The retail sector has experienced a significant transformation in the last 10 years with new technologies, changed employee expectations, and an increasingly informed consumer market contributing to its evolution. And the Covid-19 pandemic helped hasten retail’s inevitable widespread embrace of online shopping.
Naturally, change brings opportunity—as well as challenges. Retailers must adapt to new trends and changing demographics or risk falling behind.
Keep reading to find out the most pressing challenges facing retailers and their frontline workforce in 2023.
1. Delivering on customer experience
The customer experience plays a pivotal role in deciding the success of your retail business. It’s often the brands that deliver an excellent experience that thrive in the competitive retail market. And the sector is evidently aware of the importance of customer experience, with 45.9% of retail businesses selecting it as their top priority in the next 5 years.
But the customer experience can’t remain the same; it must change alongside the customer. The last few years have seen a seismic shift in what customers expect from retailers. And this trend continues in 2023, with customer demands now incorporating aspects including a desire for a more conscientious brand—31.5% of UK consumers want to see retailers take a stand on racism—and increasing demand for consumer feedback.
Retailers should therefore take interest in these changing trends and adjust their customer experience to meet demands. Doing so will have several benefits, including improving brand consistency. With a consistent brand that reflects your customers' values across all touchpoints, consumers will view you as more trustworthy and authentic. Both of which are hugely important—86% of consumers say authenticity is a key factor when deciding what brands to support, whilst 81% reported needing to trust a brand before buying from them.
It also makes sense that focusing on customer demands will improve customer loyalty. If your consumers value product quality, excellent customer service, and environmentally sustainable business practices, then an experience that incorporates all of these will undoubtedly improve your chances of retaining customers.
2. Optimizing omnichannel, across every surface
2023 will see a continued increase in retailers adopting the omni-channel approach.
The omni-channel strategy, which integrates all existing channels for customer interaction and has them work together, creates a seamless customer experience. It’s an incredibly successful approach, with businesses that adopt omnichannel strategies experiencing a 91% higher year-over-year customer retention rate.
However, to successfully utilize omni-channel, retailers must optimize every customer touchpoint and ensure that consistency is guaranteed in relation to the brand and the customer experience—including their in-store experience.
Whilst online retail has grown exponentially these last few years, brick and mortar retail is still going strong, and consumers spend, on average, 11% more when shopping in-store. Retailers can’t afford to overlook this touchpoint within the wider omni-channel strategy. Guaranteeing a consistent customer experience in-store is contingent on all store employees possessing equal levels of knowledge and customer service skills.
This type of standardized experience can be achieved through effective training that ensures brand consistency and a customer experience that is equal across all available channels. Those with weak and inconsistent omni-channel strategies experience a 33% lower retention rate and a lower increase in annual revenue.
3. Lack of ongoing training
Do you invest in ongoing Learning & Development? What does it look like? Studies find that 59% of retail employees received no training whatsoever, and a further 37% of retail employees were trained just once a year. However, retail’s training challenges extend beyond the initial onboarding phase.
Limited continuous learning
Much of the sector fails to embrace the need for continuous learning. There are very few industries that change as often as retail. Stores are always introducing new products and offers, employing various strategies to entice their customers. But current training approaches fail to acknowledge this evolution, and there’s an apparent lack of continuous training for retail employees, leaving them ill-equipped to deal with the consumers.
This results in a negative customer experience, as your consumers don’t feel confident shopping in a place where the staff isn’t a reliable source of information. Current customer attitudes confirm this—83% of shoppers believe they know more than store associates. And it also results in an unhappy workforce, leading to higher churn rates. Data suggests that companies who do invest in continuous training see a 53% lower attrition rate.
No standardization of training
Consistency should be valued by retailers because it’s valued by the customers. Consumers feel secure in knowing that the type of service they receive from a retailer will be the same regardless of where they experience it. This is one reason why retailers like Apple are so successful—their customer service is practically identical from store to store, and each employee receives identical role-relevant training.
But this consistency is only achieved through standardized training, something not all retail has figured out. There remain many retailers with inconsistent onboarding programs that vary in length and detail from person to person. And to make matters worse, training often differs from branch to branch, meaning customers experience an inconsistent experience when interacting with your brand, leading to fewer sales and an ineffective omni-channel strategy.
4. Reliance on legacy technology
When used effectively, technology can be a blessing. It can supplement employee productivity by saving time and effort, improve the speed of customer service, and reduce human error. It’s also a potential money-saver with the ability to automate certain company areas.
But technology can be a curse for retailers who continue to rely on dated systems that become a daily source of frustration by interrupting workflow and failing to serve the purpose they were intended to.
In fact, 44% of UK retail staff workers say that outdated technology is their biggest frustration with the industry. Company intranets, email, and Learning Management Systems are all examples of outdated technological practices that are still widely used despite the fact they operate in isolation and cannot be connected with other technologies, such as HR and shift scheduling tools like BambooHR and Quinyx.
The downsides of using dated technology
- Adversely impacts employee morale and engagement- Failing to invest in company technology sends a message to your employees that they themselves are not worth investing in. If your outdated systems are a hindrance to your employee's productivity and performance, then your workforce will lack motivation whilst feeling disengaged. One study revealed that 10% of retail employees consider leaving their role due to outdated tech.
- Limits your ability to track data and respond to changes-relying on a collection of disconnected systems that fail to talk to each other makes it increasingly difficult, sometimes impossible, to track data and respond to organizational and consumer change.
These downsides inevitably lead to retailers falling behind in an increasingly competitive market. The modern-day customer expects a flawless experience when interacting with technology. If your technological user experience fails to meet these expectations, you risk losing customers and developing a negative reputation.
5. Optimizing internal communication
In retail, it can feel like every store for itself. But the most successful retailers are those who have mastered internal communication, both on a store-to-store basis, and at scale.
And those who haven't often experience varying degrees of communication and information, to varying standards, or in some cases, people missing out on information entirely.
For example, when launching a new product, it’s vital each employee knows what it is and how to sell it. But if this information isn’t readily available, and, can only be accessed via an intranet message that people don’t often check or don’t know how, this will inevitably lead to an uninformed workforce performing to different standards, leading to unpredictable customer experiences.
Internal communication issues go hand-in-hand with reliance on legacy technology. Retailers need to upgrade their tech and begin building an ecosystem of software that speak to each other intelligently so that retail operations teams get a centralized insight into communications, compliance certifications, training progress, and shift scheduling.
eduMe is a mobile-based training platform that equips your workforce with the information they need to succeed and seamlessly plugs into the onboarding & applicant tracking, communication, and HR & performance management tools you already use. Companies that have switched to eduMe to administer employee onboarding and ongoing training have seen results like a 66% increase in sales within the first 3 months.
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