The store evolution is social before to be technological

David Rivier
Apr 8, 2018 · 5 min read

Although last year’s headlines were all about the “retail-apocalypse”, we can now safely turn the page, and look forward to a new phase: Welcome to the “new normal”! [ #Shoptalk2018 ].

The Grove — Los Angeles

Obviously, anyone reading the specialized press would know that the reality is far more nuanced. On one side, some segments are growing fast, disrupting traditional verticals, seeing digital native retailers moving into the physical world. On the other side, the challenging landscape encountered by more traditional retailers just starting to embrace this period and to establish a new baseline.

In this struggle guided towards a brand story, relevance, and convenience, retailers will have to accept this period of reinvention. The consumer ecosystem is constantly changing and evolving, where no retailer is an island and brand experiences like a living cell have to regenerate, reinvent themselves and adapt to their changing environment. What is working today may not work tomorrow. For those not able to adapt, their fate will be similar to the legions of big-box retailers or services which became obsolete i.e. Toy R Us, Claire’s, Maplin…

Internet counterparts are now impacting store economics. The shopping experience as we know it, is going through a vast disruption encompassing channels, time of purchase, and convenience. A defined trend is the connectivity between online and offline as the purchase experience is being remodelled (almost half (45%) of brick-and-mortar sales start with an online review — Bazarvoice).This is alongside a fragmentation of spending habits between low-income and high-income consumers (58% of low-income consumers are choosing to shop in store, 52% of high-income consumers are choosing to shop online — The great retail bifurcation — Deloitte).

almost half (45%) of brick-and-mortar sales start with an online review — Bazarvoice

This period of radical innovation is nevertheless putting back the focus on the in-store experience and the reality is that the retail industry needs to go back to its roots: built on a genuine brand story, an improved marketing mix, a more personalized and a social experience.

Furthermore, as the industry is refocusing on in-store experience, brands need to engage differently with consumer expectations, which are now tainted by a mesh of online complex hyper-personalized experiences. This new type of interdependent experience between the brands and consumers is happening more sporadically in-store, where a need for a re-awakening of real human-centric businesses is becoming more than necessary. Store associates have always been the first line “of defense” but they need to become the first line of enchantment by delivering great and memorable customer experience! The physical store is becoming the place where retailers need to provide a social and augmented experience based on this new continuum of experience and acquired knowledge.

However, it is all a bit of a moot point, when store employees are increasingly the product of a gig economy which tends to be at time relatively seasonal. As representing the brand and delighting customers is often not the first mission, when you are busy with on-boarding, training, keeping the store tidy and loaded with operational tasks; Products, brand, and customers are being relegated to a lower status. Although, when stores offer employees a more stable scheduling, sales performances increases by 7%, in an industry where company struggles to achieve increases of 1- 2% (When Retail Workers Have Stable Schedules, Sales and Productivity Go up — Harvard business Review March 2018).Retailers need to regain the heart of their store associate as they regain the attention and the wallet of their customers.

Technology is maybe not the de facto panacea, it has been for the last two years the epicenter and revival for the Future Store with a focus on supporting store staff, and delivering a new type of experience. We can observe four key growing trends:

  • New technologies guided toward entertainment and interactivity (Augmented Reality) with experiments such as Ikea Place, Lowe’s allowing users to visualize their new environment or Sephora enabling its customers to see how their products might look like on their face.
  • A stronger focus to leverage time when customers are not in the store. Nordstrom is a great example of this new focus on the acquisition of two start-ups:
  • A better use of data and data integrity to enable more disruptive changes in an industry looking to fully utilize the benefits of AI. With an always increasing interconnectedness between physical and online data, technology such as that IBM Watson, Google DeepMind will help to deliver improved brand consistency, personalization, order management and obviously improved bottom lines. “Big box” retailers are surely most likely to reap the rewards of this more holistic AI approach through their large budget and amount of data available. However, they are still slow to adopt, and we will need to wait for another few years to see this becoming a reality across the industry!
  • Finally, with a focus on operations, the way the store is being managed is also being disrupted through the use of new technology enabling better communication between head offices and their fleet stores, through better accountability and visibility with solutions such as task execution, merchandising, employee management and engagement. By concentrating on the store associates and how the time is being managed, customers become the focus again.

In a changing society, the place of the store is evolving, as retailers are embracing this new wave of technological and societal evolution. The place of the store is being redefined and a more social and human experience will prevail and be augmented by available technologies. It is time for Brands to rethink their corporate strategy, marketing mix and to think harder about how they will get customers through the door. It’s probably time to reaffirm their retail roots. The store is dead — Long live the store! ( MIT Sloan review — March 2018)


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