We visited 20 stores to see how many greeted us

The past few years have been particularly turbulent for retail.

First came the pandemic, which started out tough for physical retail but then led to the record year of 2021. Records were broken left and right, and aggressive investments were made in smarter marketing and even better loyalty programmes.

It is easy to believe that the increased sales were driven by all these investments. But the truth is that it was more likely due to money being pumped into the economy to keep it alive. The result was that consumers felt wealthy and spent accordingly.

Now we are here with high inflation, high interest rates, and customers who simply are not coming into stores to shop anymore. Regardless of how much money we continue to spend on smarter marketing and better loyalty programmes.

A full 41% of all bankruptcies in Q1 2023 were in retail.

But is the economy and inflation solely to blame?

Is it only because fewer customers are coming into stores that retail chains are going under?

To find out, we at Evercate conducted a highly scientific experiment.

We walked into 20 stores in Mall of Scandinavia to see how many greeted us.

It was early afternoon and fairly quiet with few other customers, but if all staff were busy with a customer, we waited until they were free and had a fair chance.

How many say hello?

It turned out that in only eight of the 20 stores we entered, we received some form of greeting from someone on the staff. A full 12 out of 20, or 60%, did not even bother with a hello to their potential customers.

Of the stores where we did receive a hello, only half followed up with any kind of question to initiate a dialogue. That means only four out of 20.

Custitude recently released their customer interaction barometer, where they report that a simple hello increases the chance of conversion by a full 6% (from 59% to 65%).

The majority of these stores therefore have millions to gain each year just by saying hello to their customers. Not to mention what there is to gain from taking a more active role in the customer interaction. Helping and guiding the customer delivers an additional 23% increase in conversion, up to 88%.

Take a minute and consider what a 29% increase in conversion, with your average transaction value, would mean for your profitability.

Stores must get better at customer interaction

The macroeconomic situation certainly makes things tougher for everyone, not least for stores. But there is a much bigger problem that we are not talking about.

That problem is that we have forgotten what retail sales is all about. It is about selling to the customers who come into the store. It is about the human interaction. It is about saying hello and helping customers find what they are looking for. And it is about giving customers something that at least resembles an experience.

This is where we have the strength of physical retail!

It is time to take a step back from all the fancy new systems and marketing services and get back to basics.

It is time to invest in the customer interaction.

Make customer interactions great again!

You know that customer interactions matter. Everyone knows it, but few work on it actively.

Saying it at the next conference might lead to staff greeting customers for a week or so. But then you are back to square one again.

What on the surface seems so simple -- getting everyone to say hello -- is really a question of replacing an ingrained behaviour pattern with something new. That is the nut you need to crack.

It is important to point out here that this is not the store staff's fault. Of course they have a certain responsibility for how they act, but it is fundamentally a management issue. It is a systemic problem that requires a systemic solution.

The solution is change management

Change takes time, and change is hard. But it is also worth the effort -- up to a 29% increase in conversion rate's worth, to be precise.

It is not enough to mention it at the next conference. It is not enough to send an email to the store inbox, update the employee handbook, or delegate to the store manager and then check it off the to-do list.

To succeed, we need to work continuously from all angles (centrally, regionally, at the store level). We need to work systematically and take one step at a time. We need to follow up to make sure we are on the right track and that everyone is consistently doing the right things.

It requires engaging and working with every individual (including part-time staff) in every store to sort this out.