Attention, Retailers! How Convenient Is Your Convenience Strategy?

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Congested parking lots, out-of-stock merchandise, interminable checkout lines, indifferent sales help or no help at all—once these were facts of life that retail customers reluctantly tolerated. Now customers enjoy more retail alternatives than ever before, from one-stop superstores to the Internet. Driven by time pressures, they value quick-and-easy shopping excursions. They expect retailers to meet their needs, not the other way around. The retailer that spares its customers hassles and delays wins their business and outperforms its old-fashioned competitors. From prepurchase through postpurchase, customers want convenience.

Few dispute the importance of convenience.1 Many retailers proudly declare their commitment to customer convenience. Yet how many managers have defined convenience from the customer’s point of view? How many have systematically crafted a convenience strategy? Instead, managers use “convenience” as a catchall term which always includes location and may include other features such as product assortment, knowledge of sales associates, speed of checkout, hours, service levels, store layout, and ample parking. Managers rarely consider the relationships among these features.

While convenience remains ill-defined among retailers, industry studies provide some insight into how consumers define convenience. Discount Store News conducted focus groups in which customers were asked, “What makes a store more convenient?” Respondents cited one-stop shopping, store directories, well laid-out and clearly-marked aisles, wider aisles, consistent in-stocks, clearly presented pricing, easy return policies, sufficient staffing, expanded 24-hour service, and efficient and centralized checkouts. Results of a 1996 Roper Starch Worldwide survey show that customers are annoyed by illogical groupings of merchandise and will leave a store empty-handed if they think checkout lines are too long.2

For customers, retail convenience means shopping speed and ease. The best-performing retailers understand the customer perspective but go beyond it. They view the retail experience as an integrated whole consisting of distinct but related parts. They enhance the convenience of their market offers in four main ways that encompass the entire shopping experience: They are easy to reach (access convenience); they enable customers to speedily identify and select the products they want (search convenience); they make it easy for customers to obtain desired products (possession convenience); and they expedite the purchase and return of products (transaction convenience).3 By better understanding the forms of convenience and how they work together, retailers can formulate convenience strategies that support lasting customer relationships and raise their competitiveness to new levels.

Four Ways to Offer Convenient Shopping

View Exhibit

The Rising Importance of Shopping Convenience

Customer convenience has driven most innovations in retailing, including supermarkets, department stores, strip centers, regional malls, and category superstores. The emphasis that customers place on convenience has prompted retailers to extend one-stop shopping, redesign store operating systems, emphasize the sale of services, and invest in nonstore retailing.

The demand for more convenient shopping reflects several trends, including increasing numbers of women in the workforce and consumer perceptions of limited time. In 1998, 63.6% of married women with children under 6 years of age worked full time or part time compared with 18.6% in 1960—a 242% increase. Women now comprise 41% of America’s full-time workforce and 68% of its part-time work-force (one-third of whom spend at least 35 hours per week on the job, the equivalent of a full-time schedule).4 Because working women typically retain household management responsibilities, convenient alternatives to traditional chores like shopping have become less of a luxury and more of a necessity.

According to a 1998 survey by Kurt Salmon Associates, the majority of consumers (56%) agreed that they have far less leisure time than in the past. Most believe they have insufficient time to do all they must do plus all they want to do. Because so much shopping falls into the “must-do” category, busy consumers seeking to simplify their lives favor retailers that save them time and energy.5

Many consumers gain time for other activities by decreasing their shopping time. Consumers in Kurt Salmon Associates’ survey spent less than 1% of their total time shopping; 52% intended to shop even less to increase time for other uses. The consulting firm concludes that unless retailers rise to the challenge, consumers “will continue to stay home and use their limited time for something more enjoyable and satisfying than shopping.”6 A Management Horizons report on retailing in the new millennium states, “Busy consumers will look for ways to streamline, consolidate, and simplify their shopping experiences. They will respond favorably to retail offers that make it easier, faster, cheaper, and more fun to shop. The need to redefine the offer and add value from the customer perspective will be a driving force for all players.”7

Many retailers are striving to become more convenient. Consider the restaurant and food-service sectors. Restaurants now capture almost 50% of America’s food dollar. A typical American buys restaurant meals 2.6 times per week, or 133 times during the year. Between 1985 and 1998, the number of take-home meals per capita rose 59%. Fast-food restaurants use a variety of methods, including preselected meal combinations and self-serve drink stands, to get meals to customers more quickly. Even Le Bernardin, a four-star restaurant in Manhattan, offers the “timely lunch”—30 minutes from order to table. Consumers’ desire for quick and easy meals has encouraged supermarkets to stock a larger supply of prepared foods and portable foods (such as energy bars) that travel well in a briefcase, handbag, backpack, or pocket.

