Actionable Insights From APT's Retail Practice

Cracking the Code: The Importance of the In-Store Experience

July 5th, 2017 | Posted by APT in Manufacturing | Retail

There is an undeniable appeal to shopping without ever leaving your home. As devices like Amazon’s Alexa further shorten the path to purchase, it is becoming increasingly easier for consumers to fulfill their shopping needs online.

The growing competition from online players places greater pressure on traditional retailers to capitalize on one key advantage: real estate. While a majority of online shoppers still prefer to make purchases in physical stores, it is vital for brick-and-mortar retailers to optimize the in-store experience as the process of browsing shifts more and more to online and mobile channels.

To make the most of their physical locations, retailers must proactively take steps to enhance the in-store experience. One innovative way they can do so is through working with their CPG partners to develop new strategies and refine existing ones. Through this collaboration, retailers and CPGs can launch initiatives ranging from sampling and in-store events to live consultations and demos designed to drive shoppers into the store and keep them there, with the ultimate goal of increasing sales.

However, while programs of this nature are designed to boost revenue, there can also be high associated costs. These investments can be significant, especially for labor-intensive programs such as in-store demos and consultations, which require training and staffing. So how can retailers and CPGs ensure they understand whether new programs will break even?

Taking a test vs. control approach is the most reliable way to measure the individual impact of a new program on the organization’s bottom line. By implementing a new program in some stores and not others, and comparing their performance against similar stores that did not receive the new program, executives can determine whether the program was successful, where and with whom it was most effective, and how to make it even better.

As noted, many experiential programs such as sampling and demos can be quite costly, due to the associated labor investment. Given that cost, CPGs and their retail partners must carefully consider and optimize every element of the program before investing in broader rollout. For example, consider a CPG that wanted to test a new in-store consultant initiative for its beauty brand. The CPG could work with the retailer to deploy consultants in a subset of stores, and compare the performance of those locations against very similar stores that did not receive a consultant to understand the true impact. They could further optimize the program by evaluating during which times of day or days of the week the initiative has the greatest impact, and in which locations within the store it is most successful.

Based on these insights, the CPG and retailer could then strategically roll out the consultant initiative across the network, based on where and when it would be most valuable. For instance, the program might work best during weekend mornings in rural locations, but work best during weekday evenings in urban stores. Going even further, they could also leverage this analytical methodology to refine advertising around the new consultant initiative.

As traditional retailers innovate in response to increasing online competition, collaborating with their CPG partners to differentiate the in-store experience will be critical. As they develop and roll out new programs, taking a test vs. control approach will help them spend smartly on the best iterations of the most successful programs.

To learn more about differentiating the in-store experience in an omnichannel age, check out this video featuring APT VP Matt Lindsay.



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