The Future of Retail is in the Store

17 Feb

The Future of Retail is Inside the Store

Do you remember that first time you walked into an Apple Store?   How could a retailer have a store with a handful of tables where you can play with the products?  Every piece of that store is made to increase sales output.  If you decided to buy a product you didn’t stand in line at checkout.  An Apple employee would use his phone or another piece of technology and run your card right there on the spot.  Now Apple is continuing to change the market with the new Town Square store that is being tested in San Francisco.  The experience they’ve created is so powerful that just this weekend my 5 year old spotted the store and immediately asked to go inside.  She loves the experience as much as most consumers.

While the hockey stick growth of e-commerce continues with the National Retail Federation reporting that 12% of sales in Q4 were online or non-store most retailers still see somewhere between 80-90% of sales occur at physical location.  In another report by Quarterly e-commerce for Q3 they identified that only 8.4% of sales were occurring online.   Every retailer is looking for ways to bring you into the store and then increase dwell time, basket size or close rate per consumer.

While marketing is still a key component to driving consumers into store, the experience at locale is increasingly important in capturing the consumer and increasing loyalty.  This is why most retailers are working to solve the omnichannel  marketplace.    Brands that are already doing this are Warby Parker, Birch Box and Bonobos.   This new approach to retailing gives customers access to samples and an experience in a store that is unique.  It also provides valuable research to these clients.  Just recently Anthropologie announced an experiential new format that allows for consumers to touch and feel and then buy online, mimicking some of these smaller companies in a larger format.

Consumers still want to touch, taste, and feel the product which increases the opportunity for a relationship with the consumer.  In the past 2 years I’ve purchased multiple appliances all at Best Buy because I could feel it, see it and experience it.  In addition Best Buy matches Amazon prices so if something goes wrong with these products I know I can walk in and talk to a customer service rep.

So retailers need to continue to evolve the in-store experience and measure the impact on the business.  Neiman Marcus Group, Nordstrom Inc. and Under Armour Inc. are among 140 retailers that have signed on with ChargeItSpot allowing consumers to charge the phone while they shop.  We all hate that dying phone feeling so consumers are actively shopping at these stores and they are seeing sales lift of 29% according to the study.

Retailers should market the product and build a moat with the experience.  In a world of “Me Too” products, and in some cases the same products, it becomes a race to the bottom.  To stand out make your store one of the stores that consumers want to walk in and increase the bottom line.

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