Some supermarkets and mass merchants have added a self-scanning option in which consumers scan their own orders to improve the perceived speed of checkout service. Many convenience food-store chains offer fresh lunch and dinner items to eliminate customers’ need to visit fast-food restaurants. Large-format retailers are experimenting with smaller, more accessible stores that are faster to shop (e.g., Wal-Mart Stores Inc.’s new “neighborhood” grocery store).

By saving customers time and energy, retailers increase the value of their market offer. Offering convenience to customers, however, is not a simple matter. Convenience is a moving target. What was once fast (e.g., 24-hour photo processing) may now be slow. What was once easy (e.g., renting movie videos) may now be burdensome. When a retailer innovates and raises consumers’ expectations, those consumers demand that competing retailers increase convenience. Consumers who experience shortened queues in discount stores, for example, will begin to expect shortened queues in supermarkets. Moreover, what is convenient to one or several market segments may be irrelevant to others. Dual-career households or college students may find 24-hour service valuable, but it may mean little to older shoppers who value close-in parking and personalized service. One customer may praise an Internet retailer as a convenient alternative, while another may be unwilling to assume a delivery charge or wait for a purchase to be delivered.

Retailers fail to deliver convenience for many reasons. What is efficient for the retailer is often inefficient for the consumer. Some retailers clutter their sales floors with in-aisle displays that pose an obstacle course (especially when the store is crowded with customers) and block the customer’s view of other merchandise. Supermarkets commonly locate frequently purchased products (e.g., bread and dairy products) near the back of the store to encourage impulse buying as customers walk through the store. To save on labor costs, some retailers maintain minimal staffing levels, leaving customers to search or wait for store associates who can provide assistance. Closed checkout lanes forcing customers to queue up in open lanes is another common example of retailer “efficiencies” that translate into customer inefficiencies.

In the short term, these retailers save themselves money. Over time, however, they drive their customers to the competition. The most successful retailers demonstrate genuine respect for customers’ time and effort. By investing in all four forms of convenience, they help their customers shop expediently and without unnecessary barriers.

Reaching the Retailer

Access convenience concerns the speed and ease with which consumers can reach or engage a retailer in person, over the phone, through a computer, or in other ways. Like all forms of convenience, access convenience is germane to both store and nonstore retailing. It includes an accessible location, parking availability, store hours, proximity to other stores, and telephone and Internet access. Without accessibility, all other forms of convenience are irrelevant.

Many consumers view shopping at large regional malls as inconvenient because of traffic and parking congestion, long distances to maneuver, and crowds. (Citing a British study, CBS Evening News reported that “the stress level of a male going into a crowded mall is roughly equivalent to a fighter pilot going into combat.”8) Many consumers, increasingly task-oriented and less interested in recreational shopping, find large malls inefficient. They are going back to strip shopping centers and freestanding locations, to which some major retail chains have returned.

A leader in the movement back to freestanding stores is Walgreen Co. Of the chain’s more than 2300 stores in 1998, half were freestanding, up from 230 stores in 1992. Because of managed care, many pharmacy customers now make only a minimal copayment; convenience rather than price is often the determining factor in choosing a pharmacy. The freestanding format allows for drive-through windows, which Walgreen offers in more than 1000 stores. In locating stores, the company focuses on targeted demographic groups, numbers of prospective shoppers, street visibility, easy access, and ample parking. It seeks locations at “the corner of Main and Main.” Stores relocated to freestanding sites have significantly increased customer counts and revenues. Relocating away from supermarkets, with their competing in-store pharmacies and expanded health and beauty care sections, has also improved the performance of Walgreen stores. In discussing Walgreen’s commitment to convenience, CEO Daniel Jorndt mentions the company’s early development of one-hour photo departments, touch-tone telephone prescription refills, 24-hour stores, freestanding locations, food departments, and drive-through windows designed to capture the business of “precision shoppers” for whom “shopping has become a strike mission: Get in, find what you want, buy it, get out.”9

Some astute retailers are locating their businesses close to where customers are already present. Staples Inc., for example, is placing Staples Express stores (offering a limited but carefully-defined merchandise mix) in office buildings, train stations, bus depots, and airports. Both Wal-Mart and The Home Depot Inc. have developed “neighborhood store” formats to penetrate areas that were previously off-limits to big-box stores. Wal-Mart’s Neighborhood Markets, which are only 40,000 square feet (about 3700 square meters) in size, were designed to attract shoppers who find the company’s supercenters remote or overwhelming. The Neighborhood Markets sell fresh foods, traditional groceries, and health and beauty products; they leverage Wal-Mart’s mighty distribution system to maintain high levels of freshness and in-stock availability. Home Depot’s new neighborhood store, which is one-third the size of its traditional 110,000-square-foot (10,200-square-meter) store, sells lawn and garden supplies, private-label tools, and home-improvement products. Located closer to suburban consumers, these smaller stores covet an estimated $50 billion in hardware sales currently being captured by traditional hardware stores (e.g., Ace Hardware Corp.; True Value; Sears, Roebuck and Co.) and discounters (e.g., Wal-Mart, Target Corp.).

