31 May 2018   

5 min read
“Physical retail isn’t dead. Boring retail is.” Steve Dennis, contributor, Forbes

With weekly bricks-and-mortar shoppers increasing in the last three years from 36% in 2014 to 44% in 2017 and retailers opening 4,080 more stores in 2017 than they closed, with plans to open over 5,500 more in 2018, physical retail is clearly alive and well. But it is different. Today, retailers that are delivering differentiated and personalised service and memorable and unexpected experiences are doing well. Those retailers who are offering one-size-fits all marketing, mediocre service, and uninspiring store environments and merchandise are struggling.

It’s been clear for some time that experience sells – 72% of Millennials prefer to spend money on experiences than on material things and 86% of buyers will pay more for a better experience – but how do retailers build a successful retail experience?

Senior Research Consultant at ACRS Research Unit, Monash University, Dr Eloise Zoppos believes the answer lies in using empathy to create and enhance the retail experience.

In retail, empathy is the ability to understand and respond to the customer, know what products they need, understand what they want to say about themselves, and therefore being able to design experiences that meet (or exceed) their expectations.

 

“Empathy means that the retailer has an emotional attachment to their consumers and as a result, enables them to better design and develop experiences that meet and exceed consumer expectations. Additionally, because empathy is something that is offered by retailers, rather than a value that is ‘owned’ by a brand such as authenticity, it offers a key point of differentiation,” she says.

With research suggesting that customer experience will overtake price and product as the key brand differentiator by 2020, Zoppos says that there are a number of ways that retailers can provide an experience that feels personal for customers.

“Without a lot of differentiation between retail brands, the key point of difference will come down to how people experience the brand – and how that brand makes people feel.

“When it comes to bricks-and-mortar retail, a great customer experience needs to be more than just a transaction, it needs to be an experience that provides a memorable and positive lasting impression that will leave them wanting more.

“It’s about retailers finding the experience that’s right for their brand. At the heart of it though, it’s about is focusing on customers as individuals and not just as consumers.”

 

Here’s how to use empathy to create retail experiences:

1. Humanised touches – focusing on the customer as an individual

2. Sensory spaces – blending immersive learning activities into your store to reinvigorate customer interest and brand ownership

3. Integrated wellness – making fitness and healthy lifestyle experiences a core offering within your store

4. Third space connections – creating community spaces that bring people together around the brand outside the shopping transaction

5. Tech-enabled personalisation – using augmented reality to create a personalised try and buy experience

 

So who is doing it well?

Zoppos says that “understanding customers isn’t just about retailers being better or different, it’s about applying empathy across the entire journey-to-purchase to provide a seamless, memorable experience.”

There are many examples of retailers who are demonstrating to their customers that they understand just who they are and what they need.

Like Ikea’s rainy day special on umbrellas. This is a very simple example of how understanding what the customer needs and when they need it is important in establishing an emotional connection.

When it comes to creating sensory experiences, Samsung is using immersive learning activities in store to build confidence in its products and to sell an experience rather than sell a product.

Lululemon has moved further into the wellness space with the launch of its ‘Mindfulosophy’ pods, a destination for visitors to relax and meditate ‘off the yoga mat’, which is a natural extension of its activewear range.

When it comes to third space connections, Starbucks and Japanese bookshop Tsutaya have artfully merged public places into thoughtfully designed, meaningful and intimate spaces for their customers, which gives them a reason to dwell and to come back. Tsutaya is the perfect representation of a space that has been designed to bring people together with a cozy bar and lounge, outdoor spaces, comfortable chairs and good lighting. Starbucks bills itself as ‘the third space between work and home’.

Customers love in-store technology and Nike has responded by integrating the physical store and digital technology to enable personalisation in a way that e-commerce can’t compete with. Nike’s augmented reality experience allows customers to visually tailor sneakers and running shoes and view them in real time. Using a hologram, customers can see their choice of colours and designs illustrated on the shoe and this interactive design experience is the perfect way for Nike to sell more sneakers.

Of course, says Zoppos, to be effective, the empathy needs to be authentic.

“With the rise of omni-channel and online shopping, customers are becoming more and more savvy with their journey-to-purchase – and that includes customer experience. Empathy is such a strong emotion that customers can easily spot an experience, message or campaign that isn’t authentic or isn’t in line with the retailer’s overall branding.”

As retailers continue to explore new and exciting ways to serve their customers, they must first learn to walk in their customer’s shoes and focus on empathy.

“It’s about connecting with your customers in a meaningful way by showing you care about them on an individual level,” says Zoppos.

And the end result? Happy customers, brand loyalty, and a better bottom line.

Interested in learning more about empathy in retail or other research from ACRS? Please contact Eloise Zoppos at Eloise.Zoppos@monash.edu


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