What’s in store for retail?

Alan Peyton
On: 31 Jan 2019
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Retail trends

Many retailers reported pretty gloomy Christmas trading results, and if you judge solely by recent headlines it appears bricks-and-mortar shops are doomed. However look a little deeper and it’s clear that this is not simply a period of decline but of transformation. Those retailers who will survive – and thrive – are those who are prepared to change.

Inevitably, change will be harder for businesses established before the age of e-commerce. With the exception of personal services such as haircuts, tattoos and dining out, customers can now conduct the majority of their shopping online if they wish. Retailers who launched into this world are better prepared and may be less burdened with the legacy of a physical street presence. Retailers with a predominantly bricks-and-mortar presence need to take action.

Enhancing the online experience, offline.

It’s not about the physical store versus online. It’s about the offline store experience and the online store experience complementing each other. It’s true that the percentage of online shopping transactions is rising while the percentage in-store is falling. What is impossible to predict is where the balance between the two will ultimately be struck.

For certain products, visiting a physical store is a definite advantage. The physical store can enhance the purchasing experience in a number of ways; for example with product demonstrations, first-hand product education from an informed sales assistant, and by allowing customers to hold and try the product for themselves. Retailers need to adapt their stores and train staff accordingly. The result can be an enhanced shopping experience, which repays the time and effort the customer has invested in getting to the store. The challenge for retailers is to acknowledge this is no longer the whole of the purchasing experience. Customers will often research online before purchasing in-store, or will treat the physical store as a showroom before purchasing online. Whether the customer ultimately buys in-store or online will be their choice. The goal of the progressive retailer will be to enable an easy purchasing process, wherever and whenever suits the customer.

Traditional retail stores essentially act as mini-warehouses, with the primary function of immediately fulfilling customers’ requirements. They therefore need to carry thousands of stock items across each of their stores. Compare this with the new retailers such as Bonobos, whose stores display their core range purely to enable customers to experience the products and try them on. Customers then order online through the store’s system, for next-day delivery. The opportunity for traditional stores is to introduce concepts like these gradually. This could include the ability to purchase online products which are not stocked or are out of stock at a particular store.  Retailers will then have the freedom to create more impactful product displays and immersive customer experiences, and to free-up retail teams to spend more quality time with customers to add even more value to the in-store experience.

Clever retailers are also applying lessons learned online to in-store. For example, just as online shopping makes it quick and easy for customers to find the products they want, interactive digital screens can help them in-store, from map guidance to stocking information.

Achieving the Holy Grail of retail.

Merging the on- and offline experience can help to achieve the Holy Grail of retail: repeat purchases from loyal customers.

A customer who initially buys a consumable product, such as make-up, in-store – where they have been able to try it and be educated and advised – can be signed-up for a regular repeat order delivery to their door, for online alerts of new product launches, and for invitations to exclusive in-store events. This creates unique value both for the customer and the retailer.

These online interactions facilitate continuous dialogue and brand loyalty-building, which is much harder to achieve solely offline. Integrating all possible modes of customer interaction into a seamless, omni-channel experience is a powerful way of making it easier for a customer to discover, compare and ultimately make a purchase. Even Amazon, arguably the most groundbreaking online retailer, is now opening physical stores. It’s clear the future of retail doesn’t include shutting-up shop any time soon.

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