Faced with declining sales revenues, retailers such as Best Buy are making a bet on home monitoring and energy management solutions. This move may help them to reinvigorate their businesses, while providing a model for how retailers can effectively blend the better elements of the online and offline shopping experience.
Over the last decade or so, traditional retailers have seen consumers flock in droves to online outlets. Often, when shoppers do visit a store, it’s only to preview an item they intend to purchase later online. Among one of the hardest hit industries is consumer electronics, which is in the top three highest grossing categories for online sales.
The answer to retailers’ problems, say experts, is to reinvent shopping in a physical store. That is, to get people back into stores means they must deliver exceptional service around great products above and beyond what they can get online.
According to Ron Johnson, the former Apple executive who engineered the company’s retail operations, the key lies in truly improving people’s lives through customer service and a counterintuitive sales approach that isn’t focused on making money in the short term.
Borrowing useful elements from online retail such as customer recommendations, ease of product research, and comparison shopping, Best Buy hopes to educate in-store consumers in what it believes is the way of the future. Through a series of partnerships, the US based electronics giant will conduct surveys to learn about household energy use, provide product recommendations, and illustrate the difference those products can make.
Studies indicate that while most people find products in this category both intriguing and worthwhile, they aren’t all that knowledgeable about them in the first place. And where the proper functioning of a product depends highly on integration or installation, old-fashioned face-to-face interaction lends credibility to the transaction from the consumer perspective. Thus, a retailer like Best Buy with its extensive reach and sales staff could help to broaden support for home monitoring and energy management by converting curiosity to revenue through a flawless customer service experience.
While it’s easy to take a skeptical view and say that consumers will simply seek the product out at the lowest cost online or elsewhere, this certainly isn’t always the case. Again, take the Apple store for instance. The products are well-known, a wealth of information is available online, and often the prices aren’t competitive. Yet people continue to shop at the company-branded stores for the experience, Johnson says.
Improving the brick-and-mortar shopping experience will also allow retailers to strengthen an implicit advantage, the ability for shoppers to actually see and touch products – shoppers are far more likely to feel positive about and will pay more for a product they have touched. This strategy could prove far better than shifting all operations online. If retailers go that route, they’ll be forced to compete with the mammoth sellers who specialize in that space (some of which are already invested in home networking and energy management space).