Retailers need to find new ways to continuously attract and retain customers.
It is no surprise that the retail industry is under a lot of pressure nowadays. Between competition from e-commerce, emergent technologies and changing customer expectations, retailers need to find new ways to continuously attract and retain customers. And although highly trained employees can provide a competitive advantage to an organization, retailers don’t often invest in modern learning for their employees.
Retail Consumer Trends
Rise of E-commerce
The most important retail customer trend is the rise of e-commerce according to Internet Retailer. The total U.S. retail sales in 2018 amounted to approximately $4.1 trillion. Of those sales, 14.3% were attributed to the e-commerce industry, which includes only retailers that do not have physical retail stores. E-commerce also saw higher growth in retail sales at 15% over the previous year vs. 3% for traditional retail. Amazon, the e-commerce giant, accounted for 40% of total U.S. online retail sales. This poses a significant threat to traditional retailers, which constantly struggle to compete not only in store but also online.
Impact of Social Media
Social media has had a significant impact on consumer preferences and expectations over the past decade. According to a study by PwC, 47% of respondents turned to social networks and visual social networks as their main source of purchase inspiration. Specifically, Facebook and Twitter took the top spots, followed by visual networks like Instagram, Snapchat and Pinterest. Traditional retailers can benefit from these trends by ensuring Instagram-worthy experiences in their stores.
Decline in Consumer Confidence
The Conference Board, in collaboration with Nielsen, releases a monthly Consumer Confidence Index that measures consumer sentiment and purchase intentions based on current business economic conditions. In March 2019, the index dropped to 124.1 from 131.4 the previous month, and the percentage of consumers believing that business conditions were “good” decreased by 7.2%, while those believing conditions were “bad” increased by 2.5%. Consumers are also not optimistic about near-future outcomes, as the percentage expecting business conditions to improve over the next six months declined from 19.6% to 17.7%. This has an impact on overall retail sales as consumers are less likely to be willing to spend money during times of economic and business turmoil.
Increase in Customer Expectations
Customer expectations have increased dramatically, requiring retailers to rethink buyer interactions. It’s no secret that brands like Starbucks have led the way in personalized customer service at scale. Whether it’s about buying a coffee, purchasing a new laptop or upgrading a vehicle, retailers need to listen to customer requests and be prepared to deliver on those needs. On the flip side, organizations like Amazon are increasing customer product knowledge and raising everyone’s expectations around speed and cost of product delivery. According to PwC, 47% of respondents look to Amazon to educate them on product features, while 39% use it a pricing tool to understand cost vs. value of a new product. Between the Starbucks and the Amazon effects, the retail industry is struggling to develop and deliver better products at a lower cost and personalized at scale.
The good news is that training can support all the trends impacting retailers today!
In a study conducted in January 2019 in collaboration with Training Industry, D2L wanted to learn how sales training, and specifically the onboarding of new salespeople, can help traditional retailers achieve business goals.
Here are some of the takeaways from that study, based on responses from over 250 people across 8 different subsegments of retail:
- Organizations with effective onboarding programs were 20% more likely to have 75%+ of their salespeople reaching quota than companies with ineffective programs. This can help offset some of the issues caused by the rise of e-commerce and the decline in consumer confidence.
- 47% of organizations with effective onboarding and 45% of those with overall effective sales training were also reported to deliver a very high-quality customer experience. The same effect was seen when the reverse was true — organizations providing a low-quality customer experience also didn’t have effective training programs in place. This showcases the importance of training as a highly effective tool for retailers looking to align with changing customer expectations.
- Companies with effective onboarding and sales training programs are more likely to focus not only on compliance and product knowledge, but also on company culture and soft skills. Materials are also delivered via individual and video modules that increase engagement. Developing and delivering effective programs can help offset some of the social media impact, preparing salespeople with the right knowledge and skills to support customers’ purchase inspiration.
Ultimately, frontline staff are the heart and face of the retail industry, and it’s important for leaders to equip them with the skills, knowledge and behaviors that provide the organization with a competitive advantage in today’s volatile environment.