Over the past year, we’ve witnessed a significant shift on the high street – a wave of store closures and digital-natives buying up beloved high street names without the store infrastructure. However, as restrictions relax, shoppers emerged from isolation, flocking back into brick-and-mortar stores. Months of pent-up demand for an instore experience led to a burst of activity in shops across all categories. But will it continue now more shoppers have sampled the convenience of shopping almost entirely online? What will stores need to look like to attract the shopper of the future, and what crucial infrastructure will retailers need to have in place to support that?
There are two main areas in which stores can bring value into the shopping experience that cannot be delivered by online: Experience and Convenience.
It can be argued that shopping online is the most convenient way of shopping, and, in many situations, it is, but there are ways that stores can enhance the overall convenience for customers in ways that online will never realistically be able to match. Under the right conditions, stores will always be able to provide something that online practically cannot: immediacy and simplicity. There will always be a lag – whether 1 hour, 1 day or 1 week, between ordering online and receiving a product. A lag that does not exist in a store – stock problems aside. If you need that crucial ingredient for a lunchtime recipe, or an outfit for a date that night, online is unlikely to be the answer. Equally, if you want to return or exchange something it is often a lot easier to visit the store rather than find a way to send it back. So, in the foreseeable future, stores will continue to be a vital part of what it means as a retailer to be convenient.
It sounds simple, but to deliver on that convenience promise retailers must continue to invest in their infrastructure, both physical and digital.
Location, location, location
Convenience depends on access to the physical property, so number and location of stores is a vital consideration. Physical location is often a key decision factor in whether shoppers visit a specific brand, or shopping mall.
Single view of inventory
Many of the convenience aspects desired by shoppers revolve around knowing they’ll be able to fill that immediacy ‘craving’, so having a view of inventory across all channels is critical to retailers being able to meet their needs.
Alternate POS solutions
The rise of digital fundamentally changed consumers’ habits, and their expectations around being able to do something fast and efficiently have increased exponentially. Legacy point of sale solutions that make returns slow and require people to find the counter and queue are increasingly becoming barriers to that speed shoppers want, as well as detracting from the experience. Providing customers with mobile checkout, either from their phones or with mobile store associates, or more progressively, ambient intelligence solutions (think “Amazon Go”) are becoming increasingly critical.
Reverse logistics and flexible management of inventory
Having the right stock in the right location is essential to meeting customers’ expectations. There’s nothing worse than having a customer specifically come to the store for an immediate need, and the retailer being unable to fulfil it. To mitigate for that, combined with the single view of inventory, retailers need to have a dynamic supply chain that allows them to move surplus inventory to places of scarcity quickly and dynamically. This is even more critical for digital supply chains, where returns are high and can quickly either overload or fill gaps in inventory in specific locations if done incorrectly (not to mention incremental cost of getting it wrong).
The other reason that stores will always be key to the shopping journey is Experience. This ranges from the mundane (being able to touch and feel the item) to the esoteric (experiential destination stores), and everything in between. People love to touch the product, try it on and feel the quality of what they are buying – all things you can’t do with online shopping. Equally, today’s digitally savvy customers crave experiences as much as the product itself. Shoppers also want to be known, and they want the experience and support they get to be tailored to them. Delivering experiences that shoppers want is as much art as it is science as those experiences need to balance convenience – removing barriers to get them to buy and not just look – with branding and marketing, connecting them more closely with the retailer for the long term. In the future, retailers need to consider every way in which to enhance the physical shopping experience in store and differentiate it from the experience of shopping online.
While much of Experience has to do with clear identification of store purpose, design, and merchandising strategy, there are several capabilities that retailers need to think about to ensure they can flexibly deliver those experiences to their customers including:
- Alternate POS – already mentioned as an enabler of convenience, this technology can also significantly enhance the experience of the customer while they are in store and allows the retailer more flexibility with store layout
- Order from store – this serves two purposes: ensuring that a retailer can fulfil the customers’ needs while not keeping every permutation of range, colour and size in stock (endless aisle) and a more recent expectation, allowing customers to not carry their purchases on extended shopping trips.
- In store experience technologies – Technologies that use digital, and most often the mobile device, to enhance the overall physical experience such as alternate POS, Augmented Reality, RFID, QR codes, 3D printing and many others will prevail. Constantly evolving, the individual technologies are less important – the key is building an infrastructure that allows you to enable and blend these technologies through a connected infrastructure to deliver real value for customers.
- Data, including true value of customer – the ability to use data to better service customers and your business is becoming increasingly critical. Whilst data is a broad topic, specific to the store experience, it’s about using data to maximise the experience of the customer through personalisation, using techniques such as employee awareness of customer preferences and history, personalised promotions, and discounts and services for genuinely high value customers. Getting to a true understanding of customer profitability, across all channels is also becoming increasingly important in better decision making (e.g., free shipping to home for loyal customers with minimal returns).
The role of the store in the end-to-end customer experience will continue to evolve and retailers must continue to change to determine the best way to service those customers while maximising profits. Focusing on the aspects of convenience that only physical retail can bring, and the Experience only the physical world can provide is the key for retailers as they struggle to meet evolving consumer demand.
Guy Elliott, Senior Vice President, Retail, Publicis Sapient