Despite countless headlines to the contrary, the physical store is far from dead. In fact, in many places, it’s thriving.
Pioneering retailers understand that in the face of unprecedented disruption, the possibilities of what a physical retail environment offers have to change – and dramatically.
Retailers that are resurrecting the potential of physical formats are doing so with a sharp focus on who their customers are and what they want most. They’re investing time and money in getting to know customers’ needs and expectations in detail. Armed with those insights, they are creating new and different experiences that hit home with their most valuable customers.
“Stores across an estate can each provide formats that offer the right experience for a relevant customer segment”
Crucially, these retailers realise that online and in-store are not either/or choices. Instead, they offer an opportunity to extend the customer journey with new experiences that increase engagement. Businesses that have started exclusively online, such as Casper (mattresses), Everlane (cashmere knitwear) and Warby Parker (eyewear) have all used physical formats to extend their appeal to customers who want to have an up-close-and-personal interaction.
Some established retailers are taking imaginative steps to reinvent what a physical store is for. Take high-end US fashion retailer Nordstrom. Its Nordstrom Local store offers services such as tailoring, style advice and collection services locally. While it doesn’t offer any products in-store, the services provided all support what customers need and therefore extend the appeal of the overall shopping experience.
Customer clarity
What these retailers have in common is total clarity about who their most valuable and loyal customers are and what it is that they most want from their shopping experience. There is no one-size-fits-all rule here. Customers will want different things at different times. At certain points, convenience may be the overriding priority, so minimising all potential friction will be critical. That’s what Starbucks is aiming for in its pick-up only stores.
At other times, there will be a desire for a more engaged, consultative experience where shoppers are looking for advice and inspiration. Chanel’s Atelier Beauté Chanel in New York takes that to the next level, targeting millennials with classes about how to use their make-up.
“For retailers prepared to rethink the art of the possible, these are exciting times”
Stores across an estate can each provide formats that offer the right experience for a relevant customer segment. The key to addressing these different contexts? Having the agility and flexibility to adapt the estate with a store operating model that meets those clearly understood needs and experiential requirements.
The store operating model covers the people working in the store, its physical layout, the processes and the systems and organisation design that align the operations to the needs of the most valuable and loyal customers.
Technology is crucial here, too. But it has to be put to work to empower staff and gather customer data that will support the continuous evolution of the in-store experience.
Data analytics is also essential to mine the rich seams of qualitative and quantitative data that are laid down by every interaction. These provide the insights to not only deliver to customers’ needs today, but anticipate what they will want tomorrow, too.
Bricks-and-mortar renaissance
Far from being in terminal decline, the physical store could be entering a new age. But this renaissance will only be achieved by retailers willing to be bold. Those already pioneering new thinking are characterised by a willingness to take risks. They are prepared to make mistakes, fail fast, learn and go again. They are being playful and imaginative to offer customers exciting, distinct and unique experiences.
One business bringing all this together is Primark. At its branch in Birmingham – the largest single-brand fashion store in the world – Primark has focused on creating experiences that resonate powerfully with its most valuable customers.
Fundamentally, Primark has ensured all the basics of store operations are working well. Building on that foundation, it has created a wide range of experiences that appeal to its young, social-media-savvy customers. There are restaurants, an in-house barber and dedicated spaces to book where shoppers are encouraged to spend time with their friends, try on whatever clothes they like and take selfies to their hearts’ content. It’s all about maximising the fun shoppers have, under one roof.
For retailers prepared to rethink the art of the possible, these are exciting times. The only limits on that potential? Imagination, investment and courage.
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