Retail

Retail Reinvention: Why Retail Doesn’t Need Salespeople

I was all set to write a very different piece this week. Then I stumbled upon a Newsweek story published on February 26, 1995 titled The Internet in 1995 — blah.

Penned by astronomer, professor, author and hacker capturer Clifford Stoll, the article was one big rant about his absolute disdain for a technology that he said would never have a future: the internet.

I mean this guy was emphatic that the internet was one big dead end.

“Commerce and business will shift from malls to networks — baloney,” he wrote. “We’re promised instant shopping — just point and click. Stores will become obsolete. Even if there were a trustworthy way to send money over the internet — which there isn’t — the network is no substitute to the essential ingredient of capitalism — salespeople.”

Jeff Bezos, who launched Amazon six months later, must have had a pretty big belly laugh when he read that.

“Do our computer pundits all lack common sense?” Stoll continued. “No online database will replace the daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works.”

Well, he may have had a point with that last one.

Up until then, Stoll had made a reputation for himself in the online world for having snuffed out Markus Hess, the guy who’d successfully hacked into a bunch of U.S., EU and East Asia military and industrial computers in the 1980s and sold secret intelligence he obtained from them to the KGB for the princely sum of $54,000. So, it wasn’t as if Stoll was a technology rube or a total Luddite — he was among the early adopters of the internet back when it was really tedious to use.

But, after this piece, Stoll was infamous for dissing the innovation that launched the Information Age and transformed just about every aspect of life as we know it, worldwide.

 

No Humans, Just Bits And Bytes

Stoll’s big beef was that the internet had no future because it was devoid of human interaction. What kind of world is it when instead of meeting our friends for coffee, we meet them instead on the internet, he asked?

What Stoll obviously missed then is one of the most fundamental reasons for why the commercial internet has been one of the most significant developments of our lifetime.

The internet hasn’t deprived consumers and merchants from engaging in commerce because people weren’t able to deal directly with a human being.

Access to the internet has actually expanded those opportunities and the value exchanged between people and businesses because they no longer had those dependencies.

The internet has also shifted the expectations for what those interactions must be to add value when they do happen the old fashioned, face-to-face, way.

Take retail salespeople — Stoll’s self-proclaimed cornerstones of capitalism.

Back in the so-called “good old days” of retail, salespeople used to be the only source of information consumers could consult about a product before they made a purchase. Sure, there were ads in newspapers and magazines, but before John Selfridge revolutionized the department store model by putting goods out on display for everyone to see, customers had to ask a clerk behind a counter to fetch the things they wanted to buy. Salespeople presented those items, explained their features and functions and persuaded people to buy.

That role, persuading people to buy, remained the primary job of the sales clerk through the 1990s. I remember working part-time at a major department store in Baltimore while I was going to school. Then, my training wasn’t about the mechanics of taking money and working the register, but how to tie a scarf 20 different ways so that I could sell a boatload of them. I did — and Baltimore never had so many fashionably accessorized women when I worked there <wink>.

As we approached, and then entered, the 2000’s, and that focus began to shift a bit.

Relationship selling took a front seat and tools and tactics emerged to help get consumers back into the stores to make repeat purchases. Loyalty programs began to pop up everywhere. Emails, snail mail postcards and phone calls from motivated sales people were used to remind consumers to visit again. Offers aggregators launched digital programs to reward consumers for repeat purchases. A variation on that theme — daily deals and flash sales — gave consumers a taste of a product or a service they might not have on their favorites list by offering them discounts to visit a store and then make a purchase — with the hope they’d turn into regulars.

But, with internet sales were a microscopic piece of overall retail sales, driving consumers into the store was the main focus so that, once there, a relationship between consumer and the store — via a salesperson — could be established and sustained.

 

Fast forward to today.

In a digital, mobile and always-connected world, consumers have access to nearly perfect information about what they want to buy.

The notion of going to a store to see and interact with a salesperson to learn about a product and then visit another to compare brands and prices is a relic of the past. Salespeople have been replaced by product reviews, recommendations based on buying history and “editors” who curate items and selections to guide browsers to buy based on trends and the things they’d like to sell — all before consumers set foot into a store to buy — if they even do.

Consumers feel confident committing to purchase because they’ve been able to rely on their own research instead of a smooth-talking salesperson or the limitations of what any one store may have in stock.

For some purchases, like automobiles, the ability to access information online before a purchase has been transformative for consumers by removing the sales gamesmanship (“Let me take this offer to my manager to see what I can do…”) and replacing it with a transparent price-for-value equation that levels the playing field between consumers and dealers.

