Don't count on retail complacency

Las Vegas -- Think you're meeting customers' expectations? Don't count on it.

That was the aptly named educational session delivered by Jim Robisch, senior partner with the Farnsworth Group, at the National Hardware Show today in Las Vegas.



The short of it is that many retailers believe they're doing better than they are. The growth and increasing stability in the market is helping to create a "false sense of competence among many retail operators," as he put it. The long of it is that there are a lot of facts and figures to back it up.



Customer expectations themselves are a moving target. The wants and needs of the retail market -- particularly at the local level -- are changing at a rapid pace. There's also a lot of new competition, new technology, and emerging generations entering the marketplace to help speed that process along.



One illusion that Robisch wanted to dispel right away was that brick and mortar was in a significant state of decline. According to his data, 72% of customers expect to shop in-store just as much as they did last year. A full 18% expect to shop more, actually.

Despite the importance of the in-store experience, only 27% of customers feel that retailers provide a consistent experience across various channels. Compare that to the 51% of retailers who think they succeed on this front, and that discrepancy provides the basis for much of Robisch's argument.



So what are customers' values? For one, prompt service (54%), followed by a personalized experience (30%) and smart recommendations (30%). A lack of prompt service will actually drive 85% of customers out of the store.



For the hardware and home improvement channel specifically, which has long prided itself on its attention to customers, the primary struggles have more to do with its hesitation to embrace new technology and understand the changing needs of local markets (customers, who have an average attention span of 8 seconds, expect greater relevancy than ever before).



One area where the industry is well behind customer expectations is self-service, or the ease with which a customer can navigate the store or website.



When you compare the average hardware retailer with a best-in-class operator, self-shopping, product selection, and project assistance are the weakest areas, with typical retailers getting a rating of 2 out of 5 stars, 1 out of 5, and 2 out of 5, respectively. A best-in-class retailer scores 5, 4, and 5, respectively.

The gap was slightly narrower for product assortment, with the typical retailer scoring a 2 for product breadth, 2 for in-stock reliability, 2 for range of price options, 2 for variety of brands, and 1 in availability of latest new products. A best-in-class retailer earns a 4, 4, 3, 3 and 3, respectively.

As for price expectations, independents are not far behind the best-in-class. In categories like competitive prices, low everyday prices, lowest price, ad prices, and lowest price guarantee, the discrepancy was generally 1 star.

One star, as it turns out, can still mean quite a lot.