A £30M store optimisation programme, to improve store performance, enhance the customer experience and increase sales opportunities
Online is dead, long live the store! Sounds crazy but facts have lead me to believe that bricks and mortar are here to stay and online ONLY retailers aren’t. Customers want to see, feel and try out products and take them home immediately. Visits have dropped, but because of digital, each trip becomes more purposeful. Customers know what they want and are more likely to buy when they step into a real store. Online does not change the volume and speed of consumption – all this stuff we want to buy must be stored somewhere. Without stores, we need bigger warehouses. Unless you’re Amazon, online ONLY retailers are doomed!
Savvy retailers recognise the connection between online and offline experiences, but solve problems for customers in their bricks and mortar first. On arrival at a store if you can’t park, or click then wait to collect, or a staff member can’t help you – you’ve blown it! Lasting impressions about a brand are made in the real world, not the virtual one.
Vodafone retail was moving through this same transition. Following a period of retail expansion, they needed to optimise the in-store customer experience to maximise sales. Stores were developing from transactional to service, sales and advice – but they still had queues (now a dirty word in retail!).
I was invited to a meeting with Jonathon Dryland and his team from Vodafone to discuss plans to introduce a new queuing system and change the format of the store. I asked: “why do you need a queueing system if you have queues”. Now, after a very long discussion about queueing, he asked if we could look at three of his busiest stores to decode the problem and advise on how best they could achieve their goal of optimising stores.
And we decoded a lot of problems! Walk-outs at peak were as high as 25%, staff were spending 36% of their time on only 11% of transactions and customer satisfaction was very low. We also found that customers had a threshold for waiting. If a customer waited over 3 minutes, they were less likely to buy than if approached under 3 minutes. Even more interesting was that 60% of customers did not want to buy, but needed help and advice. Good service leads to sales, yet stores were not equipped to support this – boom! We uncovered other journeys, unsupported, including quick transactions, business customers, self-serve, collection and returns. To optimise the customer experience and ‘beat the queues’ the answer was to configure in-store processes, systems, layout and staff roles in line with the different customer journeys and needs. A queueing system alone would not solve the problem.
Working alongside the Vodafone team we set about implementing our proposed changes at each of the three stores to measure the impact on the customer experience, sales and profitability. Across all three stores conversion rates increased by 2%, walk-outs reduced by 25% and customer delight index increased from 3 to 4.5. In addition, stores experienced significant improvements in staff productivity, store utilisation and overall performance. The store optimisation programme was then successfully rolled out to 150 stores.
Vodafone Retail have now moved on from store optimisation. However, this project sends a big message to retailers with physical stores moving through digital change. Bricks and mortar are here to stay! They hold a significant advantage in their ability to satisfy shoppers. But there are now less chances to strike it lucky. Until Amazon fulfil their plans to deliver a warehouse in the sky and digital becomes so experiential there is no need to visit you in person, an experience such as queueing will make or break you!
AT A GLANCE:
- A study of the customer experience at 3 stores to decode problems and build a case for change:
- High levels of waste – 36% of staff time spent on 11% of transactions
- Walk-outs as high as 25% during peak times
- 10% of customers would purchase when approached after 10 minutes, >50% if under 3 minutes
- 60% of customers wanted help and advice – yet no service, facility or capability to support this
- Customer journeys not defined or aligned to maximise the use of the store or with staff roles
- No real-time management information for stores to plan and manage customer experience
- An implementation programme, commencing with a pilot followed by workstream roll out:
- Customer journeys aligned to new services, facilities and roles e.g. Sales Floor Management, Help & Advice, Business – increasing the utilisation of the store and exploiting commercial opportunities
- Queue management system configured to support customer journeys and provide real time data
- Activities designed to go faster – eliminating waste and improving serving times
- Activities designed to do less – introduction of more self-help, less time spent on low value work
- A dashboard to provide real time data by exception, supported by simple alerts and triggers
- Staff training in customer approach activities and customer service skills
- An average 2% increase in conversion rate at busy flagship stores
- 20% to 25% reduction in number of walk-outs
- Customer Delight Index increased from 3 to 4.5 across pilot stores
- Significant improvements in staff productivity, store utilisation and overall performance