Merchant Innovation

The Overlooked Truths Of Holiday Retail

With just a little over a week to go until Christmas (get those Amazon orders in, only seven days left with free two-day shipping) and the new year officially breathing down our collective necks, the end-of-the-year wisdom is officially upon us all.

The last two weeks of the year are the traditional time for the experts to take stock, pat themselves on the back for all their correct predictions and refashion all their incorrect predictions into correct ones — or into ones that have simply failed to be correct yet.

And while the next few weeks will offer all sorts of big overviews from the tippy-top of payments and commerce — and we plan to bring you many of them — we thought, to kick off the annual season of sophia (Greek for wisdom), we would take our expert advice from a slightly different place in retail than normally gets a big showcase: the middle.

We spoke to retail managers and workers about building that all-important customer experience, what works, what doesn’t and what the reinvention of retail looks like in real time. What we got back were the things everyone should know about retail during the holiday season and beyond but sometimes forget.

The Experience Should Convey Some Understanding Of The Customer

As digital commerce advances, powered by smart devices and consumers that are quite literally always online, it is getting harder and harder to pry customers off their couches and into the store.

Which has led to the year’s near obsession with “experience-based retail” and the idea that what physical stores lack in pajama-based commerce’s (heretofore to be called pajamerce) ability to provide convenience, it can make up for in its ability to provide uniqueness.

What those experience are can vary: H&M made a one-day couture upgrade to Balmain, Macy’s is putting bowling alleys and SoulCycles in its big urban center stores, Estee Lauder has installed custom-lit makeup testing areas and if Target can put a beacon on it, it will put a beacon on it.

And when it works, it works well.

When it doesn’t, oh boy, as one assistant manager at a large national appliance and home goods chain explained to us.

“I have been to three trainings this year in preparation for an ‘experiential acquisition’ display or promotions that were occurring. All three were interesting, and two of them maybe were useful. It is hard to tell if something is pushing up foot traffic in a 100,00-square-foot space unless it is really successful.”

One promotion, she noted, which she and staff spent “a really significant amount of time on,” was just obviously not going to work from the outset, as it was an IoT for tools and pitched at the store’s large base of independent contractor customers.

“We have done IoT demo-based promotions, and they’ve been great. In appliances, it is a thing people are interested in. But if there are people on Earth less interested in the Internet of Things than small-scale professional contractors, I can’t imagine who they are.”

“They aren’t just not interested in this, they actively don’t like it. I had more than one person seriously concerned that if their tool were wired to the Internet, the government would use it to spy on them.”

This sales manager did note that they have had demo-based displays that were great — “People like playing with the toys,” but the toys and the people have to be a match.

“Terrifying the customers is always a bad sign, and in 12 years working in retail, I have run at least 10 promotions that have done that more successfully than they closed any sales.”

EMV Rage Is Real — But Dissipating … Slowly

Most of 2015 was spent building up to the EMV rollout. Experts speculated, merchants scrambled and then the clock ran out and … nothing really conclusive happened.

The world did not end, fraudsters en masse did not post a note explaining their intention to teach math to Belarusian school children and, on the whole, after a brief spark of interest after the Target breach, EMV has quietly slipped onto the scene as 2015 enters its closing days.

Many big name merchants are accepting it, but many are not. A majority of SMB retailers are sitting it out so far, noting their annual fraud costs over a decade do not equal what the upgrade would cost them. Restaurants, outside of very large chains, also seem manifestly unconvinced. And while the experts agree that slowly but surely and as costs come down EMV will be the wave of the future, it might be a while.

And possibly a bit more of a while, according to one long-term grocery clerk.

“We had the lights go out after Hurricane Irene, I think, and we were closed anywhere in the store that required refrigeration. That was the last time customers actively yelled at me about how much they didn’t like something.”

Which is not to say, she noted, all of her customers yelled at her. The vast majority had no reaction at all or commented that it was “neat or something.” She also noted that in 25 years working in grocery checkout, she has also been yelled at over discontinued gum.

“But the problem is that our system is slow, or maybe the chip cards are slow. And for some people — I think probably people who are shopping while they’re hungry — that 45 seconds is just enough time to convince themselves that their card is declined or something is wrong. And they don’t handle it well.”

“A lot of annoying things happen when you work in a grocery store, but this has just been an annoyance that won’t go away. So, I hope this really works to make some things safer, because honestly it has been tiring and a huge hassle.”

Truer words about EMV were never spoken.

Retail Staff Are The Most Literal Human Resources

But then retail staff having something true or useful to say should probably not come as much of a surprise, as one store manager at a chain that specializes in “satisfying the lucrative-but-extremely-demanding, upper-middle class, aspiring-toward-affluence millennial mom” shows.

Or, if that is too much of a mouthful: “We sell pretty stuff and smart stuff to moms with good taste.”

And this particular store manager is something of a unique feature in retail; she is a career-long player for the same national chain.

“I dropped out of high school when I was 16 because my mom didn’t make enough money to support us, and I had a part-time job that I was good at and school, which I wasn’t. Only doing more at one of those things was going to keep my family in my apartment.”

She went on to get a GED and progress through the ranks from her part-time job as a sales clerk, to a full-time job as a head cashier, to section manager, to assistant store manager to, as of a month ago, the store manager of one of her large national chain’s larger and affluent-facing stores.

“There are definitely ways that experienced and long-term retail staff make a difference,” she noted. She gave a few examples before concluding, “But what it all comes down to is some who walk into a store and deal with a clerk or a cashier or a manager who knows what they’re doing will walk out with more than they were intending to buy and feeling better about the purchase than they think they will. If there is a membership program, experienced staff will close a lot of signups new staff just won’t because they are still nervous about selling customers something.”

She also noted that while she thinks online retail could be a threat to physical retail, she really isn’t sure that people who are predicting the full-scale rollup of shops are being realistic.

“Consumers like having their purchasing decisions affirmed and applauded. Good salespeople do that very well.”

However, when asked a leading question about whether retail employees should be considered “skilled labor:”

“I started as a high school dropout, so I can say I came in basically unskilled. But I stayed, and I got really good at it, and I’ve helped a lot of other people do the same thing or move on to somewhere else. I hate doing that, but that is what happens a lot in retail because people move on really fast if they can’t advance.”

“But it isn’t about just raising pay; it is about making good people want to stay around long enough to be actually useful.”

“We do a lot of things to build consumer experiences and loyalty, but a lot of it, especially when people are in a store, is going to start and end with the staff. Do they know stuff, are they friendly, are they helpful and are they the right amount of around so they aren’t hovering and weird.”

And that, in a nutshell, is retail’s holiday wishlist, from the store floor.

For experiences that make sense, for EMV to fade somewhat more quietly into the background and for a greater appreciation of the sales associate in the conversion of the deal. They won’t fit as well into a song as partridges and pear trees, but they might just be a few ingredients to the retail reinvention secret sauce that will come in handy in 2016.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The May 2019 PSD2 Tracker Report, is a go-to, monthly resource for updates on trends and changes regarding PSD2 and other privacy and data protection regulations.

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