When traditional stores falter, how can retailers use tech to turn physical stores into genuine destinations?

My grandmother was a shopkeeper and always taught me that I must know and understand the customer, because however much they liked you, they would always shop around. It would be difficult to explain to her just how radically different shopping is today.

Expectations are being reset with every visit, click, delivery and download. Value is no longer simply price x quality, but a more complex equation including convenience and experience, and our physical stores are being transformed to become all-encompassing brand experience destinations.

Over the course of the past year, we’ve seen Lululemon launch an exclusive fitness centre in their Mall of America megastore, Toys R US collaborate with b8ta to unveil an open play space playground in Paramus, NJ, whilst Canada Goose opened an experiential store which features artificial snow storms. Today, the emphasis is on total immersion, taking the customer into a new world when they enter the store.

Why does the physical store continue to remain relevant?

These launches show how the role of physical retail space is being transformed and how their value in our omni-channel world is being redefined. With new store openings driving web traffic by as much as 64%, and online sales rocketing by as much as 110% inside catchment areas of physical stores, it’s clear that bricks and mortar locations have a key role to play in the integrated shopper experience. It’s why online retailers such as Casper’s and Notonthehighstreet are investing in pop-ups and longer term physical locations.

Empty stores highlight the challenge for some legacy retailers; our high street is evolving, taking on an evolved and more integrated role in the customer journey and the smarter brands and retailers are no longer simply measuring their performance on sales. Just as the value equation has evolved for the shopper, measurement of ROI must change in retail, defining a sales attribution model in a similar way to online media.

Sensors, interactive screens and technologies, including voice and ‘lift and learn’, all add to the traditional in-store data sets and help us to measure touchpoints and define a return on in-store experience. Combining that with transactions on and off-line can help give us a truer measure of the role of the physical store in omnichannel retail.

Brands and retailers that want to perform in this new retail landscape will need to invest in creative, technology-led in-store solutions and find ways to connect them to digital stores and experiences, closing the loop on brand engagement, as Nike have done with their in-store mode on their app.  They need to keep pace with consumer expectations too, ensuring they have a single customer view enabling them to move seamlessly between platforms, devices and environments as they shop.

Curating the in-store experience

Consumers have three types of budget: money, time and frustration. E-commerce giants like Amazon offer costs and convenience that physical stores may never be able to compete with, but there is a real opportunity in ‘time’ for experience.

We’ve recently seen HMV ‘s ambitious launch of ‘HMV Vault’ in Birmingham – Europe’s largest entertainment store, that stocks over 100,000 LPs and CDs and has been constructed with a large performance area at its centre.

The brand’s original, near-fatal collapse was due to the fact that it was a legacy business, operating on too many high streets. It failed to react effectively to the disruption from streaming companies, and it didn’t do enough to ensure that its locations were offering something that consumers couldn’t get from the online world.

This shift to transforming its physical stores into entertainment hubs is a strong and necessary step in the right direction, and shows how brands and retailers need to evolve the offering of their physical stores to deliver experiences that shoppers can’t get from anywhere else.

With so many technological developments including the Internet of Things, voice-enabled transactions, and machine learning and AI on the horizon, the possibilities for innovating experiential retail are endless. Brands and retailers need insight into why people are visiting their stores in the first place, which they can then leverage;  introducing strategies that further champion their brand and unique offering, giving these shoppers reasons to visit the store time and time again.

Simon Hathaway, managing director at Outform EMEA



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