Is the stationary trade getting in its own way?

Is a comprehensive and good omnichannel just an illusion? At least this is the thesis that journalist Tobias Weidemann put forward in a very readable article for the magazine T3N back in 2018. There he describes a situation that we all know well, especially as customers: Shopping online and locally in a branch is different - and sometimes very frustrating. Employees don't know what is offered on the internet, goods are not available even though they are shown as being in stock, things can neither be experienced nor tried out on site and the service leaves a lot to be desired. But a lot of time has passed since 2018, and it feels like we've all lived an extra life since the Corona pandemic blew the world out of the water. Retail has faced and continues to face huge challenges and it is the pressure of these events that is forcing almost all businesses towards more digitalisation - towards a better omnichannel. Or?

The situation in the country is still tense. This is also shown by current surveys of the German Retail Association (HDE), which recently asked 500 retailers (excluding groceries) for their mood and opinion. The result: more than 55 percent of the companies have so far lagged behind the previous year's sales. Clothing retailers, in particular, have hardly been able to make up any ground despite reopened shops. On average, fashion retailers recorded only one fifth of the previous year's sales in the same period. For Stefan Geth, Managing Director of the HDE, the problem can be quickly identified: many people still don't go strolling and shop very selectively and very strategically. Shopping on demand has replaced the classic strolling through shopping streets.

Is that the best thing to offer customers?

So now is a good time for companies to recognise this behaviour and act accordingly. Omnichannel in particular can help retailers support these targeted purchases and accompany them with cross- and upselling. However, this requires a holistic and uninterrupted shopping experience, which needs more than just the introduction of a new tool or a half-day training of the employees on site. Rather, it requires an understanding that a successful omnichannel must know no barriers between on- and offline.

In his article, Tobias Weidemann describes several situations from his everyday life that he has experienced himself as a customer. He talks about dislocated limbs while trying out pre-ordered headphones and is annoyed that products are not presented on site - which negatively influences his personal purchase decision. He keeps asking the question: Is this the shopping experience you want to offer customers in 2018?

Corona changes the playing field - doesn't it?

But that was a good three years ago now. In another life, as it were! But: this question could still be asked in 2021. Because, despite extreme pressure on retail, only a few things have changed significantly in recent years. Even today, we are experiencing disruptions in omnichannel that we would not expect. And this is despite the fact that omnichannel is no longer just a gimmick for retailers today, but also a lifeline, especially in times of lockdowns. And that is bad news for stationary retail, which should cause a bad headache in many offices and planning departments. Are they just missing a great opportunity and hoping to simply sit out the problems of the present?

Another survey by the German Retail Association, which announced only a few days ago that the city centres and shopping streets were slowly being filled with life again and that many retailers were breathing a sigh of relief as a result, also shows a particular danger. Especially in the stationary retail trade, there is a feeling that the worst is over and that life will now go on as before. However, one should not forget a figure that hangs over the German economy like a sword of Damocles: 50,000.

In the same communication, the HDE renewed its forecast that up to 50,000 shops could disappear as a result of the Corona crisis. Even if current insolvency figures do not support this. According to HDE boss Genth, one reason for this was the suspension of the obligation to file for insolvency, which prevented a mass death of companies, but at the same time did not save these companies from going out of business. "Retail is quietly dying," is how Genth describes the current situation. Overall, according to the HDE, the stationary retail trade lost a good 1.1 per cent in turnover compared to the previous year and ended up with a total turnover of 499 billion euros.

Small e-commerce makes up ground

This figure may seem enormous at first, especially when compared to the turnover of pure e-commerce in Germany. After all, pure online retailers only turned over 87 billion euros in the same period, i.e. only a good 17 percent of this sum. However, online trade grew by almost 20 percent in the same period compared to the previous year. It would therefore be fatal for the stationary and branch-based retail trade to misinterpret the current situation and rest on its own supposed advantages - without really exploiting them.

Yes, brick-and-mortar retail is still a power in 2021. And it will remain so in the years to come. Also because it is still important for people to shop locally and on their doorstep. This is also proven by the ROPO effect, which we explained in detail in this article. In a nutshell, it can be explained like this: More and more people are getting information online, but end up shopping locally. Local proximity is therefore a great advantage of stationary trade and offers many opportunities and possibilities. If you manage to bring customers into your own shop with good and transparent information as well as product availability and order reservation options, you have a good chance of generating up- and cross-selling.

An omnichannel experience

However, a way of thinking is needed that runs through the entire company. After all, what is the point of customers finding all the information about an item online, learning that the desired product is even available locally - but then being disappointed in the shop? What do we mean by that?

A brief example:

Especially in the home office, a good microphone is a sensible investment. Therefore, it is all the more annoying when you have to you have to replace this piece of technology - in the middle of the week. Delivery times are an important reason why online retailing is not attractive. But you don't need it either - after all, the large electrical goods retailer with, according to its own information, over 140 locations in Germany not only has the desired appliance on offer online, but also has it in stock right outside your door. So it's quickly secured with Click & Reserve and during the lunch break it's off to the branch. Joy spreads, not only because you will soon have a new toy in your hands, but also because it can be so easy! Then the big sliding door opens.

No one feels responsible for you and at the checkout you are greeted by an annoyed cashier. "Reserved online? Do the checkout". She points to a separate area in the checkout area, which is deserted. Even the lights are off. After a good three minutes in the darkness, another employee finally arrives and scans the QR code on his mobile phone. He types briefly on his computer, then walks away without a word. Another ten minutes later he returns with a box in his hand and pushes it over the counter. He says goodbye with a "pay at the till". When asked if there are any accessories for the device in the shop, he turns around again as he walks and exclaims, "Nah, only online."

At the end of the shopping trip, you are happy to leave the shop again. Before going home again, accessories and equipment are added to the shopping basket on Amazon, which is delivered by the parcel carrier the next day. Is this the shopping experience that customers are expected to have in 2018 2021?

Aspiration and reality must come together

In our very real example, because it was experienced this way, the same problems resonate that Tobias Weidemann already criticised three years ago. If the specialist retailer had established processes that accompany and collect customers who make reservations online but ultimately buy offline, he would probably have made more sales - and left a better impression. And it wouldn't be difficult to achieve these effects. Because: the data needed for this is available. After all, customer data already exists before entering the shop and with a short scan in the branch, employees could have provided targeted advice and support. In-store apps in particular are a powerful tool that support sales staff on site.

But possible innovation does not end here. How about, for example, digital terminals in the shops, which in some cases already proactively and anticipatorily pull part of the customer journey from the digital space into the local branch. You certainly know a company that is a perfect example of this. Either because they are convinced customers themselves, or because they are but don't want to admit it: McDonalds. With its restaurants of the future, the US burger company has introduced terminals that talk to its own app and exchange data almost everywhere. After just a few seconds, the system knows the customers and can make individual offers, make recommendations, upsell and even offer an ice cream or a coffee based on the time and the current weather. Even check-out takes place directly at the terminal. All that remains for customers is to pick up their food at the counter. No one has to wait long, no one is overlooked and many customers are happy about the experience.

Of course, retailers in Germany don't have to start flipping burgers now. But they must learn from the courage of McDonalds. The internet offers enormous opportunities for retailers and omnichannel in particular can combine the strengths of the digital and physical worlds in a great way and thus offer shopping experiences that are simply fun from the first click to the moment you leave the shop. However, this requires not only technology, but people with good ideas and the will to tear down the existing hurdles. Especially in times of crisis, it is a good time to break new ground in order to continue to be successful. And one question helps:

What is the perfect shopping experience I want to offer my customers?

And how do I make sure it doesn't just remain a promise?

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