Business

Why big-box retail needs a serious upgrade

One of the biggest challenge facing big box retailers is that online shopping is getting more convenient all the time.

Stored credit card information makes checking out a breeze. Expedited fulfillment like Amazon Prime, which offers free two-day shipping, dramatically reduces the delay in getting products. (In many markets, Amazon can deliver many products overnight.) These changes make brick-and-mortar shopping even less convenient by comparison.

Last week, I had an experience at a large national electronics chain that highlighted some of these important differences.

Some of these can be improved with technology, possibly creating opportunities for startups to plug these holes.

Returns

My first task was to return an iPod Touch. Around 11 a.m. on a Thursday, there were three people in line in front of me and one person working the returns counter. I stood in line stewing about the wait and getting more and more upset at the retailer.

Although returns have long been a hassle for online purchases, that process has gotten much easier. Nordstrom.com includes a prepaid shipping label that you can just stick on the box to send something back. Amazon lets you print out a label from its Web site. If a return was Amazon’s fault, it pays the return shipping. If not, it deducts the cost of return shipping from your refund. Still, that’s a lot more convenient than weighing your return, calculating postage, and going to the post office.

The ideal solution at retail would be to staff the customer service desk appropriately. But I don’t see that happening. A very good solution would be to give customers tickets and let them shop the store while they are waiting to return something or for other customer service. When the staff is available, they would be paged to the desk. This could be done with devices like the pagers that some chain restaurants use. Instead of getting upset with the store, consumers might actually buy something else.

Inadequate/incorrect/misleading signage

After I returned the iPod, I was browsing through the store and found a table with some open-box items. There was a sign that touted 50% off qualifying open-box items. But the sign had no definition of “qualifying”; it said that I had to ask an associate for details. The first associate I found just said it wasn’t his department. (No offer to help me find someone who could answer the question.) After a few minutes, I found an associate from the department who could answer. It turns out the discount applied to everything on the open-box table; if it was on the table, it “qualified”. So why not just say that?

How much does this thing cost?

A frequent frustration with offline retail is that you often don’t know what things cost. With online retailers, the current price is usually displayed right on the product page. In some cases (when there are manufacturer’s restrictions on minimum advertised price), you may have to add the item to your cart before you see the price. But this is just a click away.

I found an Epson projector on that 50%-off table that I wanted to buy. The store’s regular price was $649.99. It had an open box sticker that marked it down to  $585.99. (I did a quick check on Amazon and found that Amazon was charging $600 for a new unit.) But was the price of the open-box unit 50% off $649.99 or $585.99? Unclear.

As it turns out, the projector was still in the store’s system at $649.99. The clerk pulled out his iPhone and manually did the price calculation ($585.99 / 2 = $292.995). He then put that into the register.

If I had gone to the front registers, they would have had no idea about the discount, and this would have resulted in an even more frustrating experience. If the store had decided on a lower price, it should ring up at the lower price automatically, no matter what register I take it to. Target actually does a nice job on this. Each discounted unit is individually labeled. In cases where only a specific unit is discounted (for example, if it is a return), they go the extra mile to cover up the regular bar code so that the cashier can’t incorrectly ring up the higher price.

Manager to home theater

Back to my open-box projector. Because the correct price wasn’t programmed into the point-of-sale system, the clerk had to page a manager to approve the discount. The manager was busy with someone else, so I had to wait on that. Then the manager had to walk across the store to approve the discount.

I can program my TiVo from halfway around the world, but a manager can’t approve a discount from across the store? This seems like an ideal use case for mobile technology. When a price override request is made, the details should pop up on a mobile display so the manager can approve it from wherever she is.

But without that kind of solution on hand, all of the steps I had to go through at the retail store turned what could have been a 10-minute shopping trip into a 45-minute shopping trip. I was relating this story to a friend and his response was that I got a $600 projector for $300, so I should be happy. True. But given finite resources of store personnel, time spent on customers because of inefficient process hurts all customers.

Later in the day, I decided the projector was such a good deal, I should buy another one. There was a new clerk there who didn’t know about the special pricing. I showed him my receipt from earlier in the day and he agreed to match it.

When he ran my credit card, American Express suspected fraud. Apparently, their algorithms think it’s unlikely that I’d shop at the same big-box retailer twice in one day.

Unless big boxes start to close the technology gap, that will become increasingly true.

Rocky Agrawal is an analyst focused on the intersection of local, social and mobile. He is a principal analyst at reDesign mobile. Previously, he launched local and mobile products for Microsoft and AOL. He blogs at http://blog.agrawals.org; and tweets at @rakeshlobster.

[Top image credit: SVLuma/Shutterstock]


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