Commentary

Bricks And Pixels: The Blueprint For Rebuilding Your Retail Foundation

It used to be that retail was in the showroom and ecommerce was in the broom closet. For a long time, retailers — in all categories and off all sizes — kept their dot-com operations located on a different floor from traditional operations, or in a different building, or in a city 1,000 miles away.

Dot-com retail was treated like the little offshoot business. Traditional retail merchandisers needed to move big volume with big risks and big responsibility, while those digital kids were just playing around.

The time has come where those “kids” are now running operations worth 20 to 50 times one store’s revenues and still growing fast. That kid may be your boss now.  (Congrats, kid, if you’re reading.)

Knowing how different your retail business was just 10 years ago, imagine how different it will need to be in 10 more years. You’re in a state of constantly rebuilding, and your future foundation won’t be bricks & mortar; it’ll be bricks and pixels.

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What started this need for reconstruction? Amazon. In olden days (like, a decade or two ago) big box retailers conditioned the masses to pay less for almost everything, as long it fit within the 300,000 sq. ft. of their retail store. Then Amazon built a new model retail monster proving that many categories don’t need to be shopped in-person. Amazon and other solely digital retailers have slowly but surely retrained the masses on how and why to shop the Web. Target.com, walmart.com and macys.com are the new, legitimate, revenue-generating “stores.”

Who holds the power as you reconstruct? There have been some major, specific seismic shifts that shaped who holds the power in the new retailing landscape. For 50 years or more, the manufacturers have held all of the power, money and intelligence. But as retailers began to consolidate and Wal-Mart, Kroger, Costco, Home Depot and many others grew exponentially fast to mega-retailers, the power shifted from the manufacturer to the retailers.

So for the past 10 years, the retailers have really been in the power seat with both money and intelligence – some with more than the manufacturers ever had access to. Then another shift took place: The power now rests within the shopper. Technology, innovation and access to comparative information catapulted the shopper right by the retailer and manufacturer. They now can decide to showroom the retailers and even showroom the manufacturers by  controlling where, when and how much they will be paying for your product or service.

The dot-com thinkers are architecting the future. Whether rooted in digital or eventually trained in digital, these are real, smart merchandising professionals that know how to use ecommerce to create a more valuable experience. The definition of value has changed, and is not just about the lowest price. User experience and relevance are just as important if not more.  Here are three strategies they employ to rebuild a bricks and pixels foundation that will withstand future upheavals.

1. Mirror the Online Journey In-Store

Online purchase journeys are definitively shaped by a site’s navigation structure. E-commerce sites have found success using historical data to up-sell customers with related searches/products and other personalized lists. Shoppers often use related product displays as a helpful navigation feature when dealing with huge sites and have come to expect this untraditional bundling of products. Brick and mortar retailers have limited shelf space but should similarly rethink how products are organized and displayed. Piperlime’s new SoHo location mirrors its online experience with the store divided into areas like “Girl on a Budget” (less than $100), Rachel Zoe & Olivia Palermo edited racks and “Top 10 Fall Trends.”

2. Constant AB Testing in Offline

A/B testing allows live sites to serve different versions of content, layouts and calls-to-action in an effort to improve conversions. The best ideas, rather than the most senior title, triumph in this test-and-learn model. The success of A/B testing on e-commerce sites has firmly established the need for structured testing and real-time data to improve all retail channels. With fewer physical constraints, sites can more cheaply, quickly and easily test and analyze new features. However, retailers must extending this philosophy to their brick and mortar channels, leveraging real-time data from both in-store and online streams to test different layouts and produce agile in-store optimization.

3. Empowerment Strategy Closes Sales

Ecommerce sites do not allow shoppers the tactile experience of exploring a product. They focus on providing customer reviews and robust content to help empower shoppers to make a purchase decision online. Brick-and-mortar stores naturally foster a higher product engagement with shoppers but can provide shoppers with better information during their visit.

Amazon’s transparency of product reviews has consistently increased page views and conversion rates and should be baked into all brick-and-mortar stores. Online and offline reviews should also be crowdsourced into lists and tips physically manifested in the store. To empower the customer and amplify the brand, enable wish list creation and social sharing during the in-store visit. To increase eventual conversions, use displays to indicate supply levels and ordering options for pick out-of-stock items

Recent research found that 70% of tablet users would like to buy an item via one click while reading their digital magazines. This is profound for traditional retail. The power of ecommerce combined with immediate transactions enables new competitors to enter the retail space. Traditional publishers like Cosmopolitan could begin to sell products directly, while sites such as Allrecipes.com can begin to deliver food directly to your door. Why shop aisle by aisle for each ingredient, when, with a single click your entire dinner menu can be delivered to you?

Brick-and-mortar stores have no choice but to pay attention and bring the ease and convenience of the online shopping experience into their store experience.

 

 

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