The fundamental construct of retail stores is rapidly evolving as the world steps into a digitally profound era.
The emergence of the Covid-19 pandemic only quickened the pace with which consumers shifted their medium of affairs from physical interaction to strictly online.
Nonetheless, as we gradually approach the recovery stage of this pandemic, more and more people find themselves urging to return to the pre-pandemic hustle and bustle of in-store shopping.
This puts retail businesses in quite a dilemma; they must construct a strategic course of action that bridges the digital experience of shopping with the physical one while providing a seamless transition, or rather a collaboration, between the two
This resurgence in need for human interaction provides retail stores with the opportunity of a ‘brick-and-mortar’ comeback. In fact, during the first quarter of 2021, up to 50% of surveyed participants claimed they intend to immediately start shopping at retail stores once the Covid-19 restrictions eased down.
The existing vacancies in retail have pulled prices down, allowing retailers to be entertained with favorable lease terms and shorter contracts, significantly reducing the costs of a physical store.
On top of this, the excessive digital marketing and advertising expenses act as more of an incentive for digitally native brands to shift to physical advertisement through in-store consumer acquisition.
A Hurdle Here and There
However, the road to success is seldom straight, and there are some obstacles that retailers may have to overcome:
- Competition According to Shopify’s eCommerce Market Credibility Report 2021; ● 32% of brands intended to establish or expand their use of pop-up and in-person experiences in the next year ● 31% planned to establish or expand their physical retail footprint. A direct consequence of setting up brick-and-mortar retail stores is fierce competition. The more retailers enter the market, the harder it will become to keep a long-term position. To secure long-run scales, acquiring a unique brand image is imperative.
- Supply Chain Industry leaders from various sectors have concluded that small businesses will have to bear the consequences of supply chain fluctuations, labor shortages, and price hikes until 2023. Tim Bridges, global sector lead for consumer products, retail, and distribution at Capgemini, advises retailers to monitor the supply chain consistently, stating that excellent marketing is useless if suppliers cannot meet the consumer demand. Capgemini also advises moving towards a localized supply chain; not only do 54% of consumers favor locally or regionally produced products, but such a change would allow a more reliable supply source.
So what must retailers keep in mind while planning their next move? How can they ensure that a brick-and-mortar store will prove to be a good decision?
The answer is relatively straightforward. Retailers must provide consumers with a product experience that an online substitute cannot match.
The sky-high competition in the retail market requires producers to participate in the non-price competition by attributing a one-of-a-kind experience with their products.
To assist retail companies in such an endeavor, we have listed below three of the most critical factors in acquiring strong brand loyalty.
The Experiential Approach
With the new face of retail stores, producers offer a wide range of immersive experiences for customers. Experiential retail is just that- engaging the consumer in the brand’s concept, culture, and values.
‘Differentiate and diversify,’ according to Shopify; these two tools will be a retailer’s best friends in 2022.
Retailers compensate for the result of e-commerce in making in-store shopping obsolete by making the store experience a necessary part of the entire brand experience. Retailers can do this through personalization.
Brands can study customer demographics and assemble customized store shopping experiences. Studies show that 72% of Millennials are more willing to pay for experiences than products.
Many stores have set exemplary models in terms of experiential retail:
1. Casper’s Dreamery
This retail store knows how to engage consumers. Mattress startup Casper offers a store in New York where customers pay $25 to take a 45-minute nap.
Clients can book ‘Nap Appointments’ to test mattresses, sheets, and bedding before purchasing. The store even provides pajamas, skincare samples, and a free coffee after your nap as part of the ‘nap’ package.
2. L’Occitane en Provence
Offering skincare and body care goods adored by fans, this French beauty company has opened a new experiential retail location in New York.
The store offers conceptual art sets that customers will be itching to photograph. What’s more, the store also provides relaxing hand massages to help you wind down after a stressful day.
Rest assured, you won’t be able to get that online!
3. Nike Rise
Nike has long since researched perfecting the formula to provide buyers with an immersive shopping experience. It seems that Nike has reached this goal with its new high-tech vision realized in Seoul, South Korea.
The experience-oriented store has various hubs, such as the ‘Sports Hub,’ for instance, which allows consumers to look for sporting events in the community that they can take part in.
Now we should move on to discuss a few recommended ways to offer the ultimate in-store experience to consumers.
1. Pop-up shops, pop-in stores
It would be prudent to test the waters first before diving headfirst into the retail store market. Holding pop-up shops where consumer demand is high will be an excellent way to check your consumers’ preferences.
Collaborating with other stores to arrange pop-in stores can help determine whether your consumers are product-oriented or respond better to an experience-based approach.
Once you have acquired this consumer information, move on to leasing a store.
2. Provide a one-of-a-kind experience
This point may seem repetitive, but that is just how important it is. Companies must convince customers that the shopping experience is incomplete without visiting the store.
The aim should focus on instilling a sense of belonging in the consumer. Many stores provide a relaxing environment through calming music and offering consumers beverages upon their arrival.
3. In-store appointments
It is advised to devise your marketing strategy to integrate the virtual and physical.
Brands can utilize e-commerce for online product sales, and the store may be employed as a platform for personalization and client experience.
Consumers can try out new products at the store. Suppliers can also provide professional guidance to accelerate the experience.
Shopify states that 34% of consumers in 2022 are more likely to engage in the purchase process with appointment shopping.
