Retailers Making Due with Less – What Does this Mean for The Customer Experience?

A report recently released by The Globe and Mail revealed that some retailers who are looking to boost productivity to combat increasing competition are scaling back their workforces. The article reports that over 45,000 retail jobs were eliminated between 2008 and 2011, with only a small hiring spree in 2012.

This is largely because of the online e-commerce boom. To save on head count and labour costs many retailers have turned to expanding their e-commerce portfolio which leads to increased margins and reduced overhead and infrastructure costs – a retailers dream!

So what do these major changes mean for the customer experience? Well, for the customer who still likes to visit bricks and mortar retail stores (like the grocery store for example), a decreased workforce may mean longer line ups, substandard retail merchandising and an overall reduced customer experience.

A reduced customer experience can bring negative consequences to both the retailer and the brands who have their products listed. A customer who has a bad customer experience with a brand because product is not tagged or not in-stock or easily accessible can cause the brand to lose the customer – perhaps even permanently if the customer tries another brand that they like better. The same is true for a retailer whose store is cluttered, confusing to navigate, short staffed, and/or has long line ups. This in fact can cause some customers to shift their attention to e-commerce solutions and very likely not yours if the consumer has already had a negative customer experience.

With the growth of social media, customers now refuse to ignore a bad customer experience, and instead will take to their social networks to vent about their frustrations. Since consumers are highly influenced by the things they read on their social networks, the customer experience is now paramount, and making sure that the customer is happy when they leave the store, especially if you want them to return.

Retail intelligence is a smart way to combat these challenges. When your product is being sold at a retail location it is essential that you are aware of the customer experience – this is true whether you are a CPG brand or a retailer.

There are two main reasons that brands and retailers use retail intelligence. The first is to improve the customer experience at the point of sale. The second is to see what the competition is doing. Both of these things are crucial if you want to maintain control over your brand and improve customer experience while still staying on top of the competition.

Retail intelligence through planogram audits and mystery shopping allow you to improve your retail merchandising by making sure that products are being tagged, re-stocked, and located where they need to be. The only way to improve your customer experience is to be really aware of what is happening on the ground so that you can make small adjustments that lead to increased sales and customer retention!

One thing is for certain – retailers’ highest expense is the cost of labour. It can be tempting to cut back, but decisions like reducing your labour force must be thoroughly thought through. The retail industry is so competitive that attempting to make due with less can actually be counter-productive. Retailers who do not want to maintain a full blown workforce and prefer to bring in retail and merchandising support should consider aligning with a retail merchandising company that can provide retail support on an ‘as needed’ basis. Brands: you have little control over the actions of your retailers but stand to lose the most. Many brands also turn to retail merchandising companies to take the power out of the hands of retailers and to have more control over their own retail merchandising.

For more information about improving the customer experience through retail intelligence, or to find out more about our other merchandising services, please visit www.storesupport.ca or call 905-847-6513.

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