Why Retailers & Brands Need To Reinvest In The In-Store Experience
This article was originally written for CMO where it was published on July 9, 2015.
Perhaps the greatest misunderstanding in the world of retail is that ecommerce has completely destroyed the shopper’s need or desire for brick-and-mortar stores. The fact is, more than 94% of all retail purchases in the U.S. were made in brick-and-mortar last year, and over the next four to five years, brick-and-mortar will maintain a 90+% share of all sales, according to the U.S. Census Bureau.
But why? Why would shoppers continue to visit brick-and-mortar stores when it’s far easier to sit at home and shop? And what are smart retailers and brands doing differently in-store to not only survive an ever-changing and increasingly digital landscape, but actually thrive?
It’s All About Supporting ‘MeCommerce’
Not too long ago brick-and-mortar stores were the only way to shop. The shopper was at the mercy of store hours, inventory, and selection. The primary role of the store was to function as a source for purchasing goods, and the main indicator of a store’s success was revenue.
Today, shoppers can browse and buy wherever and whenever they please—whether that’s in-store, at home, or at a traffic light via their mobile devices. Ultimately, it’s the shopper who controls all the decisions. We call this new reality “mecommerce,” and because of it, the purpose and role of the retail store can no longer be 100% about in-store purchasing.
Understanding The Shopper’s Path To Purchase
So what’s the danger of not adapting store models outside of just purchasing? Some retail markets have already answered that: record stores (which were destroyed by online music sales), bookstores (which are quickly losing ground to online purchasing of printed and electronic books), and consumer electronics (where many products are easily purchased from the lowest-priced provider at the click of a button).
Fortunately, with the shopper’s progression into webrooming and showrooming, many have been quick to recognize and adopt “omnichannel” strategies to connect channels and keep customers shopping. However, the challenge with these strategies for brick-and-mortar is that they still focus on “the buy” as the main shopper activity and ignore the bigger picture: the path that got the shopper there.
All shoppers go through four distinct phases along their path to purchase. First is researching, where they investigate which products and brands best meet their needs. Next is purchasing, where they decide where to shop and what to buy. Third is receiving/picking up the product. And the final phase is using the product, where they either fall in love or suffer buyers’ remorse. In a mecommerce world, retailers and brands need to understand and support all these phases.
Investing In Brick-And-Mortar
So what can a retailer or retail brand do? Where can smart investments be made to ensure that stores are meeting the needs of today’s shoppers and contributing to the overall sales?
During the shopper’s research phase, the store can be a marketing tool and an interface that brings the brand to life for shoppers through unique experiences and value propositions that cannot be replicated online. For example, as shoppers are considering their options, it’s hard for them to see, touch, or test products online, but it can be invaluable, and it’s easy to do in-store.
The store can also be used to educate shoppers on how to best use products through means such as complementary product pairings and expert advice events.
Digital integrations in-store can also be an excellent way to enhance the experience, if done well. And these integrations can be coupled with other technologies, such as analytics sensors to start gaining incredibly specific insights in-store, leading to a greater ability to adapt quickly and offer highly relevant, individualized shopper experiences.
Finally, the standard metrics for store performance need to change. In the past, a store’s success or failure was 100% based on sales. And it was common for a brand to compare in-store sales against online sales. This is nonsensical in a mecommerce world. Retailers and brands need to look at their total sales across all channels and understand the role that each touch point plays in moving a shopper along the path to purchase, across these channels.
Moving forward, it’s critical to understand that physical retail still holds a unique value for shoppers. This is precisely why more and more pure-play etailers, like Bonobos, Birchbox, and Warby Parker, are moving in-store and experiencing tremendous growth. That said, it’s also critical to understand that the role of the store has changed. These brands didn’t just open up stores, they reinvented what it means to be a brand in retail, by focusing on immersive brand experiences in-store and the shopper’s entire path to purchase, both online and offline.
Image Copyright: Elena Elisseeva / 123RF Stock Photo