Time for a facelift

What’s going to keep people coming back to physical store locations, as comfort levels with e-commerce rise every year? Savvy retailers are fighting technology with technology, refreshing the look and feel of their stores by integrating more gadgets, and using data in a more integrated way to inform strategy.



Technology is helping stores provide shoppers with a personalized experience. For example, Macy’s recently announced a series of initiatives to better connect its digital and brick-and-mortar businesses. And after a successful pilot, the department store retailer has rolled out iBeacon technology across all its stores, enabling customers to receive personalized department-level deals, discounts and rewards.



Meanwhile, Bloomingdale’s is reducing dressing room stress by offering Apple iPads mounted to the wall: When a customer scans an item in the dressing room to the iPad, she can check for other colors or sizes — and alert an associate to bring in new options.



Other retailers are experimenting with augmented reality, such as virtual dressing rooms and makeup mirrors that take pictures of the customer and show how different cosmetic products would look on them.



Creating a more interactive experience like this for customers helps to combat points of frustration in the stores. Knowing that long lines can be a point of tension, for example, tablets can be used to take customer payments and can also empower sales associates with deeper information about products and inventory.



In some cases, a more dramatic physical renovation may be necessary. AMC, the national chain of more than 350 movie theaters, wanted to offer movie-streaming customers a compelling reason to get out of their house and come back to the theater.



To transform the movie-going experience, AMC installed living room-like seating, updated food and beverage services, and gave customers the ability to reserve seats online. The result was dramatic: AMC now sells more tickets with fewer seats — to sold-out audiences.



The Army and Air Force Exchange Service is another example of an established brand that was in need of a more modern touch to improve the shopping experience for service members and their families. When it launched a prototype new store concept with its new brand identity, The Exchange, at the Tinker Air Force Base in Oklahoma City, there was a sustained lift in sales across all departments.



Old Tech, New Uses: Sometimes, technology solutions don’t have to be groundbreaking to be effective. In fact, electronic receipts are the most appealing in-store technology for consumers, followed by in-store kiosks and scannable shelf labels with product information, according to a March 2014 poll by UPS and comScore.



And more retailers are installing in-store kiosks to minimize losing customers who might otherwise walk away when they don’t immediately find what they want. Customers are seeking continuity, and retailers are eagerly pursuing ways to integrate home/ store/mobile commerce to create a more seamless shopping experience across all channels.



Big Data: Data can be analyzed to create more customized in-store displays, personalized recommendations, shopper-specific discounts and dynamic browsing — or to change physical aspects of the store.



For example, supermarket retailer Food Lion used data about customer purchases to pinpoint an opportunity with its produce section, which was grabbing increased customer focus. The chain wasted no time renovating its stores to better position its produce offerings and, in the process, enhance the customer experience.



Retailers must look for clues in their data that tell them what excites customers — or turns them away — and use it to identify the most appropriate in-store renovations.



Cost: Is it worth it for retailers to spend time and resources on improving the store experience? The short answer is an emphatic “yes.” Although e-commerce sales are projected to rise, research shows that physical stores still hold the most weight with consumers — 94% of total retail spending happens in stores.



Also, in-store conversion rates are four times higher than online-only conversation rates, according to a report in early October by International Council of Shopping Centers Research. This trend was further substantiated in a June 2014 study by ORC International and Capgemini, which found that the traditional store experience still holds more importance for consumers than online or other channels.



Compete on Delivery: Another way stores are looking to outflank their e-commerce competitors is by using their physical locations to facilitate faster delivery using a “Ship-from-Store” strategy. According to JLL, 45% of Internet customers for brick-and-mortar retailers utilize in-store fulfilment, making the role of the store essential to a retailer’s distribution strategy. Using ship-from-store will give the customer more flexibility, faster delivery times and lower shipping costs.



And for retailers that already have prime real estate in the form of brick-and-mortar stores, it gives them a huge competitive advantage against e-tailers that are without a physical presence.



Consumer purchasing trends and buying habits turn on a dime, so what works now won’t necessarily be tomorrow’s winning solution. The one certainty is that enhancing the retail customer experience requires constant change — a changed mind-set, a changed direction and, more often than not, a changed or renovated physical environment. Big data and technology are central to shaping a successful omnichannel platform that will drive more customer business — both online and offline.



Steve Jones is managing director and lead of JLL’s project and development services multi-site group.