As Online, Physical Retail Stores Merge, What Is The Future Of The Storefront?

Amazon announced that it is acquiring Whole Foods for $13.4 billion on Friday, adding 461 physical grocery stores to the original ecommerce disruptor.  

Amazon’s acquisition at first seems like an enigma, considering how many department stores have recently closed physical storefronts in favor of online commerce. Ecommerce has skyrocketed, but “the brick-and-mortar store is still very much a part of the customer journey,” says Michael Klein, head of retail at Adobe.

Klein discussed how online and physical retail stores are merging in a conversation with Email Marketing Daily.

Klein is the director of strategy for the retail industry at Adobe, and has over 25 years of retail of experience. Klein is Adobe’s resident expert in the retail vertical, something Adobe has in key strategic verticals like travel, media and entertainment, healthcare, finance, B2B high-tech manufacturing, automotive, and the government and public sector.



Klein says retailers embracing tools for omnichannel campaigns are at the forefront of retail innovation, particularly if they can successfully merge online and in-store experiences. He argues that email may be one of the culprits “to addictions to discounts online,” and that some retailers have sacrificed their revenue to provide deeper discounts.

“Email still does drive a significant percentage of any retailer’s business,” says Klein. “But retailers can definitely get more personalized, use more data, and manage preference centers. There’s certainly fatigue and abuse in email. Most aren’t at the point where they can recognize if I’m a woman or man.”

Retailers continue to send promotions to drive customers to physical stores, but others have made their stores go-to destinations. For example, Nike has incorporated screens into their stores in Berlin and New York City with an interactive social media element. Klein says the Berlin location attracts 1,000 fan posts on their wall during football games.

Klein says some retailers have also seen success using mobile apps with loyalty rewards details, but that it largely depends on the vertical. Customers aren’t willing to download an app for every store they shop at, but will do so if the mobile app is really providing value to their life.

“What qualifies as adding to a seamless experience?,” asks Klein. “That’s where the hard questions are in retail. We all want to get to the holy grail of personalization, but bad personalization is worse than no personalization.”

This is where artificial intelligence can really benefit retailers, and Klein says that merchandisers should not fear the machines.

“We need to embrace it or we’ll become dinosaurs,” he says.

Artificial intelligence can help retailers by alleviating logistical burdens, says Klein. Managing 30-40 physical stores is not an insignificant thing to do, and AI can help retailers manage inventory and meet customer expectations. The key is to use AI for optimization and automation, but to give marketers and retailers “the tools to go in and adjust, test, and tweak things where they want.”



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