Customer Loyalty - Brick and Mortar Stores: United States

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Customer Loyalty - Brick and Mortar Stores

Brick-and-mortar specialty retailers capitalize on face-to-face interactions, a quality product and engaging shopping experience, as well as personalized staff training and expertise to drive customer loyalty and trips to physical stores. A publicly available list of the most popular specialty retailers in the US provided a starting point for selecting the examples found below. Each of the specialty stores listed is among the best in its class with a particular focus on establishing customer loyalty. These stores are not considered mass merchandise or club stores.

OVERVIEW

  • Online shopping offers more convenience for consumers, so brick-and-mortar stores need to counter this with enhanced and personalized customer satisfaction that an online experience simply cannot provide.
  • One key advantage that brick-and-mortar retailers offer is human, face-to-face interaction with store associates that many customers believe lowers risk when making purchases. 60% of consumers report a better shopping experience in-store than online, and 62% of shoppers attribute this to the friendliness, helpfulness, and knowledge of store associates.
  • The ability to address a negative experience or issue with the company's product in person is an additional strength for brick-and-mortar stores. Online competitors often face losing customers and having them switch to another brand in these situations.
  • Providing interactive and engaging in-store experiences can also encourage the public to visit brick-and-mortar locations since "79% [of consumers] believe that physical stores are where brands really come to life."

ACE HARDWARE

  • Ace Hardware is a perfect example of a specialty retailer that fosters a sense of helpfulness and community to drive customer loyalty.
  • 68% of consumers consider Ace Hardware the best brick-and-mortar retailer for home improvement.
  • Company financials for 2018 report a 2.2% increase in same-store sales.
  • According to RetailWire, "Ace has ranked at the top for customer satisfaction for 12 of the past 13 years."
  • To compete with online retailers like Amazon, Ace Hardware focuses on customer service and staff training to maintain consumer loyalty.
  • Its philosophy emphasizes care for and investment in the neighborhood, as well as making sure staff has a "personalized knowledge and expertise that cannot be replicated in an online-only environment."
  • Ace Hardware also offers a customer loyalty program where members can buy products online and have them delivered from their local brick-and-mortar location by the next business day.

THE LEGO STORE

  • The LEGO Store is an industry leader when it comes to developing engaging "in-store activities" for consumers.
  • It delivers "one-of-a-kind in-store experiences, from personalized LEGO mosaic portraits to monthly build events, to pick and build walls."
  • Visiting a LEGO Store is a lot like spending the day at the playground. Stores encourage both children and adults to enjoy themselves through personalized experiences. For instance, visitors can print their own mini LEGO figurines designed to look just like them.
  • For LEGO, visits to brick-and-mortar stores are part of the product. Its in-store customer engagement is top-notch, and this is an important trend for competitors to follow considering that for up-and-coming consumers like Millennials, “72%... would rather spend money on experiences than on tangible goods and products.”
  • The LEGO Store launched a survey at the beginning of this year to find out how adults feel about the LEGO in-store experience, an illustration of how the brand seeks to include consumers of all ages.

BEST BUY

  • Best Buy is an example of a store that creates an interactive customer experience using technology to drive consumers to visit physical locations.
  • Its 2019 Q2 financials report a 1.1% increase in same-store sales.
  • Best Buy uses "in-store boutiques" and specialized training for staff to encourage consumers to visit stores.
  • Best Buy started using its mobile app to blend online and in-store shopping experiences for customers in 2017 with the Reward Zone program. Bonus reward points were available to consumers for checking in at brick-and-mortar locations.
  • Its "On My Way" app is a current feature customers can use to alert associates that they are en route to a brick-and-mortar store.

CONCLUSION

  • Retailers like Ace Hardware, The LEGO Store, and Best Buy make positive face-to-face interactions with consumers a priority to drive customer loyalty. They make sure staff is friendly, knowledgeable, and properly trained.
  • The LEGO Store and Best Buy put a particular emphasis on creating engaging in-store experiences through interactive displays and activities.
  • Rather than fight technology and the online experience, Best Buy incorporates it into the in-store shopping experience through its mobile app.



Sources
Sources

Quotes
  • "'Nearly 60 percent of consumers said that they’re more satisfied with customer service in-store than online, which speaks to the value of the in-person experience,' said Tom McGee, president and CEO of ICSC."
  • "Friendly and/or knowledgeable employees ranked as the most important (62%) aspects of in-store customer service, followed by the ability to easily find items (59%) and speed and ease of checkout (59%)."
Quotes
  • "In home improvement, Ace Hardware took first place, with 68% of the consumer vote."
  • "As seen by the results of both the furnishings and home improvement categories, customer service still holds a lot of weight in the consumer decision-making process."
Quotes
  • "Ace has ranked at the top for customer satisfaction for 12 of the past 13 years."
  • "'Online retailers do introduce new competition, but when traditional retailers get their online/offline formula right, they are able to really differentiate by offering a level of personalized knowledge and expertise that cannot be replicated in an online-only environment.'"
Quotes
  • "The 2.2 percent increase in retail same-store-sales during the first quarter of 2018 reported by the approximately 3,000 Ace retailers who share daily retail sales data was the result of a 3.3 percent increase in average ticket, partially offset by 1.1 percent decrease in same-store transactions."
Quotes
  • "79% [of consumers] believe that physical stores are where brands really come to life, citing the in-store experience as the primary influencer of the overall customer experience."
Quotes
  • "According to a study done by JWT Worldwide, '72% of Millennials would rather spend money on experiences than on tangible goods and products.' Millennials desire (and search for) an emotional added value from brands."
Quotes
  • "A feature called "On My Way" enables customers to alert a store that they are going to soon arrive to pick up an item, giving employees time to bring the item to the front of the store for pickup. The store also sends the customer an email with unpacking and installation instructions."
Quotes
  • "The company’s overall same-store sales rose 1.1% in the quarter. Analysts on average had expected a 0.9% increase, according to IBES data from Refinitiv."