When we think of the retail landscape today, images of digital disruption immediately spring to mind – technologies and innovations that are fundamentally shifting how we interact with retail brands. Most of this tech is focused on transactions – enabling consumers to adopt more convenient and efficient on-the-go, out-of-store options like online and mobile shopping, autoship options for regular purchases and order pickup to reduce time in the store, just to name a few. If we were to look only at how e-commerce is disrupting brick-and-mortar, the prognosis would look dire for retail brands, as store closures continue unabated in 2018 and e-commerce continues to increase its bite out of in-person sales.
If the trend were merely going in one direction – online – it’s nearly impossible to explain why online brands like Warby Parker, Amazon, ModCloth, Bonobos, Fabletics, and even Zappos are choosing to open physical outposts in this environment. As we addressed in The Race for In-Person Experiences, foot traffic remains the primary driver of retail sales with upwards of 90% of sales taking place in stores. So, the retail channel cannot simply be abandoned for an app, but does the retail channel persist because people enjoy going into stores to make purchases? According to retail experience design experts, “It’s complicated.”
Gina Bleedorn, Chief Experience Officer at Adrenaline, says, “Yes, people will automate in a snap if they can. But it’s what they choose to automate that really makes it interesting. For things we have to do and don’t get much enjoyment out of, we’re looking for a way to reduce the pain. Groceries, everyday clothing items, drugstore purchases – automate, automate, automate. But I would never want to automate something I enjoy and have to be in-person to experience, like a massage, right? So that’s really where retail brands have the potential to reinvent the shopping experience if they embrace services that consumers want to come in and experience.”
As big box and department stores shutter, online-only brands are opening more curated retail brick-and-mortar stores. So, it’s probably less about the physical store and more about what was going on inside the doors that’s the main driver of clicks to bricks. Big box and department stores are known for their somewhat impersonal shopping experiences. For online brands opening physical outposts, the exact opposite is the case. These brands that create curated, personalized shopping experiences are finding a way to extend their brand presence by driving in-person service retail. One look at the online brands opening retail stores and you’ll find 1) most of them already have a service-oriented reputation and 2) their new stores have a very tightly focused service-oriented purpose.
For brands opening retail stores, they see an opportunity to provide something that isn’t present in the e-commerce environment alone or is there, but can be successfully extended into the physical store. Warby Parker, for example, has friendly agents who really are experts at what glasses will fit and flatter your face, and consumers in the market for glasses really do want to try them on, so there is a natural match-up. Sure, online Warby Parker will send you five pairs and you return all but the one perfect pair, so there is a convenience level to online making it as easy as possible. But there is something to be said about interacting with an expert who is providing personalized service and advice specifically for you.
Just because you’re big doesn’t mean you can’t do service right. One online giant is experimenting across numerous physical channels. Amazon is opening book stores because they realize people like to flip through books and get advice from book lovers like them. The online behemoth is also partnering with Whole Foods for discounts and delivery through their ubiquitous Prime service to create a holistic food service model. Just because we’re in a hurry, doesn’t mean we’re not healthy. Amazon Go is reinventing the “grab and go” quick service model by literally allowing people to walk out with their purchase – great foodie options, no cashier, no waiting. The brand is also experimenting with Pop-Ups.
According to Gina Bleedorn, “It’s not just about modernizing the store environment, as some retail experts would tell you. It’s really more about understanding and defining a compelling purpose for the physical store beyond selling products. It’s taking what you already do well from a service perspective and finding a way to make that in-person experience something so compelling consumers will get in their car and drive to you to get it. Sometimes it may be digital – like AR or VR (augmented or virtual reality) but sometimes it’s much simpler than that. I think back to department store makeovers. It was always more about service than the makeup. It made you feel seen and special, and who doesn’t want that?”
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