October 07, 2021 | Grant Harland

What’s in store for the future of brick-and-mortars?

Summary: Retailers are paving the path of a completely new in-store experience. What’s the purpose of brick-and-mortar stores today and what role will they play in the future of retail?

The return of brick-and-mortar stores was warmly received by consumers this summer, but the purpose and design of physical stores remains unknown to the future of the industry. Over the past 18 months, we’ve closely watched the constant iterative approaches that retailers have taken with their stores to evolve to match consumer habits since the start of the pandemic.

retail worker using a mobile device

While many questions remain about the role of the in-store experience, that doesn’t mean retailers are moving forward blindly. Industry forums like the 2021 RetailX bring together the top minds in the industry and are responsible for hosting conversations around the new roles that these brick-and-mortars will play in traditional cash-and-carry shopping, as well as in facilitating the eCommerce acceleration.

Why in-store?

While the expansion of digital commerce is undeniable, retail stores still play a major role. According to the U.S. Census Bureau, in-store sales were responsible for 86.7% of Q2 sales in 2021.1 As we navigate through today’s challenging environment, retailers with large store footprints need to incessantly innovate their business models to stay relevant in the hearts and minds of consumers.

We’ve learned that retail customers value instant gratification for items of necessity as well as splurge purchases. Development in omni-channel functionality—especially in-house fulfillment methods like buy-online-pickup-in-store (BOPIS) and ship from store—allows for brick-and-mortar stores to contribute to eCommerce growth, not fight against it. It’s unsurprising then that retailers are looking to refocus efforts on in-store experiences as a way to provide a true omni-channel customer experience (CX).

Smarter stores

Consumers spend their day switching between social platforms, streaming applications, digital assistants, eCommerce websites, mobile devices—you name it. And all of this is occurring before, during and after they step into a physical store location. Needless to say, the shopping journey is complex.

Retailers who are using new technology advancements have a chance to grow their eCommerce business without cannibalizing store sales. Headless commerce is an approach that retailers use to separate back-end eCommerce solutions from front-end consumer facing applications that allows retailers to provide a more personalized in-store experience and parallel their eCommerce strategy. 

Stores are leaving impressions on consumers with innovative interactive kiosks, digital signage, facial recognition and smart lockers. These Internet-of-Things (IoT) devices are creating more opportunity for retailers to provide personalized content inside their four physical walls, and leveraging a headless commerce model allows for a more consistent CX throughout the entire customer journey. Utilization of IoT technology not only allows for personalization but also enhances the CX, reduces costs and gives an avenue for retailers to collect valuable customer data.

Headless commerce lets retailers be swift in delivering shoppers’ impressions while in-store. In return, stores’ reliance on connectivity and real-time data continues to grow, assisting retailers in delivering the most personalized experience possible. Business leaders should consider the role of the network in supporting their headless commerce models and other IoT technologies by using a secure and high availability network.

Room for iteration

Retailers had to recently learn how to roll out new technology and policies years ahead of schedule due to rapidly shifting consumer behavior during the COVID-19 pandemic; they also learned how to fail fast in the process. Christiana DiMattesa, Senior Director of Marketing at Under Armor, said to a crowd at RetailX, “Customers are giving us more leeway to test and fail with our concepts, even if it isn’t pretty. They recognize the world has changed, and they are letting us get weird.”

It’s now possible to be agile with brick-and-mortar stores—inventing, fumbling and trying again—without losing customers. As retailers blend their omni-channel experiences and experiment with new things, it’s easy to wonder what the purpose of the store will be in the future. Clearly the purpose of a store is no longer just for cash-and-carry, but how far do we go in utilizing stores for fulfillment, and in parallel with the fast-paced eCommerce world?

Retailers’ brick-and-mortar presence is key in competing against progressive eCommerce companies. How will these changes affect the future physical footprint of retailers? We don’t pretend to know, but what’s certain is the adaptation of in-store experiences is far from complete.

References

  1. “Monthly Retail Trade.” U.S. Census Bureau. September 16, 2021.

Key takeaway: While the future of physical retail stores is unknown, the possibilities are endless thanks to new technologies, smarter consumers and retailers, and the openness for change.
Retail Industry Analyst

Grant Harland

Grant has more than 11 years of experience in the retail, contributing to his deep knowledge around business development, technology, product development, sales and merchandising.