The Restructuring of Retail
It seems like every day we hear of a new store closing or a retailer shifting their focus to e-commerce. For all the talk about the “retail apocalypse”, brick-and-mortar isn’t dead. It’s simply being restructured to meet the needs of modern customers and offer safe, convenient, and memorable experiences.
A record 9,300 stores closed in the U.S. in 2019. However, for every company that is closing stores, 5.2 brands are opening stores. And while many brands are shifting to e-commerce, they aren’t completely leaving brick and mortar behind. Their strategies are simply evolving to meet the needs of their customers. It’s important for brands to have the right information and a data-driven strategy to truly understand their customers and what they want. While most millennials prefer to shop online, a large number of them regularly shop in stores. The rising Gen Z, which will be an even more powerful consumer group than millennials, prefers to shop in physical stores so they can experience the brand and see and touch the products. Understanding what customers want is crucial to retail success.
Customers who prefer to shop in store don’t want the same shopping experience that has existed for decades. Retail needs to restructure to follow three major trends:
Shoppers today are looking for more than just a place to buy goods. They want a place to experience the brand and see the products in person.
Mattress company Casper moved from strictly ecommerce to physical stores when it opened an experiential store in New York City where customers could reserve a nap pod to rest and test the mattresses. The showroom also allows customers to see and touch the mattresses before ordering, which helps many customers feel more comfortable with their purchase instead of buying online, sight unseen.
Online clothing company Modcloth sells a variety of unique and vintage-inspired pieces. Its physical experiential stores allow customers to peruse the wide assortment of items to find the perfect piece. Each customer in store is paired with a stylist to help them find the right items and then order them online. That same experience can’t be replicated on a website.
Buy Online, Pick Up In Store
Commonly referred to as BOPIS, a growing number of stores are blurring the line between ecommerce and physical retail. Surveys have found that 85% of customers are motivated to use BOPIS, with many drawn to the convenience of being able to order items online but pick them up quickly in a nearby store.
Nordstrom was an early adopter of this trend with its Nordstrom Local stores, which don’t feature any inventory. Instead, customers can pick up their online orders and access a variety of services, including an on-site tailor, hair salon, and wine bar. The store offers shoppers a personalized and VIP experience instead of the standard retail trip.
Target underwent a digital transformation to blur the line between online and physical stores. Customers have numerous options of how to get their orders, including having it brought out to their car to picking it up inside the store. The options allow for a more convenient and personalized experience.
Investing in a permanent storefront is expensive and risky, but many brands are turning to limited-run pop-up shops that are only open for a few weeks or months and feature exclusive merchandise and unique experiences. These stores allow brands to test the water of specific physical locations.
Makeup brand Glossier opened a series of pop-up shops across the country that highlight the company’s extensive product lines. Consumers who are used to purchasing their Glossier products online can try any product in person and get personalized recommendations about the products that are best for them.
Retail is constantly evolving. These three trends show how retail is being restructured to bring life to brick-and-mortar. Brands need to stay agile and leverage new trends to create experiences for modern customers.
I recently outlined five strategies that retailers can leverage to gear up for a big comeback with Tracie Kambies, Principal and US Retail Analytics & Information Management and IoT Lead, Deloitte Consulting LLP. You can watch the webinar on demand here.