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A.T. Kearney Study Says Stores are Spending Money on the Wrong Things

Here’s something that hasn’t been said in a while: store associates are often a worthier investment than the newest must-have technology.

That’s according to the latest “Achieving Excellence in Retail Operations” (AERO) study from A.T. Kearney, published Tuesday, which found that while most stores are spending on technology and omnichannel integrations, people are still the best investment.

Not to mention, the study highlighted a misalignment between what consumers expect and what stores are offering, caused by retailers investing in services that customers may not want, need or expect, particularly in terms of fulfillment, in-store technology and social engagement.

“Gone are the days when a store’s success was based solely on the revenue generated within the four walls,” Joe Alden, A.T. Kearney partner and co-author of the study, said. “Retailers need to fundamentally rethink how their associates engage with customers.”

In addition to insight from more than 100 senior retail executives across the Americas, Europe and Asia Pacific, A.T. Kearney surveyed nearly 800 consumers to identify what’s truly important in today’s retail environment.

Notably, as retailers race to offer next-day, same-day or one-hour shipping times, consumers just want to receive their goods by the time they were told they would. In fact, three-quarters of consumers surveyed said they would be just fine with two-day or more shipping.

“The missed opportunity is when a retailer’s offering and the investments needed to produce it are far separated from customer expectations. What consumers value should underpin omnichannel investments in store operations,” another of the study’s authors, Adam Pressman, pointed out.

Another gaffe: social media. While more than 60 percent of retailers continue to focus on mining Instagram, Snapchat, Twitter and Facebook, it’s all in vain as two-thirds of shoppers surveyed said they don’t even engage with retailers on these platforms. And when they do, it’s to get a coupon or discount. Pay for play, basically. Even so, social media still ranked lowest as a touch point, while store location, product selection and store cleanliness took the top spots.

“The AERO findings show that the real heroes of store operations are in-store associates and they are often being overlooked,” Ryan Fisher, co-author and A.T. Kearney principal, added. “Customers say that experience and service have the greatest impact on store productivity, yet we consistently find that store associates get little investment focus.”