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.
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.
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
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
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.
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
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