Retail is in the midst of a stressful transformation that’s producing plenty of collateral damage. As customers’ shopping habits evolve and brands rush to meet them, the end-game for physical stores is taking shape. Stores have suffered — there’s no need to belabor the point. Declines in foot traffic and the convenience of e-commerce have taken their toll. But many of the best advances come from times of great stress and brands are learning to adapt to the new normal.
One major change is that some brands are adjusting their physical presences to match new customers. They’re revamping and often downsizing their footprints while making their remaining locations flexible, potent powerhouses of agile logistics and satellite warehouses. They’re reshaping the way we think about the store walkthrough with inspirational experiences, and they’re morphing the associates’ roles in stores, giving them increased onus and power to provide attentive service and guidance.
But what other changes are necessary for longevity in today’s retail environment? Let’s take a look.
Ship-to-Store? How About Ship-from-Store?
Omnichannel has opened up many new doors for retailers to increase their agility to hit high shipping expectations. While ship-to-store is an added benefit for customers, the real opportunity arises when we consider ship-from-store opportunities. Retailers can leverage store inventory to ship from satellite locations to get products to customers quickly without increasing cost. Every major retailer could have Amazon’s breadth of satellite distribution centers while also providing the opportunity to let customers shop in the same location.
As with any major retail initiative, it takes investment—in this instance, in inventory management and most likely machine learning or artificial intelligence to streamline and predict inventory needs across the network. Nonetheless, Amazon, Wal-Mart and other major retailers already have similar networks, so if brand names hope to compete, doubling down on stores will give them the flexibility they need without the overhead of building entire distribution networks.
Many retailers might think the complexities associated with SKU tracking, agility and inventory distribution are too much to overcome. But there’s already a vertical utilizing its store locations to ship thousands of SKU’s to their local customers and they’ve proven it can be not only successful, but also a serious value proposition for customers. Grocery chain – Kroger, Whole Foods, Giant Eagle and more across the country — are no longer competing for product quality, they’re competing for service and convenience. The frontline of that competition is grocery delivery.
The grocery delivery space is also already tracking and shipping astronomically more SKU numbers than almost all retailers, and it’s building a new model of grocery shopping tailored to customers who don’t want the hassle of going into the stores. Sound familiar? It can be implemented, it can be successful and it can help brands win over their competition.
Expertise as a Service
Brands are finally catching on to the idea that massive stores with thousands of different products don’t comprise a model that works well for service. As even more brands begin to move into direct-to-consumer and open up stand-alone stores, the unique value they can provide based on their product expertise delivers options and incentives for customers, which has proven that service is paramount when customers find their way in stores these days.
The fact is, if any one of us wanted to buy a product in which we felt truly confident, our first stop would be to look online to save time and prevent any hassle with long lines, parking, finding the product and other tedious problems that are decreasing foot traffic. Yet there’s a strong correlation between what people shop and where they shop. In other words, for many product types—especially products of higher quality or higher technical knowledge—many customers need more information. Whether it’s fashion, tailoring or technical understanding, many of today’s in-store customers are looking for additional guidance.
Bonobos realizes that many customers want to understand more about fit, tailoring and fashion, so they’ve opened up showrooms across the country. Warby Parker has taken a similar approach with its store experience, and together those two brands developed a blueprint for online-only brands to establish a store footprint.
Many brands will shrug off the idea of a showroom as a waste of investment and an inability to capitalize on their current store infrastructures. That can be true, but who said stores need to be a showroom to provide that kind of service? Stores have been giving expert advice without wasting an entire location for decades.
We often divide customers into groups based on how they prefer shopping: online versus in stores. The showroom is descended from that model of thinking, but it’s flawed. No customer shops just one channel. It’s the wrong question, because it doesn’t have the context of the type of purchase and the customer’s knowledge of the item. Customers shop different channels based on the products themselves and how much they trust the brands providing the products. REI, Eddie Bauer, The North Face and Patagonia, to name a few, have been competing on technical expertise and product quality for years. Other brands could learn a thing or two from them.
Brands can make sure their stores—in their current states—are the prime sources of information, guidance and expertise if they provide quality advice and friendly, informed associates that can be considered experts in their fields.
Inspiration and Experience
While showrooms aren’t a necessity or an option for every brand, they can still teach us about the evolving store experience. Customers want a reason to go to stores. As mentioned previously, that reason can be expertise, or it can also be the old-school model for customers that want to have a great time.
Kids used to flock to malls to hang outbecause it was the best way to socialize with friendsand they’d buy product while they were there for the experience of being in a group. Brands don’t have that luxury anymore.It’s not that customers don’t want to go to the mall to hang out; it’s that the bar is so much higher for entertainment. Brands are competing with mobile, gaming consoles, NetFlix, and so many other distractions that people don’t go to the mall for fun as often. But that doesn’t mean they wouldn’t if brands provided an incentive to do so.
Lululemon understood that foot traffic was a problem across the industry, so the company provides workshops and actual yoga sessions in its stores. REI also has a range of engagement options,but it’s an outdoors brand, so REI took the store to its customers by offering actual camping trips to get customers involved.Filsoneven offers training and classes for product care on leather and canvas.
Inspiration doesn’t mean a showroom—it simply means thinking differently about making your brand worth a customer’s time.
Change is Good
Stores are evolving. We’re realizing that they can’t be one-dimensional any longer. The possibilities are only limited by our old standard of thinking. In fact, we shouldn’t even use the word “store” anymore—it’s a warehouse, an education center, a training tool and an environment for inspiration and great experiences. Stores might be suffering for now, but change is good. We need to embrace it and let stressors help guide the evolution of an outdated mindset.
Evan Magliocca is Brand Marketing Manager for Baesman Insights & Marketing, a full-service agency that partners with retailers to create highly-targeted, data-driven customer marketing, loyalty and CRM programs. Baesman is headquartered in Columbus, Ohio, with partnerships across the United States, including: American Girl, DSW, Rag & Bone, Shoe Carnival, Stanley Steemer, Rite Rug, and many more.