Physical Retail Isn't Dead: It's Working With Tech to Be More Human-Focused

Early on, Daft Punk tried to convince the world that they were technology rather than humans. To prove the point, their live performance consisted of the two robots perched atop an enormous pyramid of screens, blaring lights and sound at the audience. As it turns out, this was a perfect visual metaphor for the current state of retail marketing, where technology regularly launches uninvited assaults on all your senses, from digital billboards to pop-up ads to in-feed autoplay videos.

Eventually, Daft Punk evolved, shifting their focus from the robotic to the human side of music on their album Human After All. The single “Robot Rock” featured a searing major rock chord guitar riff instead of artificial loops and sounds effects, and the artwork featured an iconic Gibson double-neck guitar. After years of electronic excess, the duo was making a public affirmation of their humanity.

I’m reminded of this evolution whenever I hear the hollow industry predictions that “physical retail is dead” and “online retail is taking over,” ideas that are early Daft-Punk-esque in their thinking. Just as the Parisian pair eventually returned (in part) to their human roots, retail will always do the same. Physical retail will remain essential to any successful, future-focused strategy because of the uniquely human emotions and actions these experiences inspire.

Physical remains fundamental

The industry conflict is too often framed as physical retail versus online retail. Statistical analyses of the growth of ecommerce almost always get coupled with a story surrounding the decline of physical retail, with a heavy focus on the closure of malls. These two things are undoubtedly linked, but experts often communicate this as a zero-sum game. This ignores a fundamental human truth: People now and into the future will continue to leave the house and shop in physical retail. In fact, over 75–80 percent of purchases made today are still through physical retail channels.

Then why are people panicking?

The root of this anxiety is due to a fundamental shift in the economy that underlies rental spaces in which retailers operate. Vacant stores on the high street and empty car parks at malls represent a seemingly shocking change in the nature of human behavior. The resulting impact on retail appears severe and dramatic right now, but in reality, it represents a transition to a hybridized vision for retail experiences.

Pureplay has given way to clicks and mortar, embracing the central role of the physical in the future of retail. Digital tracking, interactivity and immediacy are important tools, but physical retail remains the linchpin, the hub of a brand’s experience and its relationship with its customers. And for good reason.

A technical flaw 

Online retail only seems like an heir apparent until you understand its crucial limitation. Any technological innovation that can be developed will be copied, quickly becoming the expected norm. As a result, technology can only exceed expectations the first time it is used. From that point on, it is merely striving to meet this new standard of expectation.

This is why more human-centered experiences are so important. Humans empowered by technology can exceed expectations at every point of the customer service model, online or offline. Technology alone cannot consistently provide good customer service, but technology designed to enhance human experiences can exceed expectations every time. Even the focus of AI innovation in the business world is as much about collaborating with humans as it is technology.

Like Daft Punk embracing their human and electronic identities for a stronger album, man and machines working together is the single most powerful and effective method to grow retail. The pillars of modern online commerce—Amazon, Google and Alibaba—have started to realize this and are investing in physical stores for their own branded service model, with smaller internet-based brands such as Peloton, Warby Parker and Bonobos following suit.

Embrace human experience

Consumer research continually points to the fact that shoppers are attracted to human experiences. For example, millennials are attracted to emotions, with 48 percent more likely to buy from a brand if they know the people behind it. They are drawn to brands that are more humanized and focus on transparency, experience and community rather than quality. This perhaps correlates directly with research showing that most millennials (53 percent) make the majority of their purchases from brick-and-mortar stores.

Seeing an opportunity, some of the world’s top brands have taken the lead to integrate these emotional elements into their retail operations, fostering their own unique human connections in the process.

Apple svp of retail Angela Ahrendts, for instance, has not only reshaped Apple Stores by encouraging employees to “make a human connection” by directly introducing themselves to customers, but also unveiled a new, community-centric in-store experience in the process.

A retail shift awaits

Marketing and retail are set to have a big Human After All moment, just like Daft Punk. Technology has been the focus of innovation, and it remains a compelling theme in media and culture. But its true role as a transparent facilitator of human behavior is just now becoming more apparent. This is especially true in retail, where successful strategies can drive a clearer understanding of human behavior, forcing companies to make sure that technology isn’t being employed for the sake of it, but rather to build more compelling retail experiences.

Even as data tracking and interactivity become a greater part of retail experiences, humanity will always outperform technology. But really, we’ve known this all along. Just like Daft Punk’s Guy-Manuel de Homem-Christo and Thomas Bangalter, the industry may seem to be in the midst of a digital takeover, but humans are the heart and soul behind the robot suits at day’s end.