What can local retailers learn from overseas entrants?
International retailers bring with them knowledge and processes gained by doing the hard yards in larger markets. With a deeper desire and understanding of the customer experience they are able to measure, understand why and improve:
- Staffing effectiveness
- Product relevance
- Promotion pull
- Layout engagement
After all, the advantage that brick and mortar stores have over online is the physical experience. From store design, through to product touch and feel and staff liaison.
As most of us like to get out and about, understanding how customers engage within your physical environments empowers businesses to apply a ‘test, fail and evolve quickly’ mentality to almost everything including operations and marketing.
With Amazon currently setting up local distribution, more than ever differentiation is vital – and experience holds the key.
TK Maxx recently entered the Australian market by taking over and re-branding 35 Trade Secret stores.
From 0 to 35 is a big leap and you would expect constant measuring and adjusting as this business finds its feet locally.
My wife has purchased from our local TK Maxx store a number of times, so I figure they must be doing something right?
Having visited a client a few doors down, I decided to take a peek and see what all the hype was about.
First thing I noticed was the dual lens door counter – ok so now I was even more curious.
Walking through, the store was a good size and had traditional aisles surrounding heaps of racks, shelves and product with a good mix of staff.
This is when I realised how important understanding customer behaviour was to TK Maxx. The floor was scattered with fisheye cameras, Wi-Fi and other sensors.
..and rightfully so, with 37 stores you want to know;
- What sections people are going to
- How long they spend in sections
- How sections visited correlates to product categories purchased
- Visits throughout the day, week and month per store and across the whole network
- How marketing impacts visit flow by store
It’s clear these guys are extremely serious about understanding its customers. The great thing here is that the evolution of Internet of Things (IOT) has put this kind of tech and insights within the reach of all business.
So with this kind of intel what can TK Maxx stores do?
- Make more accurate and faster decisions
- Test new product and category pricing – engagement vs sales
- Adjust store layouts for improved flow, stick ability and up-sell
- Understand what marketing initiatives work with related benefits – visits, sales
- Drive bigger gains
- Fail and adjust quickly
With strong growth in the Australian market and 6 per cent increase in sales in its second quarter, it appears TK Maxx is off to a great start.
With customer loyalty being key, I am looking forward to seeing how TK Maxx tackles;
- Accurately identifying unique visits
- Identifying new vs repeat customers
- Queue management
- Digital engagement
While we can learn and evolve quickly by studying these global giants, without the same insights you’re competing against yourself.
The good news is that these insights are within reach and can drive game changing decisions for business.
When is an increase in sales a bad thing? When you realise specific marketing and promotions were driving spikes in traffic during hours that your staff couldn’t handle – resulting in lost sales and customers.
Being able to measure instore visits, return visits and visit duration against sales enables retailers to expose true performance.
Paul Sideridis is the founder of Onsite Insights and can be contacted on 1300 664 550 or at [email protected]