This week Macy’s announced that it will be bringing its new self-service shoe concept to three Chicago-area stores, allowing customers to bypass the sales associate during their
shopping session. This self-service concept is part of a broader test to ensure that Macy’s has in-demand brands and stocks the right shoes. So, collectively these initiatives have led to shoe sales increases that are “well above” that of regular stores. That’s awesome! High fives for Macy’s. However, Macy’s seems to be emphasizing the self-service aspects rather than having the right inventory in the store. In fact, in a March conference with investors, CFO Karen Hoguet stated that lots of customers say, “Leave me alone, let me just...get the shoe I want and move on”.
So, what are the drivers that are causing the lift in shoe sales? In the case of Macy’s and improving shoe sales the drivers appear to be:
- Customers can try on more shoes - Since the shoes are on the floor rather than a back room, the customer can try on more shoes in the same amount of time. Getting product to the customer quickly is not a full service / self-service decision.
- The right product is in stock - By focusing on having the right stock of in-demand brands and sizes, Macy’s will drive sales. Here's an online product review submitted by a consumer about a pair of shoes a colleague just happened across while shopping that illustrates my point exactly: "Nice shoe and am trying one more size...I wish I could just go to a store and try these on. This is why department stores are going out of business. They're making me shop online." Picking the right product to sell and carry in stores is a vital function of the buying and planning teams. It’s not being driven by the store moving to a self-service model.
Self Service Can Be A Death Spiral
It’s much easier for retailers to make their model a self-service model because it means they don’t have to reinvent store processes to meet the growing expectations of customers. They don’t have to train associates. They don’t have to ask qualifying questions to customers. It’s easy to stack the boxes high, watch sales lift, and then derive that the associate had no value in the shopping experience. This is how the ‘death spiral’ starts. Retailers reduce a level of service, gain a temporary benefit either in higher sales or lower costs, but over the long term diminish the brand and future sales. When you remove the associate from the in-store experience, retailers:
- Diminish the role of their store - Retail stores cannot just be about stocking product. In a world where any product can be purchased from anywhere, with a few taps on your smartphone, simply having inventory position as a brand strength is not enough to keep the store relevant. This move by Macy’s to make shoes self-service will diminish the role of the store in the eyes of their customers.
- Weaken the role of the associate - Moving to self-service will weaken the role of the associate, relegating them (in the eyes of the customer) as simple stock keepers. With retail stores on the ropes, brick and mortar retailers must leverage their differentiators and strengths. The associate is a differentiator. It is a strength of the store format. Winning retailers understand this and are empowering their associates to be brand and service ambassadors.
- Reinforces the online channel - Why should customers go into the store when they can simply purchase online? After all, a store with boxes piled high doesn’t offer any unique value except for immediacy. Models from data scientists have shown that when investment in the store is reduced (and when the store closes), the lift in online sales is just temporary. A key source of acquisition dries up…the store.
- Reduce revenue - Customers that are assisted buy twice as much as those who are not assisted by associates.
To Survive You Must Reimagine How Your Store Operates
What should retailers do? Assuming the right products are in your stores, retailers should:
- Increase speed of service - Employ runners with technology like Theatro's voice platform that allows associates to communicate to have shoes pulled exponentially faster.
- Provide upsell and cross sell opportunities to the associate - Why are we not thinking of the associate when it comes to personalization? I’ve written about this back in 2015 while serving as Principal Analyst at Forrester. By the way, Theatro offers personalization for associates, covertly, via our voice platform.
- Test & optimize, just like eCommerce - Macy’s discarded their focus on service in the shoe department because the impact of the associate is not likely known. With Theatro’s voice platform, retailers like Macy’s can A/B test new engagement techniques for associates and continuously optimize. This is harder than turning to self-service, but it creates an upward growth spiral and emphasizes this differentiated aspect of the store.
- Enable the associate to be “on demand" - Customers who prefer self-service do so up to a point. That point is when they need help. And when they need help, they expect that help to be immediate and contextual. For instance, don’t require the associate to re-qualify the customer. Create mechanisms that allow the customer to identify when they need help, provide the associate tools to better understand what customers want, and train associates (in ear via Theatro’s voice platform) to spot when a customer is in need in order to provide this on-demand service.
I’d love to hear your thoughts on this topic. Please feel free to email me at firstname.lastname@example.org with your ideas and comments.
Adam Silverman, SVP Marketing