In Japan, convenience stores have multiplied twenty-fold in the past two decades to number close to 50,000: one outlet for every 2000 people. Drawing customers from both offices and homes, these compact (1600 square feet—149 square meters—or less) stores are open 24 hours per day, seven days per week. Merchandise includes rice balls, sandwiches, packaged lunch boxes, soft drinks, milk, magazines, video games, takeout breakfasts, afternoon teas, evening meals, late-night snacks, and liquor.Customers can buy stamps and theater tickets, use fax and color-copying services, pay insurance premiums and utility bills, send parcels, and get cash. Japanese convenience stores have enjoyed double-digit sales growth against declining sales in other retail sectors.10

As consumers consolidate tasks to minimize shopping trips, a store’s proximity to compatible businesses becomes important. The rapid development of airport retailing demonstrates this. Schiphol Airport in Amsterdam offers two shopping centers for passengers, airport employees, and nearby residents. One is tax free, offering souvenirs (e.g., cheese, tulip bulbs) and luxury items (e.g., diamonds, porcelain); the other, which is outside customs, includes a supermarket and caters to ordinary shoppers and those with airport-related jobs.11

More retailers are shifting or extending their hours of operation to better fit customers’ preferred shopping times. When market research revealed that some customers wished to shop on the way to work, OfficeMax Inc. began to open many of its stores at 7 a.m. In 1998, 55% of U.S. supermarkets were open 24 hours per day.12

Greater access convenience for customers is one of the primary advantages of direct retailing. In effect, the retailer comes to the customer rather than the customer going to the retailer. Catalogs (e.g., Spiegel Inc., J. Crew Group Inc.), direct selling (e.g., Mary Kay Inc.), television home shopping (e.g., QVC Inc.), Internet commerce (e.g., Amazon.com Inc., Dell Computer Corp.), and consumer-direct grocery services (e.g., Peapod Inc., HomeRuns.com Inc.) all make “storeless” shopping possible. Consumers can shop via the Internet or catalogs 24 hours per day, 365 days per year, without having to even put on their shoes; the time-consuming parts of shopping at physical stores—driving, parking, and coping with traffic and crowds—are eliminated.

Customers who use nonstore channels do so largely because of time- and place-related convenience.13 For this reason, speed and ease of access are even more critical for direct retailers than for store-based competitors. At catalog retailer Coldwater Creek Inc., all employees, from those in accounting to those on the loading dock, are trained to handle overflow calls from customers. The average answer time at Coldwater Creek is three seconds, one of the best answer times among catalog retailers.14 Shifts in consumer lifestyles encourage retailers to become more accessible. Tupperware Corp., for example, is moving into shopping mall kiosks, television infomercials, and onto the Internet to make products available to working mothers with limited time who want but can’t find Tupperware. As one online Tupperware saleswoman notes, “Not everybody has time to go to a party… . People are busier now. This is the way things are going to go.”15

Convenient access is a prerequisite for all other types of consumer shopping convenience.16 The speed and ease with which consumers can make contact with retailers powerfully influence their retailer choices. But access is only part of consumers’ assessment of a retailer’s shopping convenience. Accessible retailers can still lose business if they are inconvenient in other ways. Access convenience gets retailers off to a good start with busy or tired consumers. But that’s all it is—a good start. It gives retailers the chance to compete early in the process.

Locating the Right Product

Search convenience is the speed and ease with which consumers identify and select products they wish to buy. Retailers can help customers find the right products through focused merchandising, intelligent store design and layout, knowledgeable salespeople, customer interactive systems, and visual merchandising practices, especially product displays, packaging, and signage. In many cases, retailers offer customers quality and price guarantees that reinforce sound merchandising decisions.17 The more effective a retailer’s efforts in facilitating customers’ product searches, the quicker and easier the customer’s journey through the shopping experience.

Retailers that achieve search convenience usually offer a dominant assortment in a particular product category (e.g., telephones) or collection of categories (e.g., office supplies), or to a specific customer segment (e.g., runners, do-it-yourselfers). These stores give buyers confidence that they will find the products they want without having to go elsewhere. Urban Outfitters Inc. is a chain of soft goods stores designed for the twentysomething (and younger) set. The company’s assortment (which includes apparel for both sexes and accessories for homes or dorm rooms) is so narrowly focused, relative to customer age and lifestyle, that it can be attractive to its target market.

