Think Tank: Hey Alexa, Consumers Don’t Want to Talk to a Robot When Shopping
How, where and why we shop are all changing. And these changes are not only altering our expectations and experiences, but also reshaping the entire retail industry.
In this environment of constant change, many retailers are struggling to keep up. This was evident in a recent study NetSuite conducted with Wakefield Research and The Retail Doctor, a retail consulting firm created by expert consultant and business mentor Bob Phibbs, that found retailers and shoppers are simply not on the same page.
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The disconnect between what retailers thought they were delivering to the consumer and what consumers thought they were getting back was eye-opening. The study found disconnects in areas spanning the overall retail environment, social media, personalization and the use of emerging technologies — chatbots, artificial intelligence, virtual reality, etc.
Let’s take a closer look at some of the most notable disconnects and what we can learn from them.
Brick-and-Mortar Is Not Dead
While many things are changing, it is important to note that some things are staying the same: physical stores still matter. In fact, 97 percent of consumers surveyed say they still enjoy going into physical stores, specifically to shop for groceries, clothes, shoes and furniture.
That doesn’t mean business as usual though. Consumer expectations of physical stores continue to evolve. While 73 percent of retailers feel their store experience is inviting, more than half of consumers say they are stressed, anxious, alone, overwhelmed or confused while in stores. Change is clearly needed.
The study found that customers want simpler store layouts, the ability for staff to place orders on mobile devices and in-store kiosks that let them purchase products when they’re unavailable in-store. In other words, they want more choice and convenience, including not having to wait in lines. When asked about the specific technology they do want to use, self-checkout kiosks topped the list.
In response to this demand, a number of brands have started to streamline and simplify the shopping experience. For example, Hammitt, a luxury handbag designer, is in the process of creating pop-up shops with special displays inside Dillard’s department stores. This will enable Hammitt to reach a broader set of consumers in a location that is even more convenient for their customers.
Social Media #Fail?
The role of social media seems to be misunderstood. While 98 percent of retailers believe that social media is critical to building relationships with consumers, just 12 percent of shoppers said social media had any impact on their relationship with brands.
That’s not to say retailers should abandon social media. It’s a critical channel that is only growing in importance. Instead, it’s important to recognize what social media can and can’t do. Social media is not some kind of Band-Aid that will fix the customer experience and other business issues on its own. It’s a channel to engage in conversation with your different audiences. Talk with them, not at them.
During a panel at NRF in January, Outdoor Voices, an active lifestyle brand that creates technical apparel for recreation, revealed several ways it uses Instagram to engage customers, including soliciting product ideas, rallying a community of recreationalists with a hashtag to showcase activity, leveraging user-generated content, and rapidly growing their network of macro- and micro-influencers. By focusing on engagement over volume, it was able to build both emotional connections with its customers and a wider social conversation.
Getting Personal
Personalization provides both a challenge and an opportunity. Forty-two percent of consumers said they would pay more for better personalization, but the vast majority of retail executives — 89 percent — don’t think they have the tools and data necessary to deliver a better experience.
To complicate matters further, retailers — and all other companies — need to walk a fine line when it comes to personalization that boils down to one question: How personal is too personal?
According to the study, retailers have work to do to answer this question. More than half — 58 percent — of consumers are uncomfortable with the way stores use technology to improve personalization and almost half — 45 percent — reported negative emotions when they receive personalized offers online.
It’s not all bad news though. Retailers such as Toad&Co, an active lifestyle apparel company providing socially and environmentally committed garments for men and women, have found the answer. To learn more about how to personalize the experience for its customers, Toad&Co spent the time examining how its shoppers interacted with it across all channels. The insights provided allowed Toad&Co to not only organize its customers into five tiers, based on order volume and spend, but also personalize its interactions with customers accordingly.
Shiny New Technologies Are Not the Silver Bullet
While retailers are aware that they don’t have the tools and information needed to meet rapidly changing customer expectations, the study found that we should all take the hype around AI, VR, chatbots, etc. with a pinch of salt.
For example, only 14 percent of consumers believe new technologies like AI and VR will have a significant impact on their purchase decisions and less than half (48 percent) think these technologies will have any impact on how likely they are to go into a store.
The same is true for chatbots. Yes, we increasingly use voice-based systems such as Alexa and Siri in our personal lives. And yes, these technologies have the potential to change the way we interact with brands in the future, but the key word here is potential. Back in the here and now, the study found that 95 percent of consumers don’t want to talk to a robot when shopping.
What this means for retailers is that they should focus on the underlying business issue and the customer experience they want shoppers to have.
For example, Alton Lane, a maker of formal men’s wear, wanted to ensure customers get suits, shirts and pants that are a perfect fit while providing a relaxing shopping environment. To achieve these business goals, it uses 3-D body scanners that take 300 measurements and has set up its stores to look more like a lounge than a shop, with a bar, cozy chairs and TVs.
Conclusion
Every industry is facing ever-changing expectations, not just from consumers, but from employees, partners and myriad stakeholders. It’s one of the biggest themes that come up time and time again in our conversations with organizations of all sizes.
The retail industry is at the forefront of this change and while it may seem daunting, it creates amazing opportunities for growth if you can stay focused on what matters. We have seen this firsthand working with brands such as Outdoor Voices, Alton Lane, Toad&Co and Hammitt as we have helped them integrate the digital and physical worlds to create new ways of selling products and rethink traditional business models.
The reality is retailers don’t have a technology problem. And technology for technology’s sake isn’t going to help your business survive and thrive in today’s shopping environment. Instead, you should stay focused on your core business goals. Stay focused on understanding the changing needs and expectations of consumers. Then and only then, can you determine which technology will get you there.
Jason Maynard is senior vice president of global field operations at Oracle NetSuite.
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