Stores Make a Comeback: Becoming a Hub for an Array of Customer Services
The store is making a comeback. Even online pure plays are laying down bricks and mortar, setting up “shop-in-shop” stores and large flagships to keep pace in the multichannel world.
And within this channel, physical stores are enhancing their digital capabilities. For example, Nordstrom allows shoppers to text with personal stylists and even purchase a suggested item by simply texting “buy.” They can also enjoy curb-side pickup via text while the H&M store in New York’s Times Square allows customers to pay for items in their dressing room.
Propelling these trends is the fact that stores provide the physical proximity to the customer that the Internet cannot. Online shopping, however, provides constant access to the customer that stores cannot. To ensure competitiveness, both need to rapidly address their respective blind spots — and be more like each other.
There’s more to the store
Stores are back, but in a different way and with a new format, feel and function. Retailers are shaping the multichannel landscape to sustain competitiveness and maximize profitability by rethinking this evolved role of the store. Recent research by Accenture reveals that webrooming and showrooming are prevalent among U.S. shoppers, with 69% and 65% likely to participate in each respectively.
Stores are becoming an interactive place where retailers can tout their wares and deliver an elevated customer experience. Warby Parker has embraced the showroom experience, using its new brick-and-mortar stores to allow customers to try on frames and then have them made to their prescription and shipped to their home. The interactive experience at their flagship store in SoHo is library-inspired with rolling ladders for reaching glasses in high places, as well as a photo booth for customers to check out their new looks.
Luxury fashion retailer Rebecca Minkoff has taken its in-store experience to a new level, furnishing its fitting rooms with customizable lighting, scanners to check item information, and an option to contact a sales associate or check out through a mobile device. On the showroom floor, a mirrored display lets shoppers view videos from the runway and browse through clothing and accessories. Burberry’s London flagship store epitomizes the immersive, multimedia customer experience. Shoppers can design their own customized trench coat, view 3D hologram runway shows and ask an iPad-equipped salesperson to look up details of an item.
The store as a distribution center
For some retailers, the store is becoming part of the chain’s wider distribution network and serving as a distribution and pick-up center. Walmart began testing this model in 2014, when it opened a warehouse that carries 10,000 items and offers same-day or scheduled grocery pickup and curb-side service. While the warehouse facility is much smaller than a typical Walmart store, it meets customer needs by providing a new level of convenience.
In fact, Accenture research found that 36% of shoppers would wait for a store to open the next day to pick up what they ordered, but only 32% of shoppers are willing to wait more than five days for their goods to be delivered. Retailers are re-evaluating their physical store network along with their distribution network to identify ways to improve and meet customers’ increasingly higher expectations. By consolidating stores and capturing savings, retailers can reinvest in digital capabilities to enhance their online presence.
The store as a multichannel hub
As retailers bring new, engaging, digital experiences to their stores, they must also consider what role their stores play alongside ecommerce and mobile to create multichannel engagement. It is not as simple as achieving the right balance of “bricks and clicks.”
Retailers must deliver a seamless experience across all channels — and the store can be the place to bring it all together. Associates equipped with digital devices can display product information on their smartphone and guide a shopper right to that item in the store. By being connected across channels, shoppers who purchase an item online can have the option of returning it to a brick-and-mortar store — even texting return information and conveniently dropping off the item at a drive-thru window.
The best of both worlds
Rethinking the physical store is critical to competitiveness, but it isn’t the entire seamless retail story. Success will come when retailers design a seamless, integrated strategy that is aligned with a new operating model. In so doing, retailers can reap the best of both the digital and bricks-and-mortar worlds. Stores offer proximity to customers.
Being closer to customers allows retailers to get packages out more quickly and economically. China-based e-commerce giant Alibaba invested $692 million into a department store operator, Intime Retail, to expand its physical footprint and take advantage of the growth opportunities that stores present.
Delivering seamless goes beyond simply opening a showroom or connecting a distribution outlet with an online channel. Stores and distribution must operate as one. Digital opens up opportunities for retailers to meet customers’ desire for an integrated, seamless shopping experience.