The False Legend of the Retail Apocalypse
The sky is falling! The sky is falling!
Chicken Little had nothing on today’s media when it comes to predicting the implosion of retail stores. They’ve dubbed it “the Retail Apocalypse.” If you believe the hype, brick-and-mortar stores will soon be a thing of the past.
It’s true that Amazon.com and big-box stores like Walmart are squeezing retailers from both ends. Mass shutdowns of mom-and pop boutiques, department stores, and even sprawling malls seem to be laying the groundwork for the collapse of the retail industry, at least in its physical form.
E-commerce, on the other hand, has grown exponentially each year. After all, it’s easier to click an “Order Now” button on the computer than it is to drive to a store, scan the shelves, choose an item (without looking at any reviews… can you imagine?!), wait in a checkout line, and then brave the traffic on the way home.
Even when consumers do visit stores, they are often guilty of “showrooming,” where they use the physical store as a place to look, touch, and consider a product – but then go online to buy it for the best price they can find. Some shoppers even have the chutzpah to snap a photo of the item in front of the salesperson before announcing, “Hey! Look, it’s 20% less on Amazon…”
But to paraphrase Mark Twain, the reports of retail’s demise have been greatly exaggerated. Rather than dying, successful retailers are actually undergoing massive transformations. The brick-and-mortar store is becoming more than merely a place to buy a product; instead, it’s metamorphosing into a fully-loaded customer experience.
Selling the Experience
When today’s customers visit a store, they are looking for an elevated experience, one that they can’t get by browsing Amazon. It’s like going to the movies or hitting the mall with some friends – your goal is not to shop or watch a movie, but to hang out and enjoy the time.
Ikea is a perfect example. Far from a typical retail store, Ikea has reimagined itself as a place where kids can play, adults can eat and relax, and everyone can explore.
Nordstrom Local takes this one step further. It is a brick-and-mortar store that has no sellable inventory at all. While the store does provide pickups for items that are bought online, Nordstrom Local is primarily about personalized services, including a free style bar where stylists provides advice and assistance; a trunk-shop club where customers can order made-to-measure clothing; a salon that provides manicures and makeovers; and a bar that serves fresh-squeezed juices and alcoholic beverages.
Other concept stores, such as the Italian chain Eataly, try to create a global experience for shoppers that encourages them to spend as much time as possible in the store. In Eataly’s case, it’s a unique mix of restaurant, grocery store, and cooking school. The intent is that you may visit the store to attend a cooking class or sample the restaurant’s foods, but that you will then be more likely to mosey over to the grocery section to buy the ingredients you’ll need to recreate the experience at home.
Tapping into Technology
Other stores are harnessing technology to provide consumers with a better in-store experience. For example, British catalogue retailer Argos has revamped their stores in recent years. iPads have taken the place of laminated catalogues, allowing customers to read online reviews, check to see if an item is in stock, and watch product videos. Besides making the environment more interactive, they have also created click-and-collect service, which allows shoppers to prepay online and quickly collect the products they have selected from a shelf in the store.
Urban clothing brands like Supreme harness technology by using social media. Supreme will “randomly” drop a stock of brand new, unique clothing at one store location, and post about it on social media. This draws flocks of consumers who are in the area to the store. This might sound like a classic “sale today” tactic, but Supreme is actually luring customers with a social experience: the thrill of joining a crowd of like-minded shoppers in one place, at one time.
Providing Interaction with the Product
One of the main advantages that stores have over their online counterparts is that consumers can actually touch, see, and manipulate the products they are considering. That’s why, after twenty years in the business, Vistaprint finally decided to open its first brick-and-mortar store, Vistaprint Studio, in downtown Toronto.
Like test-driving a car or trying on clothing, physically experiencing how a product works can be an important first step in reaching a purchase decision. Some companies have tailored the retail experience to give prospective customers as much “touch and feel” as possible. Dyson has a store in London that provides shoppers with up to sixty different types of debris that they can use to test out their vacuum cleaners. Nespresso has followed this path as well, opening Nespresso Boutiques to give customers the opportunity to taste and smell their products. After they are blown away by their experience, they will – at least in theory – then proceed to order additional products online at their wholesale website.
Creating Related Experiences
Other retailers have found that if they can successfully entice consumers through their doors or any reason, they’ll be more likely to browse and buy. That’s not a new idea; it’s why bookstores have long held book signings or “talk to the author” events. In today’s retail world, however, it’s becoming more widespread. To reel customers in, Sur La Table offers cooking classes, Dick’s Sporting Goods offers golf swing simulators, Mountain Equipment Co-op offers mountain biking groups, and REI offers rock-climbing walls.
And then there’s J. Crew, which regularly holds themed weekends that attract different types of shoppers. For example, one weekend might have the theme of “careers,” where store associates discuss how to dress for success at work, while offering career-related incentives for high-paying customers like a premium LinkedIn account.
What Retailers Can Do
If you’re a retailer who sees the writing on the wall, what can you do to ensure that your store doesn’t become another industry statistic? Focus on your customer’s in-store experience, and make it unique to compete against the online world.
- Provide personalized support. Train your employees to have a customer-centric mindset. According to a survey from PwC, 46% of today’s consumers have done online research before buying in-store. This means that your employees need true domain expertise more than ever before.
- Offer in-store activities. Brainstorm ideas that will draw crowds to your store, including book signings, workshops, and guest appearances. View these as marketing investments, not as a distraction from selling.
- Use technology to provide an interactive experience. According to mobile loyalty company SessionM, 90% of shoppers use their phones while shopping. Find ways for your customers to discover more about your products on their phones, and allow them to leave more satisfied than if they’d bought online.
- Provide customers with a fun, unique experience. Ask yourself — and your staff — what would make your customers want to come to your store for a product rather than ordering it on Amazon. Then take the leap and provide that for your customers.
The “Retail Apocalypse” may be over-hyped, but it is a real warning. And while “selling the experience” is crucial for brick-and-mortar retailers, it can be applied to any business. Customers today are looking for higher levels of service than ever, along with stores that provide a unique experience that they just can’t get online. The role of a physical store has changed; make sure that your business changes along with it.