Lids Corp., a chain of more than 100 stores based in malls, offers an assortment in a single category: baseball caps. The wraparound, floor-to-ceiling-hats approach makes every product visible and available to try on. Customers who want a baseball cap know they can find just the right one at Lids. Zane’s Cycles is one of the most successful independent bicycle retailers in the United States. Its stores display more than 250 bicycles and a full complement of bicycling accessories in a 7500-square-foot (700-square-meter) space. As owner Chris Zane states, “When you come into our store, you know we are in the bike business.”18

Easing the product search entails moving customers through the shopping experience efficiently. A physical store and a virtual store can be easy to access but slow and laborious to use. A store’s layout, design, and visual merchandising promote or hinder convenience, as do the availability and competence of sales associates. Although technology has accelerated the shopping process for customers, many retailers’ inability to implement responsive service or attend to details creates problems. For example, in-store kiosks let customers obtain price and product information quickly; mobile phones let sales associates assisting customers contact other departments, stores, and distribution centers immediately for product information. Yet customers still criticize stores for simple practices, such as failing to clearly mark sale items and post prices, that make shopping more difficult.19

Although most customers know the categories of products they intend to buy, increasingly they decide to buy specific merchandise only after they are in the store.20 Store retailers use a variety of techniques to facilitate the search process for customers. KaBloom Ltd., a Boston-based flower retailer, is built around a room-size, walk-in, self-service cooler. Customers can select their own flowers identified by name and price rather than wait while a florist creates an arrangement.21 Restoration Hardware Inc., a fast-growing company, is known for its eloquent signs posted next to each item. The signs tell a story about each of Restoration’s products and provide detailed information about the item’s construction, components, and functionality. CEO and founder Stephen Gordon continues to compose all the text himself.22 Adler Modemarkte GmbH, a German chain of discount stores, sells apparel. Color-coded tags help customers quickly spot their sizes. Fitting rooms are located in the center of the selling floor for easy access from all departments.

Sales associates can facilitate the search process in their role as information intermediaries. Personal shoppers at middle- and high-end fashion department and specialty stores, for example, recommend and reserve specific products for their clients. Following the examples set by fashion retailers Neiman Marcus and Nordstrom Inc., many firms now prepare sales associates to sell across store departments, anticipating customers’ tastes, offering personalized advice, and matching merchandise to shoppers. Acting as “purchasing agents” for their customers, these associates deftly combine customer and merchandise knowledge.23

Customer interactive systems (e.g., kiosks) that enable customers to access product information improve search convenience. The electronic gift registry is a particularly successful type of interactive system. Gift purchasers appreciate search convenience because of the guesswork associated with gift buying. Registries are now available for housewarmings, baby showers, birthdays, graduations, back-to-school, retirement, and Christmas, in addition to the traditional anniversaries and weddings (bridal registries are a $7.5 billion business).24

Some retailers use demonstration and sampling to help customers select products. At Circuit City Stores Inc., every air conditioner on display is plugged in and can be turned on by customers, who then evaluate how cold, loud, or powerful the machines are. NikeTown stores offer basketball courts where customers can subject shoes to a trial run (and other customers can be entertained). Demonstrating and sampling products that are difficult to buy because of variety, complexity, or cost helps customers make more informed decisions faster.

Nonstore shopping offers many opportunities to match customers with the right products. During a catalog sales transaction, for example, the sales representative can access details of a customer’s purchasing history, advise about substitute products, offer sale items, and assist with style, sizing, selection, and shipping alternatives. Delia’s Inc., a catalog company that targets teen-age girls, hires 18- to 19-year-old female customer service associates who can relate to 12- to 15-year-old customers and provide them with information they can trust.25

Customers describe online shopping convenience as a function of speedy site navigation, easy browsing, the ability to link to related sites, access to product information, wide selection, and reduced shopping time, all of which relate to search convenience.26 They consider the use of search engine capabilities to find book and compact disc titles more quickly to be part of the time savings equation. The process becomes even more convenient as sites that shop for the best deal among Internet merchants proliferate—for example, Mysimon.com, Bottomdollar.com, Buyingguide.com, and Consumerworld.org. Intelligent agent software programs that search commercial sites and produce a list of items and prices offer a radically new form of convenience. Comparenet.com, a free service, lets users compare features of more than 10,000 products. Some shopping agents simultaneously shop at thousands of stores and query search services and sites for product reviews, taking the customer to the selected site with order form filled in.

True interactivity is likely to be the primary driver of online convenience: the ability to address an individual, gather and remember that individual’s response, and address the individual again, taking his or her response into account.27 Internet retailers use “collaborative filter” technology to run programs (e.g., CDNow’s Album Advisor; Amazon’s Bookmatcher) that use buying histories and volunteered comments to create “merchandising dossiers.” Retailers use these dossiers to predict individual customers’ taste and to recommend products. These services are, in effect, electronic versions of personal shoppers. Lands’ End Inc. accelerates the customer’s search through its “virtual mannequin” personalization feature, which, using measurements and preferences provided by online apparel shoppers, displays images of selected items and suggests coordinated items (e.g., a crew-neck sweater to complement a chosen shirt and khakis).

Retailers enhance convenience by moving customers to the products they want to examine or buy. As customers become accustomed to the search speed and efficiency offered by online retailers, they may increasingly view the in-store search as labor-intensive. Yet stores have some convenience advantages, too, as the next sections reveal.

