7 Things to Expect from the Store-of-Tomorrow
Saks is killing the department store…
Amazon is opening 100 pop-ups…
Apple is building community centers…
Bonobos and others continue to open inventory-less shops…
Everyone’s got an opinion on the store of 20… 30… 50 years, but the reality is, the store-of-the-future is being built right now. Wearables, AR/VR, Amazon, more are changing retail as we speak. So in these uncertain times of constant innovation, what should you be focusing on?
Here are 7 things to expect from the store-of-tomorrow:
- Actionable Yearly/Quarterly Daily Shopper Insights
According to Gartner, by 2017 most companies will have moved from annual or quarterly research and analysis to daily insights to meet the needs of their consumers. Yesterday’s research and insight gathering processes on shoppers (industry reports, quarterly focus groups, shopper intercepts, etc.), are no longer sufficient for capturing today’s ever-changing and complex shopper.
Shoppers now have over 800 possible paths to purchase (Cisco). And, as we continue moving towards a connected world and models like subscription/automated purchasing, spending billions to remind consumers to buy your brand or stop in your store will be inordinately wasteful. It is becoming increasingly imperative that retailers not only gather daily shoppers insights, but start making it actionable as well.
With solutions like in-store analytics coupled with online analytics, brands and retailers can start putting together full profiles of their specific shoppers in real-time. Obviously, the goal is the more you know about your shopper, the more likely you will be to cater your customer experiences and marketing to them successfully. So many companies—most actually that I’ve spoken with—still have an inside out thought process. They all get around a table and decide how they are going to go after shoppers. Wait… but, what about the shopper? Forcing what you think is critical to sales will continue working less and less.
- Connected Store Inventory
Already more than 80% of U.S. shoppers want the ability to check for nearby product availability, according to PixelMEDIA. What’s more, Google found that one in four shoppers avoid stores because they don’t know if a product is in stock. So when a shopper goes to a store expecting to pick up a product and it is out of stock, the result is anything less than positive. Do you have ways for shoppers to see if a product is in stock before they head out to your store? Does your website and /or mobile app enable shoppers to search to see what stores have what product in? If not, this is something you need to correct immediately.
- More Community, Less CommerceIn recent years, locally-owned businesses have been on the rise. Family-owned restaurants are popping up everywhere. The number of Farmer’s Markets in the United States has more than doubled over the last 10 years. And, locally brewed craft beers breached double-digit market share recently, with more small and independent breweries than ever before. Why? For the same reason Apple just unveiled the first of its newest locations set up to function more as community gathering places than commerce centers, Target is opening over 100 flex-format stores in urban neighborhoods and now convenience stores are the fastest-growing retailers. What started as a move to smaller format stores, due to slowing foot traffic and an increasingly busy consumer, is evolving into convenient, neighborhood stops with curated, localized experiences first and products second to continue satisfying changing shopper preferences. A recent Edelman study found that already 40% of millennials prefer to shop locally, even knowing that they’ll have to pay a little more for their goods.
- Internet-Proof Experiences
This next point goes hand-in-hand with my previous point. We all know that the majority (91%) of retail sales still happen in the brick-and-mortar store. People of all ages prefer to shop in-store for many things. They like the tactical experience and often need to see, touch and better understand the product before purchasing. With that in mind, retailers and brands alike need to emphasize experiences for the shopper that they can’t get online. Just having a physical item immediately available might not be enough. Allowing the shopper to engage with the brand, see their personality come to life and test out, try on or demo the product—enabling them to pick up and see the weight, feel the finish, etc. of the product—is critical. That’s precisely why we’re seeing more and more online pure-plays—from Warby Parker to Amazon—moving in-store. Additionally, the more brick-and-mortar can provide additional value, entertainment and unique destination-type experiences, the more apt shoppers will be to go in the store.
- Unexpected Partnerships
Not too long ago Target announced plans to sell its 1,700 in-store pharmacy locations to CVS. Sears has rented out parts of its stores to everyone from Whole Foods Market to Dick’s Sporting Goods. JCPenney shelters many Sephora store-in-stores. Staples is collaborating with office-sharing startup Workbar to carve out some of its store space for open communal workspace. And, last year retail giants like AT&T, Exxon, Macy’s, Mobil, Nationwide, and Rite Aid all agreed to partner on the rewards program, Plenti, which lets shoppers earn points in one place and use them at another. Moving forward, smart, unexpected partnerships like these will continue to make better use of today’s over-stored retail environment and help drive mutually beneficial foot traffic.
- PersonalizationWe know from marketing online, the more personalized or relevant the content is to an individual, the more interaction or engagement that person will have with the brand. The same holds true in brick-and-mortar. Retail technology is now enabling retailers and brands to move beyond mass marketing and bring this kind of personalization in-store. Obviously, you have the option of beacons to deliver messages to shopper smartphones, assuming they have Bluetooth turned on and your mobile app installed. But, what about the other 70+% of shoppers?
There are now actually a few different levels of possibility here. Retailers/brands can first start segmenting messaging by specific demographics, for instance by age or gender. With a content management system, you can remotely deliver content on digital screens anywhere in the world instantaneously based on different times of days, locations and/or these demographics. Now, the question is, yes you can gauge shopper engagement if you’ve got some sort of interactive digital display, but what if they aren’t interacting? Or, what if you don’t have something interactive? How can you figure out of all shoppers that walk by the category, merchandising, display or brand, what messages get which shoppers to look, stop and engage? How do you determine the best hour of the day and day of the week, location, department, etc. to send specific content and determine the demographic make up of your shoppers? After all, that is what’s most important here to maximize your ROI and sales, isn’t it? New in-store analytics technologies will give brands and retails those answers at minimal cost and start driving quick changes in-store.
Tip: A good way to implement this is to start by testing a representative sample with your in-store digital content, using in-store analytics to optimize your content personalization and delivery times, then scaling the rest of your stores/displays with the messaging/images that have proven to work.
- Self-Directed ShoppingMany shoppers are now used to the “self-service” experience they get online, and now for a couple of reasons that shopping mentality is extending to in-store experiences. One, shoppers are used to leading their own journeys and often prefer not to engage with an associate. And more to the point, associates are often hard to find or ill-equipped to answer questions. Second, shoppers in general are more educated before entering the store. Already 46% of shoppers believe that they usually know more than the sales associate (InReality). And, according to Google, some 82% of shoppers say they consult their phones on purchases they’re about to make in a store (Google). Technologies like digital kiosks, chatbots and robot assistants are also being used to handle customer service issues and distill needed information.
So, where does that leave the assisted sale and what do shoppers need from sales associates? The reality is that the traditional sales process is changing in-store. It’s now critical that brands and retailers focus on optimizing mobile with the value and information shoppers seek, while also figuring out what additional self-help technologies might complement the in-store experience and what skills/knowledge/tools sales associates should have. Should these associates be consultants, i.e. restoration hardware that help with interior design discussions? And, given all these different resources (mobile, retail technology, staff), what’s the best way to give shoppers what they want and move them from intent to purchase? These are the kinds of questions that it’s time we started asking.
What are you focused on right now? What will your store-of-tomorrow look like?
Image Copyright: baona / iStock