Shopping Experience Plus Brand Consistency Equal Success

Q: What is Shopology’s perception regarding the performance of the retail market in Mexico?

A: Retail has been very kind for companies. Despite the country’s modest economic growth over the past several years, the retail arena has demonstrated continued strength. However, the industry in general is moving slowly in terms of adapting to the transformation the world is experiencing. Several well-positioned brands achieved their recognition in a moment when there was a lower level of competition or when customers had less access to information. Today, they continue to enjoy the fruits of that positioning. We have noticed that in these cases, companies can become somewhat apathetic when it comes to the integration of an omnichannel strategy. The fact that they continue to enjoy positive results has prevented many companies from developing a stronger positioning strategy focused on their customers.

Retail strategies based on the product are no longer successful. In the past, a company could have success simply by being the first or the only company to sell a specific product. Since access to this product was limited, the first companies that presented the product in the market became leaders and achieved the recognition that they still enjoy, despite the fact that today several other retailers provide the same product.

In fact, the value and quality of the product are now a secondary factor for customers. Today consumers visit stores with which they have an emotional connection rather than stores that provide the best product. It is common to find companies that have the best product at the best price but that are not the most successful. The most successful brands are those that transmit an emotion to their customer, they deliver the feeling their client wants to experience and provide a sense of journey that helps to build that emotion.

Q: What should retailers consider when designing their customers’ shopping experience?

A: We define the shopping experience as the group of interactions that exist between a brand and a customer and through which the brand transmits an emotion. Unlike what many people believe, the shopping experience is not what happens in the store. It is about all the possible existing interactions at all points of contact, whether that is online, external publicity, online publicity, recommendations and so on.

We have found that the shopping experience has 10 elements, including things like the physical space, location, the language salespeople use when they interact with customers or the clothing they wear. All these elements help the customer experience the emotion they are looking for.

Human beings make decisions based on emotions and their purchasing habits are also driven by emotions. This means that the successful retailers are those that have clearly defined their own identity and how this identity will transmit emotions to their customers.

Q: In which elements do companies need to work the most when communicating with their clients and generating this new shopping experience?

A: Where we are seeing the most resistance is in the definition of the purpose and identity of the brand. Retailers that still think that their ultimate goal is to earn money act accordingly, and this identity becomes what salespeople and collaborators absorb. The problem arises when collaborators themselves perceive a lack of purpose from the company. This disconnect is then transmitted to the customer, creating a negative emotion. The lack of purpose also generates high personnel turnover. Whatever the archetype the brand chooses will guide all subsequent decisions for the brand.

In 2000, consumers need to be exposed to a brand four times, on average, before considering it an option. However, today consumers need to be exposed to the brand at least 16 times before considering it an option. In a world where the noise in the market and the number of interactions has grown, customers have learned to discern when brands are not consistent with what they preach and what they offer. A defined brand identity maintains consistency between all the elements of the experience.

Q: How do you expect the COVID-19 health emergency to boost the overall use of e-commerce?

A: The situation will definitely boost the participation of e-commerce in the total sales of retailers. There are people who had to learn how to shop using these tools because they had no other option. However, this situation will not on its own further the use of omnichannel platforms. It does not depend only on consumers but also on companies. We need to see how Mexican companies react, especially considering that an economic contraction is expected and that implementing a successful omnichannel strategy requires a significant investment. This is the vital moment for companies to realize that the shopping experience will become their most important differentiator.

Q: How can Mexican retailers avoid the experience of retailers in the US and Europe as e-commerce platforms strengthened?

A: In the US, there was an over concentration of shopping malls. The amount of commercial square meters per capita in the US was extremely high, which partly explains why many retailers disappeared. However, even in places like the US, e-commerce represents barely 10 percent of total sales. We cannot say that e-commerce generated the disappearance of retailers.

Retail is facing a transformation. The industry, even in Mexico, is moving toward this transformation. Certain factors will affect the speed at which Mexico and Latin America experience this transformation, such as financial inclusion or the concentration levels of people in cities.

When you analyze the retailers that went under in the US, they all share something in common, which is that all of them became product warehouses. For example, in the US, Sears was a product warehouse where the experience was not adapted to the client’s expectation. The same happened with Kmart and Toys “R” Us. These retailers disappeared because they failed to adapt to their clients’ expectation and not because e-commerce outgrew them.

Shopology is a consultancy focused on retail and client service that helps retailers define the strategy related to the shopping experience