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Low Operating Standards Causes High Retail Defection

ServiceChannel’s May 2019 report on the state of Brick and Mortar retail is a damning tale of incompetence and lost opportunity leading to high retail defection. The report’s subtitle is:

The real reasons shoppers aren’t returning to your stores

Specifically, the report analyzes what causes customers to not return to a retail location and warns that retailers who have not invested in their physical locations leave themselves prone to disappointing in-store experiences and bad business consequences. Specifically for the latter, they mean defection.

What is the Opportunity?

The good news is that according to the report findings, 86% of consumers still make more than half their purchases at physical stores. When retailers offer great in-store experiences, shoppers spend more time in stores, make more impulse purchases, come back more often and think more favorably about the brand. Smart retailers view their physical locations as a strength and invest accordingly to prevent retail defection.

Where is it Going Wrong?

Only 18% of consumers think brands are delivering great customer experiences. In more detail, 70% of shoppers have had a recent negative experience in stores.

What this means is that retailers are not executing on the basic operational standards:

These basics include:

  • Empty or broken shelves
  • Disorganized inventory
  • Dirty bathroom
  • Parking lot issues (lack of snow removal, potholes)

• 64% have walked out of a store because of the physical appearance or disorganization.
• 20% have encountered spilled products or messy floors.

In particular, women control 60% of personal wealth in the US and account for 85% of all consumer purchases but are much less tolerant of a mess. In fact, a majority of women say messiness would keep them from returning to a store.

What is the Impact?

The impacts are catastrophic to the bottom line:

After one bad experience, 52% of shoppers will leave without making a purchase.

But it gets worse.

One bad in-store experience is all it takes for 69% of shoppers to decide not to return. For high-income shoppers (those earning more than $100,000 a year), expectations are even higher, with 76% citing they are less likely to return to a store after a single bad experience.

  • 64% have walked out of a store because of the physical appearance or disorganization.
  • 20% have encountered spilled products or messy floors.
  • In particular, women control 60% of personal wealth in the US and account for 85% of all consumer purchases but are much less tolerant of a mess. In fact, a majority of women say messiness would keep them from returning to a store.
  • We will add these stats to those we have mentioned before.

Restroom Experiences are the Worst

Restrooms matter, a lot. We have said this before, and in fact, have a specific feedback application – Flushcheck. This study also concludes that getting the restroom right is critical:

• 1 out of 3 consumers encountered a dirty bathroom in the last 6 months.
• 1 out of 5 would not return to a store because of a dirty bathroom.

After encountering gross bathrooms:

  • More than ¼ of shoppers leave without doing business.
  • More than ½ are less likely to ever return.

But if you achieve high restroom quality, 1 out of 4 say they’d return to a store for a clean bathroom.

Conclusions and Action for Retailers

The store is a mess – so fix it! Get shelving, inventory, and cleanliness to high standards

Retailers need to handle the basics BEFORE exposing consumers to too much “bleeding edge” technology. In fact, four out of five shoppers would rather have a clean store than one that prioritizes tech, and two-thirds of shoppers think retailers are too focused on experimental tech vs. in-store basics.

Lots of great research here to clearly show that improving the retail experience for customers by fixing the basics will pay huge dividends.