Although the majority of consumers still prefer to shop in-store, 72 percent admit to showrooming in the last 12 months. Smartphones are changing the way people shop, challenging retailers to adapt to the changing times.
In August, Salesfloor, a technology platform for omnichannel retail associates, announced a mobile messaging feature that connects customers to their local store associate via text messaging. The new service helps associates make product recommendations using SMS so that customers can shop online with their local store or favorite associate.
In the below interview, Jason Steiner, retail director for Kiehl’s, and Oscar Sachs, CEO and co-founder of Salesfloor, provide an inside look into how the cosmetics retailer is using this new technology, as well as the results it's seeing.
Total Retail: Are store associates compensated for online sales transacted in-store? How is Kiehl's addressing the issue of attribution for purchases?
Jason Steiner: For our in-store teams to be engaged with Salesfloor’s technology and not create an online vs. e-commerce divide, we knew we needed to compensate them. This also helps our associates view shoppers as omnichannel customers. Since we started compensating our associates through Salesfloor, they understand the customer journey better. We've also seen the average basket size is 10 percent higher with the help of associates online. Based on this, we’ve started creating omnichannel sales objectives, which really shifts how we traditionally view sales across differing channels and treats everything as a full P&L.
Oscar Sachs: If you’re going to serve an omnichannel customer, you can’t worry about online sales vs. in-store stores. Retailers are creating omnichannel P&Ls to make sure that internally the right team is getting the proper credit.
TR: What has been the reaction from Kiehl's store associates to the new clienteling tools they have at their disposal?
JS: It’s been extremely positive. They love that they now have the ability to act more entrepreneurial. They also use the technology at their disposal to build even stronger relationships with their shoppers, even when they’re not physically in-store. Given the challenge of decreasing in-store traffic, it also gives them the ability to drive success to their online stores on slower in-store traffic days.
OS: One of the big bonuses that’s made associates very happy is that they don’t feel that they're losing sales to the showrooming customer anymore. With each store or associate having their own online storefront, they're in business 24/7 — even when they’re not working 24/7, they're able to transact 24/7. We’ve heard from associates that they also like how they're no longer limited to the inventory in the store. They can sell whatever is in the .com assortment. We’ve also been told by our retailers that this has become a recruiting and retention tool for them.
TR: How long and what is the training process like to get store associates using the Salesfloor solution?
JS: Like any other [new tool], there’s a period of adaptation. Piloting in specific stores allowed us to iron out a lot of the kinks and ensure that the program was successful. The tool is very user friendly, so I would say the challenges have been more operational — really ensuring that the teams have bought into it and understand how it benefits them directly.
TR: What are the types of customer data that Kiehl's is collecting, both online and in-store, to enable seamless omnichannel shopping experiences?
OS: What we consider the non-negotiable data is shopper first name, last name, email address, postal code and gender. RFM (recency, frequency and monetary) is also really important to us. When was the last time the customer made a purchase, how often does that customer purchase, and how much is that customer spending on each purchase? And obviously we want to know what platform they’re using and, of course, the items they’re purchasing.
TR: What has been the reaction of Kiehl's in-store customers to the clienteling tools that store associates have? Is there any pushback or concern that this is a little too "Big Brotherish" that the retailer knows so much about them when they enter a store?
JS: We actually notice the complete opposite. The nature of our store is "high touch" service, and our customers actually shared with us the frustration that we had so much information on them, but weren’t really doing anything with it. With Salesfloor, we now have the ability to use this data to better serve our customer, whether they're physically in-store or at home. Shoppers feel we're now using data to better serve them.
TR: What are the metrics retailers should be measuring to evaluate the effectiveness of their clienteling tools?
JS: As an omnichannel retailer, the metrics for us are RFM. We don’t view our shoppers as an online customer or an in-store customer — they're omnichannel customers. That’s why we look at their recency of purchases, frequency of purchases and how much they’re spending.
OS: We have various metrics that we present to retailers to give them the opportunity to pick from, because metrics differ based on each retailer’s unique customer journey. Generally, we look at the number of requests coming in-store from customers who shopped online via Salesfloor. We also look at open rates when an associate reaches out to a shopper on a one-on-one basis. This proves extremely effective, as our open rate is double the national newsletter open rate. We also look at clickthrough rates.
TR: For Kiehl's, what percentage of purchases made are online vs. in store?
JS: We have a button on our register that lets us track all of the customers that are coming in following their interactions with Salesfloor. For us, the benefits aren't just tied to purchases. Salesfloor also benefits customer acquisition. Salesfloor gives us the opportunity to drive shoppers in-store, so that’s also of big value to us.
OS: Our retailers see that Salesfloor doesn’t just convert sales online — it also drives shoppers in-store. For every $100 converted online by a sales associate via Salesfloor, retailers are able to attribute up to $68 purchased in-store. So roughly one-third of the impact of serving customers online was shown to benefit the store, too.
TR: How does this solution from Salesfloor impact other areas of Kiehl's organization — e.g., inventory management, order fulfillment, marketing?
JS: Stock issues happen, and sometimes we run out of stock on key SKUs in-store. With Salesfloor, our associates aren't limited to selling what’s physically in their stores — they have access to all SKUs on our e-commerce site.