To Big To Fail?
Updated: Sep 21, 2018
The stakes are higher than ever before for brands to increase their net/net sales. The obvious is that customers have options and this translates mainly to online shopping. If the service falls short in brick and mortar, it drives more customers to online.
You rarely hear anyone complaining about their online shopping experience. It's hard to complain when you are in your pajamas shopping from the comfort of your bed.
I had another lovely online shopping experience with a beauty brand's website today. I had a 'live' chat salesperson who answered all of my questions with greater detail of knowledge than I have been finding in stores. He/She even offered sampling to try, ability to return or exchange and I never left my desk, sans pajamas. No hassles, no fuss.
Additionally brands continue to support and reward online customers with more compelling samples and incentives. Which by the way, infuriates the salespeople in the stores and in the field that are tasked with making their daily sales goals, while competing with their own employer, as they offer more incentives to online consumers.
Don't get me wrong! I want the brick and mortar environment to succeed, I just think we need to make a few adjustments. Here are a couple of thoughts:
1) Fewer points of distribution - I know that is not what the retailer-partners want to hear. Brands need to stand their ground on this being a 'win-win' for both parties. We already experience this with Sephora and Ulta. Not all of the same brands are carried in all of the same stores.
2) Brand owned staffing in retail-partner stores - this is becoming more popular, however the retailers don't like it as much because they then loose the ability to schedule Suzy from Beauty X 5 pm - 10 pm to service customers for ten other brands in the department at the cost of Beauty X's percentage of her hourly rate charged back to Beauty X. Of course, a brand can't do this with too many points of distribution because of profitability. It does however give the brand control of their messaging and customer service offerings.
Fewer Points of Distribution + Brand Sales People In Store - gives the employees a path of growth with the brand's company and can elevate the in-store customer service experience along with engagement. Retail jobs are not as highly sought after because these have become jobs without career paths. As big brands continue to reduce the field sales positions and freelance support, it reduces the path that many want to take from 'behind' the counter to 'into' the field.
Brands also have an opportunity to create current jobs that are compelling and fulfilling in order to attract talent. Career growth has been stagnant for several years due to downsizing 'the field' and simultaneously staffing turnover has continued to increase. This has deteriorated customer service in brick and mortar.
The new, smaller brands have a better chance of surviving the evolution of retail because they are still in their growth years.
It's the medium to big brands that will need to figure out their future strategy to compete in a 'new normal'. Online sales are not enough to offset in-store sales (without newness) with the combined diminishment of talent, because of the lack of opportunities for people to have a career path, are our two biggest challenges.