 

So, today, when that more educated buyer walks into a store they have a totally different expectation for how their “human interactions” should go — with a bar that’s been set pretty high — by their online shopping and buying experiences.

 

An informed buyer now wants an efficient transaction — I came to get that coffeemaker, your site said that you carry that brand at this price, so please get it for me. The onus has shifted from the salesperson in sales mode to operational efficiency mode, so that the consumer can get in and out of the store with what the coffeemaker they walked in to buy.

 

Service — not sales — is the new human retail touchpoint

It almost has to be that way for retail to remain relevant and competitive.

The composition of the retail workforce is changing. Slowing foot traffic has physical stores slashing jobs right and left. Stores are now relying more on part-timers and even gig economy workers to fill open slots. Turnover makes the ROI of training workers to sell a challenge too, since most of them won’t be there long enough to win salesperson of the year award or develop relationships with their customers.

But tools and technologies put in the hands of anyone — including the consumer — can make the buying process efficient while de-risking and even transforming the traditional retail sales model. Retail sales no longer have to rely on the superstar salesperson to move product. They can, instead, invest in tools and technologies that can be used by anyone walking the floor that provide real-time information about products, offers and even the people who walk through the door.

Service in support of sales that provides a great customer experience and the incentive for the consumer to buy.

Putting those tools and technologies put in the hands of consumers only accelerates this shift.

 

Take Starbucks.

Consumers no longer feel a special affinity to waiting in line to make eye contact with their friendly barista to get their soy latte with an extra shot. They’d rather pop open their digital app and order it ahead of time. Their relationship has shifted from store and barista to store and fulfillment counter. The app is their efficient digital intermediary to a more satisfying physical store experience. The “human interaction” that’s most important is the person they may never see, who makes sure their order is right and ready when they walk in.

Great customer service drives more sales.

 

Take Macy’s

Their partnership with IBM last summer is about putting a digital intermediary — Watson — in the hands of consumers so that they can find what they want in their stores. Still in pilot mode, Watson is about shifting the role of the sales associate from having to make the sale to servicing the customer who’s ready to buy. Watson, if it passes muster, will democratize sales and service at Macy’s so that anyone equipped with a Watson-enabled app can capably help a consumer in the store.

They’re hoping great customer service drives more sales.

 

Then there’s J. Crew and Neiman Marcus

Both stores provide sales personnel with digital tools that improve the odds that a customer will leave a buyer. In the case of J. Crew, this tool is on a communal iPad that all sales associates can use to place an order for an item that is out of stock in one store but available online. In the case of Neiman Marcus, it is via an app on a store issued iPhone assigned to each sales associate that can do the same thing. In both cases, payment and shipping is pegged to the account on file online.

Great customer services drives more sales.

Now, one of the things that I think Stoll implied when he was dissing the internet twenty-one years ago was that dealing with human sales personnel meant dealing with an intermediary who could be trusted to look out for the best interests of the consumer. The randomness of the internet, he implied, was no substitute for the knowledgeable salesperson capable of delivering information about a product to a consumer ready to buy.

But what he didn’t see was how the internet has evolved to become the consumer’s trusted digital intermediary — independent, transparent and devoid of a salesperson’s incentive to want to sell. The internet gave consumer’s access to the kind of human interactions that the consumer most trusted — feedback from those who bought the product and were willing to share their experience.

Digital natives like Amazon had to think that thru before they even opened their virtual doors. Their bid to establish trust had to be built a very different way — with a promise to deliver the best prices to consumers, and over time, to do that and get the product to the consumer for free in two days. Instead of salespeople they encouraged reviews and recommendations. The virtuous circle of low prices, free delivery and reviews and recommendations to reinforce confidence in the buying decision fueled their growth. Today, their physical store experiments are about extending the power of their digital intermediary — their apps and ecosystems like Alexa — to deliver the products that consumers want to buy in a technology-facilitated storefront built around service that delivers a great customer experience.

Take for example, the news last week that Amazon is building a grocery store outside of Seattle that’s all about fulfilling orders placed on line is further proof of that shift is just a recent proof point. Consumers will be given a choice of having groceries delivered to their car or picked up inside of the store during scheduled windows of time.

Retailers today are facing the reality of this shift and confronting the reality that the asset that they once held most dear — the salesperson — may not offer the competitive advantage that it once did in a world in which decisions are made before a consumer ever steps foot inside the front door.

So I’m glad I ran across Stoll’s piece. Maybe he got it wrong — well, he all but admitted years later that he did — but he sure stimulated my thinking on what the internet has done right, and how it is transforming commerce.

And the lessons that it holds for all of us as we contemplate our next moves amidst these subtle yet powerful shifts in how consumers search, shop and buy.

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