Meanwhile, retailers who used to operate purely online are now opening physical stores and winning even more market share. Frank And Oak, Indochino, Warby Parker, and many other e-commerce brands are opening brick and mortar retail spaces. Amazon now has pop-up shops in 16 American states, opened its first grocery store in Seattle last November, and with the recent acquisition of Whole Foods, is clearly betting that brick and mortar isn’t going away anytime soon.
What is going on here?
In a world where our physical lives are so closely bound to our digital existence, one-click-away shopping has become natural and even expected from retailers, killing off pure brick and mortar players and driving the rise of online shopping. But, no matter how fast technology speeds up the pace of life, customers still yearn to feel a tangible connection with the brands they buy. This is where purely online retail businesses fall short. Brick and mortar spaces create the emotional attachment and connection that we all want. Store experiences that stimulate all five senses, engage, educate and entertain customers, as well as leverage cutting- edge technology create strong brand loyalty. Until in-home scent synthesizers, haptic pads, 3D printers and other new technologies become widespread, brands are still dependent on physical space to create a full, compelling shopping experience. While it is true that sales are moving online, retail brands are still built offline.
Thus, while our physical and virtual worlds continue to merge, the winning retailers are the ones who understand how to strike a balance between the online and in-store experiences. Just as movie theater chains had to innovate in the face of streaming services, and have built themselves into real destinations, retailers must accept that their physical stores will have a different role to play in the shopping experience going forward. Stores will have to become communities where you can connect with a brand, reaffirm your identity, and build relationships with other members of your retail tribe.
How can retailers thrive in the face of disruption?
The secret to survival is integration. Websites and stores must be combined in a such a way that friction in each service model is eliminated.
On the one hand, stores need to be designed like apps - easy to navigate, convenient, informative, and fast. Checkouts should be designed to be as effortless as clicking a button. Searching for items should be as easy as entering keywords. A customer should be able to have a tailored experience, like a website suggesting similar items.
On the other hand, a brand’s online experience must integrate as many in-store shopping practices as possible. Walmart and Amazon’s automated pickups, virtual try-ons offered by retailers like Ray-Ban, or even Amazon Prime’s Wardrobe that lets you try on clothes you order before paying, are solutions that successfully mirror the benefits of in-store shopping.
thredUp, an American online consignment and thrift store exemplifies this model fusion. The online shop plans to send customers mobile notifications when their preferred brands, styles and products in their size appear in-store in one of their recently launched locations. Sales associates can also prepare a dressing room based on customers’ online shopping history.
The more important change
The truth is, all of these “quick fixes” are fairly easy. The tricky part is the shift in mindset that’s required. As a brick and mortar retailer, you can no longer afford to bury your head in the sand and hope that the online revolution passes you by. It’s also not enough to just adopt simple strategies, like following the ‘flavor of the month’, or buying and implementing new technology. Instead, you need to go back to what made you great in the first place - a deep understanding of what your customers want and need. There is a technological aspect to doing this right – data analytics, online and offline user interface improvements, etc. – but the talent and culture to support innovation is much more important. You need people who deeply understand your clients and are willing to experiment by creating environments where they put themselves in the customer’s shoes with ease. With this, your brick and mortar stores can become destinations - places where the people that identify with your brand can connect to it and to themselves.
Online shopping is replacing other forms of entertainment, not just other ways of buying. As such, you need to supplement it with an in-person experience that draws people in and makes them feel like they belong. Examples include places like IKEA as a family destination, or Sephora which has evolved into a key stage in the process of feeling beautiful.
In short, what this requires is strategic thinking, innovative processes and tools and, most importantly, the cultural openness to a new way of doing business as retailers. As with other industries, innovating in retail will require taking a step back and rethinking products and experiences fully, while taking past models out of the equation. Stores used to be places where you go to shop, now they will be places where you can go to feel like you belong. Yes, the future is digital but the human community aspect is what will keep people coming to you.
Carole Teitelbaum is a retail consultant with 25 years of experience in Canada and the United States. Mike is the founder of Juniper – a boutique consulting firm. Jade Vaillancourt is a consultant at Juniper.