The retail industry is at the tipping point where brands are drastically rethinking the purpose of the store in the consumer’s shopping experience. Just making incremental adjustments and altering the portfolio is not sufficient anymore to thrive.
Birth of the connected consumer
Today, it is imperative for the retail industry to have an understanding of changing consumption patterns and consumer expectations. As they become more connected through portable devices, they feel that they are in control of technology and expect that all retail brands enable its use. This means that consumers can take charge of their shopping experiences and leverage multiple online and offline channels to optimize their overall participation. Moreover, the United States retail market found that when data was sliced between the millennials and the baby boomers, online retailers had a huge edge with the millennial generation who ranked aspects like unlimited options and online customer feedback as their top two shopping criteria, wherein the lucrative aspect of traditional stores — the instant ownership factor — came third.
Use of connectivity notwithstanding, market analysts believe that adopting the traditional brick-and-mortar models to an ecommerce site will not appeal to modern shoppers more. The instant-ownership factor in an offline store is still the most appealing attribute, which means no matter how well-stocked the online portal, traditional stores will always win. Moreover, the sensory experience in these stores as well as exclusive products and bargains are the other factors that will keep these traditional stores ticking no matter what.
With shopping still considered a social event, the question remains when the product inventory available in the store will be just enough to satisfy the customers. To cite an instance, deodorant market research found that only 28% of consumers wanted to see actual products in-store and a meager 9% wanted to see the entire range. It was eventually found that the customers were more than willing to trade up the immediate satisfaction of buying the product from the store only when the online portals delivered the product on the same day or next day. To conclude, all brick-and-mortar stores will become one-stop shops aimed to provide a unique brand experience which meant that the role of the dealer will change from being an information source to being a product experience provider, who will have even the power of delivering your dream car over lunchtime.
This means that the futuristic stores now should be developed in a way to strike a balance between inspirational and emotional engagement, which will offer a new and unique experience to the end-user across all channels in a consistent manner. To cite an instance, research of the automotive sector revealed that 5% of all cars would be sold online by 2020. Furthermore, even the automotive infotainment market found that the urban stores would be quite different and unique in their set-up and use of technology, allowing the tech savvy driver to be connected and socially integrated, taking the experience to a whole new level. A company like Tesco has already launched subway stores where commuters can order groceries from their wall.
Technology: Enabling a better store experience
Despite the advancements made in this arena, and the facilities offered, the traditional retail shops never lost its original value, because even when customers placed their order digitally, they always wanted to touch and feel the products. However, integrating these digital advancements ensured that the store faced no space constraints, and they could now take advantage and offer products after considering their associated costs and its consequent impact on the consumer experience. Burberry, for example, turned their Regent Street, London, store into an entertainment destination where customers were engaged through an audiovisual experience granted through iPads and big screens. From this, it was inferred that for the perfect futuristic store, the retailers needed to track their customers’ reviews, develop a pool of data so that they could provide personalized targeting for future visits, allow shoppers to conduct personal activities, and deploy Wi-Fi tablets that acted as an interactive catalogue and order systems — thereby give the customers a uniquely personalized experience.
With the changing and challenging backdrop, retailers needed to radically rethink their stores. Customers no longer behave and interact with the traditional store as the sole point of contact. A simple shampoo market research, for instance, revealed that customers utilized the available technology, reviewed the product and then bought it online or offline depending on the available touch-points for the product. From this, it can be safely concluded that these trends and dynamics are making fundamental transformation to the traditional ‘store’ as we know it. However, the good news for the retailers is that there is still place to develop winning propositions. Only the key players who recognize this and respond to these changing consumer patterns will emerge as significant players in the highly fragmented industry.