The Consumers- Reimagined
The pandemic has brought about a massive change in the behavior and priorities of consumers. Rather than focusing on just the product and brand value, consumers have started making purchase choices that reflect their ethical, moral, and environmental concerns.
64% of Gen Z and 54% of Millenials have paid and are willing to pay more for groceries in sustainable packaging.
Thus, retailers must align their brand’s principles with consumers’ values. Consumers are four times more likely to purchase from a brand with strong brand values.
Therefore, if consumers are satisfied by what a brand stands for, they are more likely to look the other way in case of transportation cost hikes, breaks in the supply chain, etc.
An omnichannel retail strategy refers to the act of unifying multiple channels (such as apps, websites, and brick-and-mortar stores) to allow users to engage with products, offers, and customer services on all platforms simultaneously. Omnichannel differs from a multichannel environment in which although information is displayed across a range of channels, data isn’t necessarily synchronized.
55% of buyers would prefer to browse products online first and then check stores. Meanwhile, 53% would like to inspect a product in-store and buy it online later.
Retail companies must use a blend of e-commerce and brick-and-mortar experience to set their brand aside and gain a competitive advantage in the market.
Software Advice surveyed around 700 retailers, who claimed ‘to provide an omnichannel user experience’ was at the top of their list of priorities.
Moreover, the e-commerce Market Credibility Study, 2021 by Shopify claims that 53% of brands are investing in tools that will help them sell anywhere.
A central, emerging element of the omnichannel approach happens to be BOPIS- buy online, pick up in-store:
- ICSC Survey shows that 50% of online shoppers preferred ‘click and collect.’
- In 2019, sales revenue from BOPIS rose in an average of about 35%
The question arises; should retail companies offer BOPIS? What exactly are the plus points of this approach?
- Convenience- 83% of people find convenience to be an essential factor while shopping
- Quick returns and exchanges- easily visit the store to return or exchange item
- Drive-up sales- while picking up orders from the store, customers tend to have a look around and may end up buying a bit more than they originally planned
- Shipping- the company can cut down on transportation costs and boost net revenue
How to deliver the perfect Omnichannel experience:
- Use store as a showroom. Carry less stock in-store, replace it instead with an experiential retail
- Ensure a consistent experience across all channels by synchronizing data and managing a unified database. Manage the entire business from one platform; use a POS system to keep track of sales.
- Update product data timely. Allow users to check the availability of products in real-time and enable them to receive restocking notifications.
To get a better idea of how to implement a distinctive omnichannel approach practically, take a look at the following list of stores that have perfected the omnichannel game:
Amazon has over 600 physical stores across North America, whose sales touched $4,688 million in the fourth quarter of 2021.
The retail giant has recently announced a clothing and fashion retail brand called ‘Amazon Style.’ The store will unify multiple channels to aid customers in their experience.
Buyers will be able to use the Amazon Shopping app to:
- Send articles to fitting rooms or checkout counters;
- Scan QR codes of items to reveal available colors, sizes, and so on;
- Access personalized offers as well as real-time shopping recommendations
Along with leading the cosmetic industry, Sephora has also cracked the code for marketing leadership.
Sephora makes use of the omnichannel approach by synchronizing its app and retail stores for a sublime shopping experience. While in the store, buyers are offered professional beauty tips, assistance from expert salespeople, and even free makeovers.
Clients can track orders, view tutorials, keep wishlists, or even scan items in-store on the app.
Ikea provides assistive services via a brilliantly executed omnichannel user experience.
Through the app, users can browse products and use VR technology to virtually assess what a piece of furniture would look like in their place.
The brick-and-mortar experience is not far behind in terms of convenience and innovation; consumers can digitally add items to their shopping list in the app, which will then point them towards the exact location of an item.
Where staff comes into play!
It is not just the consumer’s expectations that are changing, but the employee’s vision for work is also transforming.
All over the US, retail workers are quitting when demands for higher wages and better working conditions are not met. This poses a considerable threat to retail companies as the industry needs to be labor centralized to offer an all-rounded consumer experience.
58% of consumers consider customer service as a deciding factor when shopping. For this reason, 39% of retail brands are investing in tools and technologies to increase the productivity of an employee’s day-to-day tasks. According to Shopify;
- 52% of retailers are investing in tools that allow virtual sales
- 45% of retailers intend to invest in enabling asynchronous chat experiences
- 30% of brands are providing an appointment shopping option to improve the in-store experience.
Thus, due to the retail staff’s irreplaceable position, retail employers must change their stance and maximize employee retention. Businesses should assign specialized roles to staff and hold frequent team-building discussions.
Companies must ensure that employees don’t face burnout and provide a healthy and constructive environment.
To match the new demands of consumers, the staff should be trained, and their work should be enhanced through technology. Many consumers expect the staff to know their order status, past preferences, and purchase history.
Thus, the staff should have access to such data instantly.
The Way Forward – The conclusion
We have thoroughly discussed how the dynamic of retail has changed forever and how to keep up with this change. To conclude this discussion, we must stress the importance of consistently monitoring the shifting trends of consumer and market behaviors.
Consumer preferences, especially youth, must be analyzed to better understand the ‘future consumers.’
Retail companies should also look out for the growing urbanization rates and their pressure on the retail market competition.
Therefore, planning and preparing for expected trends are indispensable parts of building a strong brand presence to keep up with the ‘future of retail.’