The US customers are highly impatient. Many US retailers are losing their sales (and profits) because of longer customer wait time. For many retailers in the US – ranging from premier department stores to hardware stores to fast-food chains – reducing customer wait time is the utmost priority. A study on the tolerance levels of US web users revealed that one in every four people abandon a website, if its pages don’t load in less than four seconds. Four in 10 Americans quit accessing a shopping site on a mobile, if the page doesn’t load in three seconds. A significant majority of Americans would also not wait in a queue for more than 15 minutes, while 50% wouldn’t go back to an organization that kept them waiting for something. So, the key to success in a retail world would be to swiftly serve the customers the very first time to ensure that they come back to you again.
Many retail companies feel that enhancing the shopping experience of customers is the best way to build loyalty towards the company, even as they compete with online rivals that offer the convenience of shopping from home and increase competition among other ‘brick-and-mortar’ retail outlets.
In the present scenario, retailers need to have the ability to balance a number of different critical components to create ‘perceived value’, the USP of retail, which attracts loyal customers and spurs them to spend. Success depends on the appropriate selection of the mix of product, service and pricing. But in a multi-channel world, ‘brick-and-mortar’ stores are finding it more challenging to compete with the unlimited product mix and price discounts offered online.
‘Customer service’ is still one of the most crucial differentiators, which continues to offer a tremendous opportunity to all retailers. Checkout time drastically impacts customer’s perception of service.
In brick-and-mortar retail companies, checkout time has a significant impact on customer opinions about service. If the checkout queue is too long, customers will not be willing to wait, irrespective of the attractive prices or enticing discounts. No retailer can ignore this critical issue, as replacing existing customers with new ones is quite expensive. The retailer can lose up to 18 months before new customers become profitable.
Retailers can additionally lose revenue through ‘viral marketing’ or word-of-mouth. Only a fraction of the dissatisfied customers complain to the store or company, but they certainly share their negative experiences with friends, family, colleagues and acquaintances. Most shoppers worldwide consider waiting too long in a line as a negative. According to an article in New York Times by Alex Stone, titled “Why Waiting in Line is Torture” (August 18, 2012), waiting in line evokes emotional feelings in shoppers such as stress and boredom, and makes them feel that their life is slipping away.
Despite the increasing number of buying channels available to consumers today, 90% of all retail sales transactions still happen in a ‘brick-and-mortar’ company. Even with competition from discounters and e-commerce, 70% of purchasing decisions and 90% of all purchasing transactions are still made in traditional ‘brick-and-mortar’ settings.
How retailers can triumph against long wait times?
To emerge triumphant in this war against lengthy checkout lines of customers, retail companies need to apply technology to enhance customer experience in brick-and-mortar companies. Although many retailers have applied technology to optimize several aspects of operations, such as supply chains, Point-of-Sales (PoS) systems, selection of locations, call centers, and online customer behavior, they have failed to adequately apply technology to improve the customer’s experience in ‘brick-and-mortar’ locations. To gain insights into the drivers of customer satisfaction, the retail companies need to use appropriate and creative data capture and analytics technologies, focused on studying and understanding in-store customer behavior, including the following:
- Identifying potential sources of customer complaints proactively
- Gaining real-life insights into customer behavior using store conditions and other important factors
- Procuring unbiased behavioral information through unconventional methods
The US supermarket giant Kroger is employing a mighty weapon – infrared cameras – that was earlier used by the military and law-enforcement agencies to track people. These cameras are located at the entrances and above cash counters of about 2,400 Kroger’s stores and help detect body heat. The cameras are paired with in-house software that decides the number of lanes that need to be open. Through this technology, Kroger has reduced the customer’s average wait time from four minutes, prior to the installation of the cameras, to 26 seconds after the installation of the cameras.
It’s evident that queue management is a significant element of customer service management in ‘brick-and-mortar’ retail environments. To execute this well, it is critical to measure wait times accurately and efficiently, and evaluate consumer perceptions of the experience.
By addressing checkout times and their impact on customer satisfaction, retail companies can significantly enhance a ‘perceived value’, which is a precursor to many other benefits the retailer would reap. In fact, The American Customer Satisfaction Index at Ten Years showed that even a mere 5% increase in customer satisfaction influenced an increase in stock values.
Standing in a queue at the checkout to pay is the last thing a customer does before leaving a store. At this critical point, any action that creates frustration or a negative impression in customers can make them less likely to return. To succeed in the world of retail, retailers have to make customer wait time a key performance indicator and monitor queues constantly through the use of sophisticated technology. This ensures that they realize the benefit of higher customer satisfaction and optimized labor costs.