boyle, global practice leader at Gallup, told CNBC that management needs to install better staff on the floor to help customers and make sure there are certain products available to purchase.
“If you have things in stock that people want and your salespeople are really helpful and deliver good service, that’s when you hone in on driving engagement,” O’Boyle said. “We have abandoned the talent profile of having great salespeople, who want to take care of customers who drive things forward in the store.”
In the end, the report strongly notes that customer service is a crucial aspect of business and this can assist conventional retail stores in staying open and differentiate themselves from modern businesses that are online or heading in the direction of ecommerce.
Despite the statistics, some say traditional brick-and-mortar stores will win out. Toys ’R Us Chairman Jerry Storch told CNBC in 2012 that stores will pretty much become distribution centers for the Internet consumer.
