There have been three separate events this week that triggered this article:
- An interview with Gerry Harvey in The Age explaining why online retail can’t be successful (in his mind)
- A message in the facebook group “Back2ITSM” from Charles Betz asking about the connection between IT and the business
- My shopping experience today at a sports store in Brisbane city
What do these three events have in common?
Off-line retail is in a lot of trouble at the moment and it is quite obvious when you look around you. Shops are almost empty and when they do attract clients, they do it through groupon deals or other in-store sales offers. This can’t last very long and I worry for many store owners. With their high expenses in store rental and employment, they need to make good margins on their products and the constant discounting doesn’t help.
And yes, technically I own online stores and provide ecommerce solutions to our clients so perhaps I am the reason why some physical product and service providers are having a tough time at the moment… but that’s not what I want to say.
That’s why the facebook message is important. Charles asked if people know of examples where the business side has learned from IT (and more importantly IT Service Management). This is an important question! Many business managers think about IT as a ‘necessary evil’ or the big black hole where you pour your budget dollars in – never to be seen again. But you know what? In the background the IT professionals actually do a lot of amazing work! (I know – I shouldn’t sound so surprised.. right?!)
IT departments and IT professionals have to fight for their existence every day of the year. They must show value and justify their costs or they will be cut from the company. With cloud computing and subscription based ‘pay as you go’ offerings, many business owner and business manager is questioning the reason to have an internal IT department. And this is not a new phenomenon.. this started with outsourcing years ago.
So in the background IT is working very hard to make sure they know exactly what it is that their clients want (through Service Portfolio Management and Demand Management) and to produce a catalog of products and services that they can guarantee to deliver as per the described service levels so that the clients can choose which service offering suits them best.
IT departments and IT Professionals also have been very flexible when it comes to offering higher levels of service for less money. Automation and efficiencies have been the daily mantra of IT departments since the 1980’s. They have to create a unique experience that can’t be offered by anybody or anything else, because if somebody else can do it.. they will, and probably cheaper. The only way IT departments can thrive is by offering true value to the customers; have the functionality the client needs and understand their specific needs in relation to availability, security, continuity etc.
What can retail stores learn from this?
When you don’t offer value and don’t offer that unique experience, people will only shop on price. And what better way to price-shop than on the internet? Most people have a smart phone that is connected to the internet, making it super easy to check pricing online while you’re in the store.
Give your clients a reason to come to your store! Offer an amazing experience through the product and service features as well as availability, security, capacity etc.
Let me tell you about my experience today… and let this be a warning to every retail store owner:
We went to a sports store in Brisbane city, looking for something really specific: sparring protection gear for Tae Kwon Do. This was our first time in the store as usually we go to the Chermside shopping centre where the store is next to the cinema. The layout of the city store was such, that at the back there was a lot of protection gear but this was all for hockey and soccer. So we walk up to a shop “assistant” who was chatting to his female colleague (and I put the word assistant in inverted commas because he did anything BUT assist). We ask for the product we need and he doesn’t even move… doesn’t skip a beat.. doesn’t even give the impression that he wants to help. He said: “when you go back to the store entry, try to find a guy named Lee and he might know more about that stuff”
Err… really?!?! You are being paid to offer customer service and you’re clearly more interested in chatting to your colleague than actually assisting clients….
So rather than finding this guy named Lee, we get our phones and find our trusted online store and type in the exact product we need and place the order there and then. (one click buy) Had a disappointed son as he really wanted the gear this week, but what do you do?! It now takes a bit longer to arrive at our house, but at least we get exactly what we want. Oh and guess what… we also bought that foam roller that I wanted for my stretching and pilates exercises as it was half the price online than the same product in the retail store.
This retail store lost 2 sales today… total sales value probably only $200 (but that’s besides the point)… and the ONLY reason we didn’t buy in the store was because the shop assistant didn’t have the training or awareness or inclination to actually deliver a service to the client. All this guy had to do was walk with us to the front of the store to introduce us to the guy named Lee and explain the situation. Thirty seconds away from his female co-worker to actually do some real work and interacting with clients is all it would have taken to have $200 extra in the cash register by the end of the day.
Now his job is going to be outsourced to online stores and automation…. And who is he blaming? My guess he will blame the economy, or e-commerce or customers with smart phones.. but not himself.
Not all retail is doom and gloom… final experience of today sets an example of how positive retail experiences can be… Kikki-K is a stationary store in Australia that gives that true customer experience. Upselling where they can and helping you find the exact product you want. You spend $60 on a couple of pens, but you feel amazing! (btw – they also have an online store that complements the store experience… so I guess I can co-exist, contrary to what Mr. Harvey claims).
And we all know the Apple store… it’s not about the price… it’s often not even about the product… it’s all about the experience! Let it be a positive one for all parties involved. (and this is where IT can still improve a lot as well)