Obtaining the Product

Possession convenience is the speed and ease with which consumers can obtain desired products. It exists when the merchandise is in-stock and available on a timely basis.

Merchandise availability results from a retailer’s strong in-stock position, timely production, or timely delivery. Some retailers (e.g., Nordstrom) guarantee that advertised products will be in stock. Gap Inc. invests in high inventory per square foot to let stores carry many units in each size and avoid disappointing customers. Every LensCrafters store is a manufacturing facility, able to produce custom-crafted lenses. LensCrafters built its reputation on preparing glasses for customers on the same day as purchased—usually in an hour. To streamline the eye examination process, the company locates independent, licensed optometrists next to the stores.28 Walgreen’s Intercom II, a computer-based satellite system, links all stores to maintain customers’ prescription records so that customers need not return to the same Walgreen store for refills. Walgreen has initiated a trademarked auto prefills system, which monitors all refillable prescription files, prepares the refill, and alerts customers by telephone before they run out of medicine.

Timely delivery is another way that retailers get the product to the customer. Gallery Furniture in Houston, the most successful single-store retail furniture business in the United States, offers same-day delivery. This service requires operating a distribution facility 24 hours per day, seven days per week; when necessary, the store enlists salespersons (even the owner) to make deliveries. Customers often arrive at home to find the Gallery delivery truck waiting for them. Other furniture retailers require customers to wait days, weeks, or even months for their purchases.

The consumer-direct industry predicts that the next major trend in the grocery industry will be electronically ordered, directly delivered products. Consumer-direct companies, such as Peapod, Streamline.com Inc., Shoplink.com Inc., and HomeRuns, deliver goods and services ordered online (e.g., packaged groceries and perishables, dry cleaning, video rentals) to customers’ homes. Although a 1996 Andersen Consulting study predicted that this industry’s revenue would grow to $85 billion by 2003, consumer demand has been weaker than expected. Forrester Research Inc. predicts that the online grocery market will develop slowly, to reach $10.8 billion in 2003 (approximately 2% of traditional grocery industry sales). The full-service segment of this industry is constrained because it is bound to urban centers, serves a limited target market, and must charge high membership and delivery fees. Despite consumers’ self-reported disenchantment with supermarkets, the consumer-direct companies so far have not had the power to change entrenched grocery shopping behavior.29

While Internet shopping can be high in search convenience, it can be low in possession convenience. Online customers who save a trip to the store exchange that benefit for a delay in receiving their goods. For this reason, Amazon.com sends three notes during the order process: one acknowledging the order, one saying it will be shipped, and one saying it was shipped. Although the company reports that it meets a commitment to ship any book in stock within 24 hours, fulfillment problems have arisen because of limited warehouse space or strong seasonal demand. No retailer suffered more embarrassment during the Christmas selling season of 1999 than Toys R Us Inc., which late in December announced that it could not deliver all the gifts customers had purchased online. The merchandise was in stock but could not be packed and shipped in time for the holiday. The direct delivery of certain goods and services over the Internet (e.g., digital distribution of music and software) can overcome this weakness and may radically change the market structure in some retail sectors.

One-stop shopping offers possession convenience by bringing together a vast array of goods and services in one store. Supermarkets (e.g., Publix Super Markets Inc.) and supercenters (e.g., Wal-Mart) now offer banks, fast-food restaurants, coffee bars, video rentals, hair salons, optical shops, and children’s activity centers under one roof. A Kroger store in Alpharetta, Ga., houses a cardiohealth center, a branch of NationsBank Corp., a 24-hour “customer care center” (with services ranging from dry cleaning to driver’s license renewal), and a classroom for cooking lessons. Wal-Mart is opening its vast super-centers, which combine discount store and supermarket assortments, at a rate of 120 to 130 per year in the United States, and plans to do so “indefinitely.” The company acknowledges that every Wal-Mart discount store could potentially be replaced by a Wal-Mart supercenter.30

One-stop shopping convenience has driven the development of innovative specialty concepts. Eatzi’s, a high-volume prepared-foods store that features clusters of chefs working in open kitchens, has been wildly popular in Dallas, Houston, and Atlanta. Eatzi’s recently set up shop in Manhattan’s venerable Macy’s basement (occupying 17,000 square feet—1579 square meters—and gaining access to 30,000 customers per day), going head-to-head with New York institutions like Dean & Deluca, Zabar’s, and Balducci’s. Every day, 100 chefs and bakers produce 1800 prepared items sold from 14 stations. The Eatzi’s concept is built around the availability in one place of almost any desired luncheon or dinner item. The Eatzi’s customer saves time and effort in shopping and meal preparation. Commented one New York critic, “Eatzi’s sells convenience, not greatness.”31

Because a shopper’s objective is to obtain desired products, possession convenience is critical. A company can negate the benefits of access and search convenience if it is slow in getting the product into the customer’s hands. Gallery Furniture does more than $100 million in business in a single store because most furniture buyers want their purchases right away; they want instant gratification. Gallery gives it to them. Most furniture retailers don’t carry the inventory or have a sophisticated delivery capability. Gallery Furniture competes on the basis of possession convenience.

