Retailers need to take the omnichannel needs of customers into account when siting and designing brick-and-mortar stores.
Chain Store Age recently had a conversation with Nikki Baird, VP of strategy at POS and enterprise retail solutions provider Aptos, about how retailers need to adapt their store growth strategies to the needs of constantly connected, 21st century shoppers.
How can retailers use data analytics to aid site selection?
There are a million data points that go into site selection, everything from basic geography to traffic patterns and drive times, to demographics, to projections of all those things for the expected lifetime of the store. One category that has not historically been considered, but is becoming much more important, is omnichannel.
That would include things like, what is purchased in the ZIP code or market zone, regardless of channel? What is purchased that is not carried in local stores? What is purchased that is carried in local stores? What is returned? What is purchased for pickup in store, and how would a new store potentially change those patterns?
Also, how might a new store change ship-from-store patterns? How might a new store change returns patterns – could a new store reduce the amount returned directly to the warehouse by opening up a more convenient location?
[Read more: Building the Business Case for 'Store as a Warehouse']
What are the advantages of opening smaller, more locally tailored stores?
Retail, especially in North America, has long been over-stored. Basically, all the ‘good’ locations are taken – that’s why A-level malls continue to do really well and almost none of the other categories keep up. Finding locations that fit into a convenient location for a large concentration of a target demographic is getting harder.
But that’s only if you keep the mall kind of mentality, thinking that you have to have a store of a certain size in a certain demographic or traffic draw. If you change the parameters of the store, you can find locations that would not have been viable 10 years ago, but with a smaller mentality in mind could be viable now.
Again, it’s really only the growth of omnichannel that has made that possible. For example, smaller stores have historically been risky because it’s tough to get the assortment right. But if you’re constantly cycling inventory in and out, then you can keep a smaller location fresh and get a better idea of what works there or what doesn’t work without trapping inventory in the store – you just release it back to be eligible for ship from store, and if it’s not selling locally, you still have a chance to sell it without having to mark it down.
What has and hasn't changed long-term in how customers shop in-store since the COVID-19 pandemic?
Consumers expect more connectedness from the retailers they shop at. It’s always been the case that consumers come to stores expecting store associates to be able to help them. Otherwise, they would just do their shopping from their phones in the parking lot, it would be basically the same experience.
But knowing – and seeing – how much retailers have invested to make it easier to either pre-shop online before coming to the store, consumers expect that same level of seamlessness across every kind of possibility, such as endless aisle or buy-online-return-to-store. And they expect store associates to help them and be central to delivering that experience.
[Read more: Target begins curbside return rollout]
What is the role of in-store technology in serving the needs of local shoppers?
This is where local can get really interesting, and where Nordstrom definitely shook things up with their local concept. As a consumer, if I could reserve a fitting room experience, at a store close to my house, stocked with a dozen things that I want to try on, ready for me when I arrive, that would be an amazing experience.
That means the store associate needs to know who’s coming in, what they’re looking to try on, which pieces they want vs. any extras that are sent along for inspiration, etc. Local shoppers need more personalization and, if it’s possible, personal connection.
So, while self-serve should always be an option, I think the priority needs to be enabling employees to deliver on those heightened expectations. And it’s fair to say, I’m primarily talking about a more high-consideration or high-touch shopping experience here; not the kinds of decisions that go into localizing a neighborhood grocery store.
What will the biggest physical retail trends be in the next year or two?
Store redesign that encompasses omnichannel requirements more natively – like pickup zones and/or return zones, or storage for orders awaiting pickup – will be a major trend in the next year or two.
In-store mobile is also a developing trend. We’ve been talking about mobile for a long time, but it’s the rare retailer who has successfully integrated mobile into regular employee activities in stores – let alone as part of the employee-customer relationship. There is still a lot of opportunity for mobile functionality in stores, and with store associates expensive and hard to find, the pressure is on to find and keep staff that's more productive – and mobile is a key enabler there."