How to remain relevant if stores have played out their role in the
retail customer experience?
Is Physical Retail Dead?
The numbers have sent a clear message to retailers in the physical space
with footfall down between 10-20%, and eCommerce increasing with 20-30%
depending on sector – meaning that the non-store retailers share of total
sales are now above 20% in most sectors. And on top of that smart phone
shopping is +50% and increasing.
Have the Alibaba’s and Amazon’s won the war and left physical retail
outside the scope of distribution of products? If the answer is yes, then what
is in fact the role, if any, for the physical store?
As Lee Peterson, WD partners has stated over the last 5 years
“People don’t have to go to store anymore, they have to want to go to
stores”
– meaning that stores need to add something to the brand and customer
experience to stay relevant.
So we need to design the future of retail, where bricks will be about
experiencing brands and vs.simply purchasing goods as in the past. As
your on-line sales grow, consider the physical role of your brand to be the
place where the customer can sense what you are all about.
How to draw the consumer to physical spaces in the digital age?
At Implement Consulting Group, we believe it starts with understanding each
of the potential touchpoints in the customer journey across channels,
and understanding where the physical channel is important to keep shoppers on
the path to purchase by enriching the customer experience with either:
- Inspiration, touch & feel and trial opportunities, or
- The need for instant fulfilment, or
- As a service point for click & collect, BOPIS or managing returns or
- Consider a form of food & beverage
The physical retail customer journey starts online and more than
50% of the shoppers today (global average) do online research before buying
in-store. Meaning that the first touchpoints with half of the retail
customers occur online. So to drive traffic to stores and to win in physical
retail, online retail channels must deliver on superior customer touchpoints.
However, we also know that more than 50% of online customers turn to
physical channels before making their purchase. Meaning that all the
online and SOME efforts can be wasted and the customer lost to competition, if
we as a brand where not able to cater to the physical needs of the shopper.
The first conclusion being that knowing who your customers are is
key in an integrated retail world where physical and online retail channel
integration is a prerequisite to meet customer expectations - More
than half of the new ‘digital’ customer segment require a seamless
cross-channel experience, where they are able to start and end in any channel
of their choice. Moreover, more than half in both the physical and online
channels want personalization and a shopping experience which is relevant to
the consumer.
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| Fleamarked Svingelport |
The second conclusion being that we need physical stores - however
the role is changing and the format it used to be needs to change. Retailers
will need to carefully plan their store footprint to remain close to their
customers, but need to think much more about the role of the stores and
develop stronger and modular concepts for:
- Pop-up stores to stay close to customers – to move
the value closer to the customer and stay more agile and mobile, where the
full year business case is too weak
- Showroom stores to build brand awareness, but at the
same time reduce the amount of m2 needed.
- Experience stores to allow shoppers and consumers to
connect with the brand and create conversations about the products
- Fulfillment stores to bring distribution closer to the
consumer and provide instant delivery where and if needed, as well as
being a service center for click’n’collect and BOPIS to drive down
costs
- Social playgrounds where the natural flow and traffic
of your consumers will bring visits more often – with integration of
quality food halls and caffees, space for in-door activities and
co-working spaces and dialogue
- Food & Beverage has now come in to play as a draw,
especially for younger consumers. The idea of having lunch and
browsing brands is starting to mean more than the actual act of buying
The role of the store can then be one or more of the above and the customer
experience and role within the touch-points needs to be carefully planned to
deliver commercial impact and the supply chain need to be designed in a way to
make products available across stores at the right time and place.
However, making the point about relevance of the physical touch-points need
to be seen in connection with the need to offer an omni-commerce experience. A
few facts to support this:
- Companies with omni-channel customer engagement strategies retain
on average 89% of their customers, compared to 33%
for companies with weak omni-channel engagement…
- +50% of population who did research online before buying in-store
….
- +70% of digital shoppers consider in-store experience as the most
important channel when making a purchase and…
- +50% Growth in on-line sales when a physical store opens
- +70% of online shoppers who have used buy online, pick-up in store
services.
- +60% of customers expect to receive a seamless customer service
regardless of which channel they are using
Call for action in retail
If you are closing stores or are unsure if you should open new stores, you
need to consider your full store footprint and formats, which will enable you
to remain close and relevant
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| Place du Tertre ét Svingelport du Paris |
If you do not bring a closeness (as part of a great customer experience)
into your customers everyday path of living and movements, your customers are
leaving your stores to go somewhere else - therefore
- Make bricks retail about experiencing brands
- Make bricks retail be the place where the customer can sense what you
are all about.
- Make bricks retail a core part of the customer journey
- Make bricks retail the reason why customers also shop your brands in
other channels
“We need to change the way we think about what our
consumers and shoppers want from the physical retail experience and design
the physical foot-print to keep customers on the path to purchase towards
our brand”
This is one of many interesting topics