Comment: Three key steps to keeping stores relevant

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The book Reshaping Retail by the McKinsey guys on the future of retailing presented some fascinating insights into the impact of technological developments.

Everyone is discussing the effect of omni- or multichannel thinking and the consultancy businesses are busy selling advice on many aspects of the digital world. I see fewer pieces, however, about the role of physical stores in this changing scene.

The truth is that for most retailers, understanding and evolving the role of the store is the key to success. When competing against economically advantaged pure-play operators it is critical that shops represent a customer benefit rather than an overhead.

Particularly in general merchandise, they cannot simply be convenient collection points because the occupancy cost will not allow that.

Once its role is established, the store estate can be right-sized and supply chain-optimised to compete successfully and build economic value. These are my thoughts: Retailers need to test and understand the showrooming aspect of a store’s role. Customers like checking out products in a comfortable shop environment before they buy online. Turning these visits into revenue demands adequate numbers of knowledgeable staff able to translate an enquiry into a closed sale. Some US retailers encourage online price comparison as part of this interaction.

Equipping the team with tools to do this, high-quality product information and the ability to place a firm order is the ideal.

Secondly, click-and-collect is growing very rapidly. Customers love the convenience of choosing something online and knowing that it will be available.

For some customers, a quick entry and exit is wanted. These people dread the prospect of walking through the store and then being kept waiting while a staff member scours the warehouse. For other retailers there is the important opportunity to engage and sell related items. Accurate stock files and a robust supply chain are critical.

Early, quality contact by telephone between store and customer is hugely beneficial throughout this process.

Return-and-replace is the third key aspect and is often forgotten. There is no doubt that today much more is being returned. Too many businesses see this as a negative and make things difficult for customers. Any visit, however, is a conversion opportunity, a chance to sell replacement merchandise.

Designing the process, including reverse logistics, so that all aspects are simple for staff and consumers is essential.

These are reasons for customers to visit a store alongside using a retail website. Being slick and effective is necessary to being competitive.

There are common themes around store design, staff skills and supporting technology. Few businesses fully embrace them and struggle to justify appropriate investment in capital or revenue.

But they are as critical as the IT investment for success in multichannel retailing.