Completing or Amending the Purchase

Transaction convenience is the speed and ease with which consumers can effect or amend transactions. Once consumers engage a retailer and select the product(s) they want, they still must participate in a transaction to complete the purchase. They may also seek to amend the transaction following the purchase. Postpurchase transactions usually involve returns triggered by problems with a product or simply a customer’s change of mind. Transaction convenience concerns how quick and easy it is to do business with a firm during or after the purchasing act.

Tokyo’s Robo Shop Super 24, which sells groceries and other consumer goods, is the first store in Japan—and perhaps the world—to be staffed by robots. Customers view the neatly displayed products, order on a keyboard, and pay with cash or a credit card. Robots gather the items in proper bagging order (heavy products on the bottom) and send them down a slide within seconds. Waiting robots, which are arms with baskets, glide up, down, and across, collecting the products as they slide off shelves.

Customers enjoy rapid service and pay the lower prices permitted by a lower cost structure. The ease and simplicity of the shopping experience has been compared to use of a vending machine.32

Executing convenience at a store’s front end is particularly challenging for many retailers. When busy or tired consumers complete their shopping and are ready to pay, they are also ready to leave. Waiting to pay is an unrewarding experience. The Kroger Co. began experimenting with checkout self-scanning in more than 20 of its Louisville, Kentucky–area supermarkets in 1997 and has since added test-stores across the country. Customer feedback indicates that self-scanning is often perceived to be faster than waiting in the express line, regardless of the actual time required to self-scan. Senior citizens—who cite their ability to control the checkout process as the primary advantage of self-scanning —have been among its heavy users. Benefits to Kroger include reduced labor costs and an easing of the acute labor shortage in the 18- to 24-year age group that typically works the front end of the store.33

Well-designed service systems can optimize staffing and expedite checkout. J Sainsbury, the U.K. supermarket operator, uses electronic sensors to track incoming customer traffic and thus prepare for the periodic (and previously unpredictable) surges of shoppers to the checkout. Trader Joe’s, a U.S. chain of miniwarehouse specialty food stores, cross-trains all employees as cashiers. Every “crew member” is authorized to ring a wall-mounted gong to summon more checkout help when customers begin to line up. Target authorizes its cashiers to take the customer’s word, within reason, on the price of an unmarked item to keep the checkout lines moving. Banks, airlines, and the U.S. Postal Service have shifted to single-line service systems, which are faster and reduce customer stress. Supermarkets, however, continue to maintain their slower multiqueue systems—in part because their front ends do not afford the space needed for a single line.34

Transaction convenience is enhanced when customers can conduct business without leaving their cars. Customers at many pharmacy drive-ups can consult with the pharmacist at the window or through closed-circuit television. Drive-through businesses (e.g., dry cleaners, liquor stores) that are common throughout the South are exporting their formats to other U.S. regions, and new drive-through concepts are being tested across the country. Sam and Harry’s, a steak-and-seafood restaurant in Tyson’s Corner, Virginia, opened a drive-through humidor for the “on-the-go cigar lover.” The window is staffed from 11 a.m. to 11 p.m., and customers order from a menu of 40 cigars. (Many call from their car phones to order ahead.)35

Providing transaction convenience has been a challenge for many Internet retailers, who convert less than 2% of site visitors into customers. According to industry executives and analysts, one-half to two-thirds of potential Internet purchases are abandoned by shoppers who are impatient with or wary of the buying process. Many of these would-be shoppers drop out while completing the first page of the billing form. Major contributors to shoppers’ disillusionment include high shipping and handling charges (not disclosed until late in the purchase process) and detailed registration forms (designed to capture marketing information that increases advertising revenue).36

Offering convenience to customers who wish to return or repair a product poses difficulties for Internet and other nonstore retailers. Studies report that many online merchants are weak on postorder follow-through because of inadequate support systems.37 Store retailers that sell online and allow returns of Web-purchased items to their stores (e.g., Macy’s, J.C. Penney Co., Gap) have a competitive edge over their pure Internet competitors.38 Dell Computer leverages its technology to provide online support services that let customers check order status; access system-specific support pages, documentation, and self-diagnostic tools; download file libraries; and order service parts. Dell offers Teletype support services for deaf, hearing-impaired, or speech-impaired customers. The company uses both software and employees to answer most of its 10,000 weekly e-mails within a day of receipt.39

Postpurchase transaction convenience is embedded in the cultures of some retail companies. Apparel retailer Banana Republic’s transaction guarantee conveys its intention that customers be pleased with their purchases: “We want you to love what you ordered. If something isn’t right, let us know.” Unlike some retailers that sell through both stores and catalogs, Banana Republic lets its catalog purchasers return the merchandise to the stores. L.L. Bean Inc., which sells 16,000 products through catalogs, stores, and the Internet, offers customers an unconditional transaction guarantee: “Our products are guaranteed to give 100% satisfaction in every way. Return anything purchased from us at any time if it proves otherwise. We will replace it, refund your purchase price, or credit your credit card. We do not want you to have anything from L.L. Bean that is not completely satisfactory.”

