A shopper visits a suitcase store to take a vinyasa yoga class. When she’s done, she goes to a lecture about sleep science at a mattress store and she winds up at a women-in-business networking event at a clothing shop.
There isn’t a riddle. This is the future of retail.
Shopping is getting strangely personal as the leading lights of online retailers are opening millions of square feet of brand-new physical stores that are as much about experiences and events as they are products. This is happening as the so-called “retail apocalypse” is in full swing and several household-name retailers shutter their doors.
Brick-and-mortar is thriving. Brick-and-mortar is dying. Critics and boosters are both right, and what separates the haves and have nots of retail expansion is a mixture of philosophy and data.
The evolving in-store experience
Legacy brick-and-mortar retailers think about stores in terms of direct sales and profits. But for online retailers, loss-leading stores can still be valuable. Physical stores offer them credibility and allow their shoppers to interact with their product in-person to build brand equity. The actual sale can take place anywhere.
In-store experiences also allow brands to tell their story and engage with their customers on a more personal level. Away, an online suitcase retailer, has opened stores in Los Angeles, New York City and London, and uses them to host concerts and yoga classes. Online mattress retailer Casper hosts classes on getting better quality sleep. Others like women’s workwear brand MM LaFleur carry no inventory but allow customers to visit, try, and, if they buy, ship the product directly to their home.
In-store events need not relate to what the companies offer (i.e. Away). The point is simply to be useful and exciting and grow closer to customers. All the while, these stores and events collect the real prize: data.
Gleaning insights from offline data
Offline data (including location and POS) feeds online data in way that should make brick-and-mortar an incredibly attractive investment for retailers of all sizes. For instance, online retailers can use their physical stores to collect visitors’ sizing information and preferences to improve ecommerce personalization and conversions.
And companies can sometimes glean more information from real life footpaths than online ones. Consumers aspire online, but live offline. They sometimes click out of boredom, but they travel somewhere with genuine intent. Companies who couple their shopper’s preferences with location data about where they travel can improve site selection, merchandising and advertising.
Don’t rule out the legacy retailer
Legacy retailers that have a more holistic understanding of the value of physical space and are committed to merging online and offline data to build brand equity will continue to do well too.
Target, for example, has invested in technology to make the in-store shopping experience more seamless and convenient for its consumer. Can’t find an item you’re looking for on the store shelves? Target employees can help you locate it online, process the payment, and ship it to your home for free.
This is important since convenience and customer experience are the main drivers for shopping in-store. Close to 80 percent of consumers who responded to a recent GroundTruth study agreed “After a good in-store shopping experience, I am more likely to recommend that brand/store to my friends and family.”
The future of retail is bright
While online shopping has forever impacted consumer expectations, shoppers are still passionate about their favorite brands having physical stores. Over 70 percent of survey respondents agreed with the statement: “I would be very disappointed if a store I shop at closes.”
And even the most cloud-committed etailers eventually come down to earth. Both Amazon and Alibaba have mad significant investments in offline-focused companies to further its retail footprint.
Instead of retailer shutting their doors, brands should focus on adapting their retail strategy to fit the desires of today’s omnichannel customers. Offline data, when paired with online insights, can help them know their customers more intimately and build a more profitable relationship. We’ll be discussing this more in depth next week when we present at Advertising Week NY with Alibaba, Petco and Wavemaker.
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Eric Hadley is an experienced digital sales and consumer marketing executive whose career includes deep success across a range of marketing roles from the agency side, consumer and brand marketing, sales management and trade marketing. Prior to joining GroundTruth, Eric spent 15 years at Microsoft in a variety of roles, ran sales and marketing at The Weather Channel and worked at Pinterest and Outbrain.
