Shopping by appointment is the next big thing for retailers, but it’s no panacea
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These days, if you are in the market for a new home theater setup or refrigerator and want to ask someone at a Best Buy store for advice, you have to book an appointment.
Best Buy managed to hold on to most of its business at the height of the lockdowns thanks to e-commerce and curbside pickup of online orders. But now as it gingerly reopens its 1,000 U.S. stores, it has turned to appointment-only shopping in blocks of 30 minutes to limit the number of people in stores. Each customer is given a safety briefing by phone beforehand and chaperoned by a Best Buy employee once at the store.
While that might sound a bit high-touch for an electronics retailer and even a bit of a hassle, the complexity and high-ticket prices of much of what Best Buy sells, and the opportunity for upselling, justify the approach, according to the company.
“As customers are coming for this concierge service, they have more time to ask more questions, and our associates are providing more fulsome solutions,” Best Buy CEO Corie Barry recently told reporters.
Pulled between the need to reopen stores and arrest double-digit percentage sales—while wanting shoppers to feel safe during the pandemic—the idea of appointment-based shopping is catching on with retailers: Williams-Sonoma and West Elm now require appointments, while Chico’s has added it as an option. Tapestry’s Coach and Kate Spade are offering the service at a few of their stores, too.
Sales by appointment is not a new concept. Genius Bar consultations at Apple require a reservation, as does setting up a wedding registry at Macy’s or buying an evening gown at Neiman Marcus. But like many changes resulting from the pandemic, it’s something more retailers are trying out. While the labor-intensive way of selling is unlikely to replace just going to the store, it provides shoppers and stores alike more options.
“The retail that is best suited to appointment shopping is either very complex items that require knowledgeable sales people for input or big-ticket items where customers want to feel more comfortable about what they’re buying,” says Shelley Kohan, a professor at Fashion Institute of Technology in New York.
In the case of Chico’s the approach works, Kohan says, because that retailer’s customers are loyal, skew older, and have typically dealt with the same salesperson for years. It wouldn’t work as well, she notes, at Old Navy with its larger choice and frequent employee turnover. At Chico’s, the store gets in touch with the customer beforehand to discuss what she is looking for, and based on that, the retailer gathers multiple outfits for her to try on, with everything set up in a fitting room for her.
That is similar to the concept of Nordstrom’s new Local stores—small locations in neighborhoods far from its main stores in key markets like Los Angeles and New York—which offer tailoring and where customers can request that a few outfits be shipped to try on via appointment.
Even though it dents shopper traffic, appointment-only selling has upsides for retailers. People going to the bother of making an appointment typically have a specific need to fill and are more intent on making a purchase.
“There will be lower volume, but you will have much higher-ticket [spending per trip] and much higher conversions,” says Stacey Widlitz, president of SW Retail Advisors. What’s more, it can lead to lower staffing levels in stores.
Still, there are inherent limitations to how widely appointment-only shopping will be adapted after lockdowns have eased. After all, it is by design a way to reduce the number of visitors to a store, a challenge to a business model predicated on volume and fast turnover, especially for larger spaces.
Williams-Sonoma CEO Laura Alber recently acknowledged this in an update with investors. “With strict social distancing measures in place, customer limits will continue to constrain sales in our stores,” she said. For now the strategy seems more about saving as much business as possible and staying front and center in shoppers’ consideration.
A friction source
Despite its upsides, don’t expect to see appointment shopping at places like Walmart, Target, or Home Depot with their mammoth 100,000-square-foot stores and enormous assortments. “There are too many products for it to be logistically feasible,” says FIT’s Kohan.
Williams-Sonoma stores are not nearly as big, and it doesn’t carry a million kinds of items in all sorts of categories, which helps make the appointment model more viable, according to Alber. “We’re at a different kind of business than other stores where you need a lot more traffic,” she said. Still, she allowed that this model could be painful during a busy period like the holidays if the company still needs to use it by then.
Analysts see appointment shopping as a supplement to a retailer, not something to replace impromptu store visits, once the pandemic is contained, given the need for volume. Indeed, Best Buy’s Barry suggested the practice will continue even after the retailer fully reopens stores.
For appointment shopping to work, a retailer has to be good at e-commerce and have an app with reliable scheduling features. That is the case with Williams-Sonoma, which also owns West Elm and Pottery Barn. It has weathered the store closings better than most: In its most recent quarter, sales were unchanged despite massive store closings, helped by its soaring e-commerce, which last year generated more than half of revenue. Best Buy is also an e-commerce powerhouse.
Yet, however much appointment-based shopping has its attractions, there are built-in impediments that will hinder its adoption.
A lot of shopping is convenience driven and buying things while browsing. Appointment shopping, as pleasant as it could be, is more involved and adds to the work of going to shop if it’s the only option. There is also the matter of not wanting to feel the pressure to buy something if you’ve had an associate spend a lot of time with you. Say you are at Best Buy for that home theater consultation, but after you leave you remember you wanted to get a new camera case. Will you really make another appointment? Or if you are in your car and remember you need some USB cables but don’t feel like booking a time slot, you can just as easily go to Walmart where you can buy groceries, too, and reduce trips to additional stores.
“It’s a friction point,” says Wendy Liebmann, CEO of consulting firm WSL Strategic Retail. “When it’s something that’s basic, that I can order online, I don’t have to touch and feel it. I don’t think people will want to plan that shopping that way.”
Still, it will likely find a niche within new shopping habits post COVID-19, as more shopping goes online, further changing the role of stores. “It’s like the personal shopping experience,” says Liebmann. And the pressure for retailers to improve that shopping experience in stores started well before the pandemic struck.
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