Improving Customer Experience in E-Commerce and in Person
Let’s say that your shopping list for one store consists of the following: a pillow shaped like an ostrich, 1,500 live ladybugs and an umbrella for your cell phone. Looking at this list, two things stand out: (1) you’ve fallen for some serious internet traps and (2) you’re likely shopping on Amazon.
With its wide range of products and relatively low prices — and its online platform and fast shipping times that offer consumers a quick, convenient shopping experience — Amazon has captured the heart of many a shopper.
The obsession with buying things online grew exponentially during the coronavirus pandemic, when Amazon and other e-commerce sites were generally seen as a way of survival. After all, those sites and the supply chains they depend on delivered essential items, such as shampoo, food and — of course — toilet paper, all in a contactless, efficient manner. The U.S. Census Bureau captured a 43 percent increase in e-commerce sales during the first year of the pandemic.
These newly discovered conveniences followed everybody into current times, and now, other stores are attempting to quickly adopt an e-commerce presence to stay competitive. This phenomenon has been appropriately coined “the Amazon effect.”
And it’s dramatically affected e-commerce as well as niche stores and brick-and-mortar companies.
What the Giants Do Better Online
Amazon is no longer the only company leading this change. Other large retailers like Walmart, CVS, Best Buy and Target have joined in. All are contributing to changes and adaptations in consumer expectations regarding the buying process.
Imagine: Within a few minutes, grocery shopping can be done online at Walmart without leaving home. You can purchase a suit for a dinner party at Target without a fitting. You can refill your prescriptions or buy Tylenol at CVS without standing up.
The upshot? The time-consuming shopping process has been stripped to the most basic procedures, with delivery speeds that are impressive. What used to be a few weeks of wait time has now been reduced to two-day or even same-day delivery in some places. In fact, from 2022 to 2023, customers’ expectations of order delivery fell from 2.36 days to 2.15, according to an ECDB report.
Such experiences make in-person stores more inconvenient.
For nearly a decade, large online retailers have been working to (1) differentiate themselves from competitors and (2) simplify the online shopping experience. It once seemed impossible for stores to deliver fresh foods to consumers, but Walmart is one of the first to find a way. Since 2016, the company has offered an automated e-grocery service, and in 2018, it announced its first new high-tech grocery distribution center.
Walmart’s competitor hasn’t been resting, either. Besides getting into the grocery delivery market with AmazonFresh, Amazon recently has been researching the use of drones for dropping off orders — and the drone fulfillment centers that would follow — in an attempt to automate the delivery system completely.
What the Giants Do Better Inside Stores
However, not all improvements are made through e-commerce. Stores such as Best Buy recognize the importance of consumers being able to physically see a computer or TV before they purchase one.
Best Buy, for example, has leveraged its in-person experience even further by collaborating with Google Canada, which helped to establish small Google stores at some locations to demo innovative products. Additionally, Best Buy offers a 24/7 service team: Geek Squad helps consumers with technology malfunctions and questions, another in-person experience Amazon lacks. Additionally, resources such as the Geek Squad are helpful to a company’s supply chain by providing information on customers’ expectations and pain points.
CVS has also looked to improve its customer engagement with its new omnichannel strategy to make its stores community health destinations by including three store models: (1) stores focusing on primary care services, (2) HealthHub locations with products and services for everyday needs, and (3) traditional CVS Pharmacy stores. CVS is effectively showing consumers that it’s a one-stop shop for anything medical-related, including convenient services that other giant corporations do not offer.
Meanwhile, such stores as T.J. Maxx and Trader Joe’s have implemented a “treasure hunt” experience by offering products that may never return to the shelves again. This feeling of “item rarity” and the push for buyers to find and “discover” items that they like motivates them to keep shopping there. Most of the time, when consumers shop on Amazon and other large sites, they can expect to find what we need.
At “treasure hunt” stores, this guarantee is absent and encourages people to buy the product while they still can. This business model also requires a strong supply chain, since owners will be working with wholesalers and retailers to buy a bulk amount of high-quality items to sell at a low price.
Competition from Niche-Market Stores
Niche stores understand that their customers want something specific, using that to their advantage. Too large to be considered small businesses, they provide opportunities and personalization that convince their customers to keep coming back. Being able to find and create differentiation from online giants is crucial to their survival.
Petco, which focuses on the health and well-being of pets, is one example. It’s recently begun bundling pet products, grooming services and veterinary care to combat the low prices of Amazon, while also encouraging people to visit their in-store locations. The company has opened PetCoach, an online site where consumers can ask questions and get advice about a variety of pet-related topics.
Another example is Michael’s, an arts and crafts store that hosts art sessions and camps for kids, where these customers use products that can be bought at the store. By exposing a young market to what it can offer, Michael’s is building a long-term relationship through fond memories with future buyers.
Can Mom-and-Pop Stores Compete?
With all of the advantages and constant improvements and innovations made by these large companies, its seems impossible that smaller ones could compete. However, a local hand-made knits shop can likely provide a more personal and memorable shopping experience than an online retailer can.
Bookstores are especially talented at this, with immersive exhibits and coffee shops nestled in the corner, offering a perfect reading atmosphere for consumers. Additionally, the mom-and-pop shops foster a loyal sense of community, since customers often share backgrounds and experiences with each other.
In general, though, small in-person businesses will have to continue to find unique aspects of the purchasing process that online retailers simply cannot provide. Most of the time, this boils down to human interaction and what customers can physically see and do in the store. Such in-person interactions provide mom-and-pop stores immediate feedback pertaining to their supply chains.
Highlighting Customer Experience
Another reason people may choose to shop at brick-and-mortar over online retailers is that they want to ensure the quality of what they’re buying. Often, a cheaper price can signal a trade-off: a lower quality product.
Many consumers choose in-person stores for larger-expense and longer-use items, like refrigerators and wall paint because they want to physically see the product before they buy it. Additionally, some have had experiences with purchasing counterfeit products like fake designer handbags that aren’t labeled as such online. Shopping in-person stores can build trust and brand image.
To compete with e-commerce giants, business owners should place a strong focus on the quality of products they sell to gain the trust of their customers. Additionally, they should look to larger retailers for supply chain efficiency when it comes to order delivery times, while also focusing on providing a customized in-person experience that those same retailers will lack.
(Photo credit: Getty Images/Simonkr)