Ease in finalizing or amending a purchase makes a difference. A convenient shopping experience can turn inconvenient if customers are delayed or burdened during or after the actual purchase. Transaction inconvenience can spoil an otherwise satisfactory shopping experience and dissuade a customer from doing business with a retailer in the future.

Questions Every Retailer Should Ask About Its Convenience Strategy »

Crafting an Integrated Strategy

Some retailers are enhancing convenience in innovative ways. Most, however, have much work to do. Rather than pay lip service to convenience, they need to think about it with more precision and rigor. Convenience has different dimensions. Unless managers address each dimension, their convenience strategy will fall short. The first step for retailers is to assess and rate current performance. The checklist provided here contains questions—which incorporate the four forms of convenience, together and individually—that all retailers should ask themselves.

Successful retailers take an integrated view of convenience. No retailer better illustrates the power of an integrated convenience strategy than Dial-A-Mattress International Inc., a New York–based bedding company that sells branded mattresses over the telephone and delivers them at the time and place the customer specifies. Operating since 1976 and expanding into multiple geographic markets through the years, Dial-A-Mattress has a basic strategy of transforming mattress-buying from a slow and difficult process to a fast and easy one. Customers call 1-800-MATTRES (“leave the last ‘s’ off for savings”) day or night, seven days per week (access convenience) and are led through the selection process by a well-trained bedding consultant who is supported by sophisticated information technology (search convenience). The ordered mattress is delivered and installed in the customer’s home during any four-hour window the customer requests, including the same day the mattress is ordered. A two-hour delivery option is also available for an extra charge (possession convenience). Customers who are unsure of which mattress to select can have two mattresses delivered, and the truck will bring back to the warehouse the one the customer rejects. Customers can return their mattress within 30 days if they are not satisfied and receive another mattress or a full refund (transaction convenience). Satisfied customers refer 30% of the firm’s new buyers.

Dial-A-Mattress sells 400 to 500 mattresses on a good day, and has made money every year of its existence in an industry known for cutthroat pricing and marketing tactics. Making mattress-buying fast, easy, and comfortable for consumers drives the company’s success, as founder and owner Napoleon Barragan clearly understands: “Buying a mattress is not a pleasurable experience; it is a chore. If you can make it easy for consumers, if you give them what they want, the way they want it, and when they want it, you can do business.”40

Companies such as Walgreen, Staples, Lids, LensCrafters, Gallery Furniture, Dell Computer, L.L. Bean, and Dial-A-Mattress illustrate the marketing power of saving customers shopping time and energy. Retailers that develop enduring convenience strategies will choreograph access, search, possession, and transaction convenience, seeking to maximize their individual and joint benefits to consumers.

Topics

References

1. Convenience is acknowledged as playing an important role in the retail offer. See, for example: M. Levy and B.A. Weitz, Retailing Management (Chicago: Richard D. Irwin, 1998); and

B. Merrilees and D. Miller, Retailing Management: A Best Practice Approach (Melbourne: RMIT Press, 1996).

2. “The Customer Connection,” Discount Store News, 6 May 1996, p. 62.

3. The framework in this article goes far beyond our earlier effort on this subject. See:

L.L. Berry, K. Seiders, and L.G. Gresham, “For Love and Money: The Common Traits of Successful Retailers,” Organizational Dynamics, volume 25, Autumn 1997, pp. 7–22.

4. R. Abelson, “Part-Time Work for Some Adds Up to Full-Time Job,” New York Times, 2 November 1998; and

D.E. Lewis, “Women’s Gains Tied to Jump in Incomes,” Boston Globe, 17 March 1999, p. A17.

5. L.L. Berry, “Retailers with a Future,” Marketing Management, volume 5, Spring 1996, pp. 39–46.

6. Annual Consumer Pulse Survey Results (New York: Kurt Salmon Associates, 1996).

7. T. Rubel and E. Pollack, “Consumer Products 2005: New World Order,” in Approaching the New Millennium: Retailing on the Horizon (Columbus, Ohio: Management Horizons, Strategic Outlook Conference, 1996), pp. 1–12.

8. “CBS Evening News with Dan Rather,” 8 December 1998.

9. “Precision Shopping,” LDJolt, 16 March 1998, p. 1.

10. “A Matter of Convenience,” Economist, 25 January 1997, p. 60.

