It's often easier to shop from home than it is to visit a store, but that does not mean brick-and-mortar retailers have no advantages over their digital rivals. Traditional stores can obviously offer shoppers the ability to handle merchandise, try it on, and see exactly what it looks like. That can minimize returns and lead to higher customer satisfaction. But it's not the most important thing to consumers, according to a new study from BRP.
The retail management consulting firm found that 79% of survey respondents "indicated personalized service from a sales associate was an important factor in determining at which store they choose to shop." The study also found that 64% of consumers "are comfortable with retailers identifying them via their mobile phone when they enter a store, as long as it means they are offered a personalized experience."
It's all about me
Digital retailers -- at least the biggest ones -- offer personalization. When you shop on Amazon (NASDAQ:AMZN), the company takes advantage of everything it knows about you. That plays out in what Amazon.com shows you, the deals it offers, related items, and reminders about things you bought in the past.
Consumers want the same thing in a brick-and-mortar store, but they want personalized service from a person. That's not as easy to deliver as technology-based suggestions, but it has the potential to be more rewarding.
"Effective customer engagement requires retailers to offer a personalized, relevant, compelling and consistent experience across channels," said BRP Principal Ken Morris in a press release. "In today's crowded and highly competitive market, personalization is a critical component for optimizing the customer's shopping experience."
To offer personalized service, retailers need to identify customers as they walk into the store. That's something that most consumers (64%) are OK with, but it's not something most stores can do.
"Customer identification is necessary to personalize the in-store shopping experience; however, 63% of retailers can't identify their customers prior to checkout, which is too late to empower the associate to influence the current purchase decision," Morris said.
Let's get personal
While brick-and-mortar retailers currently lag behind consumer demand when it comes to personalization, 53% of stores intend to make it a priority in the coming year. In addition, 48% of retailers currently offer personalized rewards based on customer loyalty, and another 30% plan to do so within two years.
For physical stores to succeed, they have to give consumers what they want. That means offering a true omnichannel experience and adding value to visiting an actual store. Amazon, for example, knows what sizes a consumer has purchased in the past. That's an easy bit of personalization information that a sales associate can use to save a customer time. Online storefronts also know what you have been searching for, and stores should be able to use data from their websites to help staff in their brick-and-mortar locations.
Of course, there's a fine line to how much knowledge is too much. Most people have likely searched for something that's a one-time need, and find it annoying when Amazon keeps bringing it up. Brick-and-mortar retailers have to figure out how to offer personalized service without being intrusive. "Mr. Jones, I see you've been looking for a New England Patriots hoodie" might get a better response than "Mr. Jones, I see you've been shopping for adult diapers."
It's not an easy formula to figure out, but it's one that can be navigated by bringing the customer into the loop. Ask for permission and let consumers opt in (or out) as they want. Move toward giving people what they want, while making sure they control the experience, and physical stores may be able to regain some lost ground in retail.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.