New Research: What's In Store For Stores?

By Christine Kern, contributing writer

What every retailer should be thinking about as they forge ahead in 2014

A new benchmark report from RSR Research seeks to assess the current state of brick-and-mortar retailers and what is necessary to rejuvenate the in-store experience and reclaim their place in the retail ecosystem.

Though most current retail growth has been seen in digital channels, shoppers continue to visit brick-and-mortar stores, and the extinction of retail stores is not on the horizon as stores remain the source of over 85 percent of retail’s aggregate revenue.

As Suzanne Bearne pointed out in her piece “In-Store Tech, Sales Driver of Hype,” even high-end, high-tech self-service solutions are but marginal drivers of sales.  Employee tools are much more widely used and deliver overall better results, especially dollar-for-dollar. 

RSR Research’s studies have shown that winning retailers focus on the “how,” not on the “what” of their business.  That means that rather than focusing on getting and retaining customers, the leading retailers were more concerned with training employees, reducing reaction times, and managing costs. 

Based on the data in the report, the study found that while showrooming and omni-channel pressures dominate media conversations, fundamental and traditional pressures are at the top of store-based issues, including things like consistency across stores in a chain, working within a fixed budget, and the fact that consumer price sensitivity continues to rise.

The study also found that Retailer’s sales performance dramatically affects their perceptions of what will make their stores more attractive venues to customers, with winning retailers having more success prioritizing their employees’ work schedules. 

Also, the study found that while all retailers face similar organization inhibitors, the technology infrastructure problem seems to be minimizing for the successful retailers.  Instead, they worry that putting technology in the hands of store personnel can be a distraction rather than a useful tool.

Additionally, the study found that retailers are aware of the challenges of brick-and-mortar stores, in desperate need of systems overhauls for both customer and employee facing technology, and the report provides an analysis of which technologies hold the most bang for their buck to help retailers “get there.”

And finally, the report offers a number of bootstrap recommendations to help retailers make the most of their situations. They offer the following Key Performance Indicators (KPIs):

• Labor Productivity Benchmarks: retailers need to document the types and number of tasks that can be completed by in-store employees, and benchmark any new technology against that baseline to measure productivity levels.
• Shopper Satisfaction Surveys: These are significant for measuring consumer feedback, and can include exit interviews from select stores, preferable an in-person survey.
• Market Basket/Average Transaction Value Analysis: Assess whether a new technology produces a larger market basket or a higher average transaction value.
• Conversion Rates: Using a traffic counter can not only measure overall traffic to purchase rates, but also determine whether lines at the register are too long or if promotions are actually drawing in customers. 
• Participation in Loyalty Programs: Most retailers have established loyalty programs, but few are actually using these programs to determine the effectiveness of changes they have made.  Loyal customers are a source of directional information regarding their in-store experiences and can serve as a barometer for changes.