Online stores continue to gain market shares, making it crucial for brick and mortar stores to defend their piece of the cake. An exceptional customer experience and store operations excellence are two promising strategies to keep customers coming despite more convenient channels.
This article is about the operational excellence of brick and mortar stores in times of digitalisation, and why technological innovation will not suffice when it comes to providing an outstanding customer experience. (more…)
(last updated in September 2022)
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While luxury brands clearly prioritise growing own and operated retail, successful premium brands (i.e. VF or LEGO) invest in growing both. But professionalising partner retail remains a challenge for many brands.
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Excluding the pandemic, nothing has had a greater influence on the resurgence of ‘the store as destination’ than Gen Z.
While Gen X and Millennials started to shun the mall in droves, it is the so-called ‘selfie-generation’ that is now seeking out new ways to interact with products before they purchase.
Gen Z brains are so used to seeking the Dopamine, Oxytocin, Serotonin and Endorphins (DOSE) release from social engagement and the blitz of constant digital activity on their phones, they crave it in real-world interactions in just the same way.
Now more than ever, this generation is seeking to connect with other humans in physical experiences that constantly engage and excite – and provide multiple photo opportunities to stop, snap and share. We’ve seen competitive socialising come en vogue through the establishment of new mini-golf, darts and bowling venues across city centres and shopping malls, ready to bounce back post-pandemic.
This has, of course, all changed in the past year due to the Covid-19 pandemic but let’s dive into retail pre-pandemic. This frontier of experience and tech in the retail sphere can be segmented into:
- Marketplace relevant experience
- Building loyalty through entertainment
- The rise of showrooming
Marketplace relevant experience
Let’s look at some examples of brands using experience to push the envelope of retail as a destination.
Lululemon Athletica is a retailer experiencing stratospheric growth. The key strategic pillar that differentiates Lululemon is a community-based retail model. The experiential store model is described by CEO McDonald as “the pinnacle expression of our vision” and he went on to say, Lululemon is “an experiential brand that ignites a community of people living the ‘sweat life’.” Stores combine a retail store with a ‘sweat studio’ and a ‘fuel bar’ for healthy refreshments. In addition, the experiential destination store offers guests a chance to try out selected Lululemon gear for classes before they buy.
Ikea, meanwhile, are not content with buying a shopping centre in London to drive a “new future of shopping centre,” but have been working to overhaul their existing experience to create one-of-a-kind events. They’re working on utilising their flat-pack knowledge to build truly affordable housing and announcing plans (at the Vienna store) to create a car-park-free, city centre location terraced with greenery and outside space. Fulfilling the mundane fantasy of many a flat-pack furniture shopper, Ikea set up a Facebook competition pre-pandemic, where 100 winners were invited to spend the night in one of the vast warehouse outlets.
Streetwear brand Vans hardened these credentials by transforming The Old Vic Tunnels in London into a subterranean skatepark. The living embodiment of the brand’s ‘Off The Wall’ strapline, the House of Vans is a place to skate, listen to live music, eat, and shop the Vans lifestyle range while you skate.
Building loyalty through innovation and tech
What about tech in the experience marketplace? Consumers demand more than flashing lights and large TV monitors displaying product images every three seconds. This is no longer acceptable and smacks of an outdated world view created by people who have lost touch with today’s market.
- Tech for tech’s sake is not acceptable.
- Tech without a well thought-out future inbuilt marketing plan is no longer acceptable.
There is more to a destination store than featuring products and establishing a dedicated POS area. Consumers are demanding brands incorporate more texture, colour, spatial design and of course technology into their stores to make them feel more ‘human’. Let’s look at two retailers who have utilised tech to build loyalty.
Health and beauty retailer Boots celebrated their 170 year birthday in 2019 by opening a concept store in Covent Garden. The white marble tiled beauty hall is home to more than 300 brands and has its own YouTube studio and Instagram area where shoppers can film or take pictures with their new purchases. It’s here that brands can begin the playful journey of allowing, encouraging and enticing customers to try products with excitement. To tap into the YouTube demographic by allowing them to create professional videos with products, promoting not only the store but also the brands they stock.
The user as a brand marketer is the new brand marketing frontier.
Of course, none go further or faster than the online behemoth luxury retailer Farfetch, who pushed the envelope with their London store designed to “link the online and offline worlds, using data to enhance the retail experience.” The store is crammed with all manner of tech wizardry. Customers can be recognised as soon as they step foot in the store via an app connected to their online shopping account. This provides assistants with an instant overview of purchasing history and preferences. RFID-enabled clothes rails are able to detect products that interest customers and have them added to their online wish list or allocated to fitting rooms waiting for them to try on. Touch-screen mirrors enable customers to request alternative sizes, as well as pay up before they leave the dressing room. This really is the stuff of the future – noted by brands the world over.
The rise of showrooming
Showrooming and webrooming aren’t new concepts. The terms have been with us since online shopping began to gather pace in the early 2010s.
- Showrooming is when a shopper visits a store to check out a product but then purchases the product online.
- Webrooming is the opposite behaviour to showrooming – consumers research products online before going into the store for a final evaluation and purchase.
Now, retail stores are being transformed into curated spaces where the consumer can escape into the world of the brand. In-house architects at established retailers like JC Penny stress the value of curated space and immersive design. It’s not only about capturing the sale but also the experience of the brand.
Research from Conversant shows that younger generations are more likely to be showrooming. 78% of shoppers under 35 shop both in-store and online at the same time and are 34% more likely than older customers to use their mobile in a store. How are brands adapting? How can physical stores better serve online sales?
Furniture retail mega-brand Made.com has two physical showrooms in very carefully chosen UK locations, London’s Soho and Batley, West Yorkshire. Both in areas with high footfall, these locations offer Made.com’s customers the ability to ‘try before you buy’, leveraging fabric samples and touch screens to explore the full product range. Alongside are display rooms made up of the brand’s furniture.
Another furniture player pushing the envelope of showrooming and tech is Natuzzi who launched a virtual reality shopping experience in 2019. The AR store can be found at its Madison Avenue showroom. Here customers can enter a digital drawing of their home and decorate it with Natuzzi pieces. Using Microsoft’s HoloLens 2 headset, customers can interact with the environment and move and change the colour of furniture pieces before they buy. They even go so far as to allow customers to view a scaled-down hologram of their homes on a tabletop for a birds-eye view of the space. This really is future, now.
The rise of the destination store
Tech and mobile phones have been the driving force even before Covid-19. As the world slowly but surely recovers from the pandemic, physical experience will once again be the driving force in brand engagement – to allow the consumer to connect and be human with them once again. Let’s recover and let the destination store revolution begin!
About the Author:
With an ever-desirable passion for creativity and ability to deliver results, Ales Kernjak has enabled consumer engagement for some of the world’s biggest brands, including Aesop, PUMA and Timberland. With expertise in retail brand identity, Ales engages a wide range of disciplines: retail concept development, design and roll-out, visual merchandising, visual marketing, staff training and retail operational guidance. Read more of his work here, connect with him on LinkedIn.
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