s more digitally-native brands and e-tailers open physical stores, they are struggling with one big question: How is this store effecting my bottom line? But the traditional methods of measuring the ROI of a store have failed to adapt with the changing world of commerce, where customers seamlessly move from online to offline back to online again. So how should brands track the importance of any one channel over another? Answer: They shouldn't.
Stores who are measured and incentivized on traditional methods alone respond by acting as a traditional store would. This has proven to fail. Brands should no longer look at their physical and virtual stores as two separate pieces but should instead give their stores the tools and frameworks to work as compliments to each other, the way customers expect.
In the traditional sense, measuring the ROI of a store is simple. Did my store make more money then it cost me to run it? Or, did my store make more money this year than it did last year?
But continuing to count on these metrics as performance indicators will not only give a limited picture of the impact of your store, but will also lead to poor decision-making surrounding what to do next. With online and mobile sales where they are today, the physical store serves more purposes than just a mode for transacting, and should be assessed with those opportunities in mind.
Stores can play a critical role across any and every step in the customer journey, from awareness > consideration > purchase > service > loyalty.
Many customers may come to your store as the last step in their decision-making process. They've done their research online, read the reviews, and are there for the final in-person look/touch/feel test. This final step is crucial to whether a customer pulls the trigger on an item. Using online data such as purchase history and abandoned cart information to invite these shoppers into your store for an in-person interaction with the products and your team is a great way to increase conversions and utilize your store. Simply sending a personal message out to high-potential purchasers saying hello and being sure they know the opportunity to vet an item in person is a great use of your store.
Another segment of customers uses their shopping days for discovery (the awareness phase). They simply want to research the brands and products out in the market, but they'd prefer to make their final purchase online at a later date. Any shopper who falls into this category is all too familiar with the disappointed look on the sales associate's face when this line comes out: "Thanks for all the help! You have a website right?" This look is a result of traditional retail's failure to recognize the role the associate has played in this buyer's journey. If the final sale happens online, the store gets no credit. But by empowering your associates to capture the shopper's information and send them over quick links to the products they showed interest in that day is not only an easy way to track the journey and give credit where credit is due, it will actually increase the likelihood that the customer follows through with her intention to buy.
Finally, for some shoppers, the physical store makes their lives easier, therefore earning the store (and brand) more loyalty and evangelism. BOPIS (buy online, pick-up in store) is a growing trend which allows online shoppers to avoid complications with delivery and unwanted shipping costs. Other shoppers use retail locations as their preferred method for exchanging or returning items which were purchased online. Empowering your store to work as a customer's own personal warehouse and fulfillment center can often result in increased foot traffic, additional purchases and as a result, higher lifetime value - convenience goes a long way.
So with all that said, how should retailers measure their store's impact? While examining direct in-store revenue and YoY growth is still an important metric, it shouldn't be the end-all-be-all answer. Brands must realize the omni-channel world their customers now live and operate in. This includes learning how different customers count on your store, and reacting to their needs. The classic expression, "The customer is always right" has never been truer than it is today, and as the data shows, customers love stores.
With Endear, your store can operate as more than a sales line on a brand's P&L report. Stores powered by Endear become another potential channel for your customer to discover, shop, and interact with your brand, much like Instagram, Facebook, and Amazon are in the online world. Each step of the buyer journey is tracked and reported on, no matter where she chooses to eventually buy. With Endear, you can leverage the same kind of data your digital teams rely on for decision-making and be just as sharp and deliberate with the decisions you make offline.