11. The airport also contains a casino, the Dutch National Aviation Museum, a sauna, a children’s playroom, a baby room with cradles and playpens, and a prayer room. See:

M. Simons, “An Airport with a Sauna and a Supermarket,” New York Times, 8 August 1997, p. 3.

12. Trends in the United States: 1998 (Washington, D.C.: Food Marketing Institute, 1999).

13. M.L. Kadisson, “New Retail Competencies,” Forrester Research Online Retail Strategies Report, June 1998, pp. 1–16.

14. D. Pence, “Building a Brand at Coldwater Creek” (Dallas: Texas A&M University Center for Retailing Studies, presentation delivered at the Texas A&M University Center for Retailing Studies Symposium, Dallas, Texas, 8 October 1998).

15. L. Napoli, “Staying with the Pitch,” New York Times, 23 February 1998, p. D1.

16. The accessibility of the Internet is frequently cited in discussions of customer convenience. Yet the hoped-for convenience can be elusive. Internet service providers report that the proportion of user connections that fail midtransaction is high (5%) and increases (to 8.5%) during periods of peak traffic (e.g., the Christmas shopping season). An even weightier Internet access issue is the frequent delay of waiting for sites to load. See:

M. Richtel, “Internet Providers Feel the Holiday Crush, Too,” New York Times, 31 December 1998, p. E3.

17. G. Biglaiser and J.W. Friedman, “Middlemen as Guarantors of Quality,” International Journal of Industrial Organization, volume 12, issue 4, 1994, pp. 509–532.

18. Berry et al. (1997).

19. “The Customer Connection,” Discount Store News, 6 May 1996, p. 62.

20. C.J. Cobb and W.D. Hoyer, “Planned versus Unplanned Purchase Behavior,” Journal of Retailing, volume 62, Winter 1986, pp. 384–409.

21. Industry analysts have suggested that America’s low consumption of flowers is related to a lack of shopping convenience. See:

C. Reidy, “An Idea Blossoms,” Boston Globe, 25 December 1998, p. D1.

22. D. Brooks, “Acquired Taste,” The New Yorker, 25 January 1999, p. 36.

23. S.E. Beatty, “Relationship Selling in Retailing,” Arthur Andersen Retailing Issues Letter, volume 5, November 1993 (College Station, Texas: Center for Retailing Studies, Texas A&M University).

24. The popularity of registries has been described as an “understood ethic”: “I’ll make it easier for you to choose and purchase the gift, and you’ll make it easier for me by giving me something I want and won’t need to return.” See:

D.W. Chen, “Wishful Thinkers Are Using Gift Registries for All Occasions,” New York Times, 27 July 1997, p. 10.

25. F. Kaplan, “Tapping the Teen Market,” Boston Globe, 29 December 1998, p. 1.

26. L. Kaufman, “Playing Catch-Up at the On-line Mall,” New York Times, 21 February 1999, p. 3:1.

27. J. Deighton, “The Future of Interactive Marketing,” Harvard Business Review, volume 74, November–December 1996, pp. 4–16.

28. Berry et al. (1997).

29. M.L. Kadisson, “On-line Grocery Exposed,” Forrester Research On-line Retail Strategies Report, August 1998, pp. 1–17.

30. L. Kaufman, “Wal-Mart Casts Eye Northward,” New York Times, 16 February 1999, p. C1.

31. The Eatzi’s concept was developed for Brinker International, a Dallas-based restaurant company. See:

E. Asimov, “But Will It Play in Manhattan,” New York Times, 14 October 1998, p. D6.

32. “Japan’s Robo Shop: No People Problems,” Boston Globe, 4 July 1997, p. A9.

33. Interview with Kroger corporate management personnel, January 12, 1999.

34. R. Gibson, “Merchants Mull the Long and Short of Lines,” Wall Street Journal, 3 September 1998, p. B1.

35. K. Stevens, “Cigars to Go,” New York Times, 22 February 1998, p. 3.

36. B. Tedeschi, “E-Commerce Report,” New York Times, 8 March 1999, p. C4.

37. M.G. Briones, “Customer Service the Key to On-line Relationships,” Marketing News, 23 November 1998, p. 2.

38. L. Kaufman, “Playing Catch-Up at the On-Line Mall,” New York Times, 21 February 1999, p. 3:1; and

M. Krantz, “Click Till You Drop,” Time, 20 July 1998, p. 34.

39. B. Tedeschi, “Click for Customer Service. Then Wish You Hadn’t,” New York Times, 17 January 1999, p. 4; and

Be Direct Dell Home: support.Dell.com (Dell Computer Corporation, 1999).

40. L. Berry, Discovering the Soul of Service—The Nine Drivers of Sustainable Business Success (New York: Free Press, 1999), p. 63.

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Comment (1)
Arjun Malya
It helped me in my own business.This blog contains various aspects of having a successful business for long term including customer convenience, retailers, quality, understanding different strategies.

A big thanx