Making changes to your operations can add up to success, new McKinsey report says
Consumers are more demanding than ever “and tolerate fewer shortfalls,” according to a new report from global consulting firm McKinsey.
That means bedding retailers have zero room for error, especially in five key areas, if you want to win consumers’ business and loyalty.
Here are the parts of your retail operation that you need to sharpen, according to McKinsey partners Tiffany Burns and Tyler Harris, and McKinsey consultant Alexandra Kuzmanovic.
1. Zero difference in channels
Retailers need to give consumers similar, seamless experiences whether they shop online or in-instore — and their services need to cross channels. That means providing things like buy online, pickup in-store and hiring excellent customer service reps to handle customers across platforms and locations. Some retailers allow shoppers to schedule in-store shopping appointments online.
Big retailers like Target, are “transforming stores into supply chain nodes to serve customers both online and in the store,” according to the authors. “Target moved quickly and early to devote operations and space to e-commerce fulfillment, including curbside and in-store pickup, and has since evolved to ship-from-store in most locations. Staff are now cross-trained to pick goods from the sales floor and (the retailer has created) ‘fast-moving’ zones for certain SKUs to get nearby customers what they want, when they want it.”
2. Zero need for assistance with transactions
The pandemic accelerated use of self-checkout, and McKinsey’s research shows nearly three-quarters of consumers who have used self-checkout in the past two years plan to continue using it. Mattress shoppers can’t really pick a mattress off a showroom floor, carry it to a scanner, pay and be on their way. But there are ways you can simplify and speed the process at the sales desk, and incorporate more ways for shoppers to browse and buy accessories more quickly.
Instead of cumbersome processes at the sales desk, retail sales associates should be spending their time on consultative selling that educates and informs shoppers.
“Sephora and Trader Joe’s have both adapted the roles of in-store associates to pack more punch in customer support. At Sephora, they provide personalized recommendations and tips with the help of mobile devices loaded with customer loyalty data,” the report says. “Trader Joe’s, perhaps counterintuitively, urges staff to stock stores during peak shopping hours, increasing the chances that they will interact with customers in what they believe is a high value-add way: answering questions, introducing new products, and making cross-selling suggestions.”
3. Zero wait for delivery
“Two-day delivery is the new five-day, and instant will soon take its place in many markets,” the authors says. “… More than 90% of consumers now see two- or three-day delivery as the baseline. Thirty percent expect same-day delivery, and they’re more likely to be willing to pay for it, especially if they’re younger, urban and generally more time constrained.”
This is an area where many bedding retailers already excel. If your delivery windows are longer, now is the time to shorten them. If you can’t grow your own internal delivery team, partner with third-party delivery service that excels at what they do.
4. Zero tolerance for inaction on equality or sustainability
Many Millennial and Gen Z consumers want to do business with companies that focus on sustainability, and diversity, equity and inclusion. According to McKinsey, nine in 10 Gen Zers say companies “should address racial equity” and 40% consider “sustainable practices in their purchases.”
“Every retailer should take a clear-eyed look at diversity in the ranks and on the shelves. It can count the number of diverse and Black-owned brands in its merchandising mix, for example, and tally the revenue generated by those brands,” the report suggests. “… (They) also can also review diversity in staffing, particularly in leadership positions.” And then make concrete plans for improvements, if needed.
The biggest buzzword at the recent ISPA EXPO in Orlando, Florida, was sustainability. Industry suppliers are offering a host of recycled, recyclable and natural components to makers of sleep products. And machinery companies are reconfiguring production techniques to reduce material waste and energy usage, and to make mattresses easier to recycle at the end of their lives. Talk to your vendors about what they’re doing on the sustainability front — and share that info with your customers.
5. Zero wiggle room for talent
“To recruit and retain the right people, retail leaders are raising pay, providing more autonomy (through, for example, flexible ‘gig’ schedules), promising better career paths and more,” the report says. “Traditional recruiting and onboarding will not be enough for most retailers in the years ahead.”
To adapt, retailers may need to consider offering more flexible staffing models, providing better training during onboarding, and improving cross-training to boost the skills of your entire staff and give you flexibility when you’re short-staffed.