In the last few months, headlines about the future of retail have been decidedly doom-and-gloom, and would lead us all to believe there is no hope for this “dying breed.” Stores are going bankrupt! Online shopping is eating into the sales of physical stores! Yet, if the picture is really that bleak, why are Amazon and other online retailers making a push to acquire or build new stores, and why are 9 of top 10 retail brands by sales still predominantly brick-and-mortar?
What’s going on? Let’s rewind a little.
In a treatise to retail of the times, Rebecca Bloomwood, protagonist of Sophie Kinsella’s book, Confessions of a Shopaholic said, “A man will never love you or treat you as well as a store. If a man doesn’t fit, you can’t exchange him seven days later for a gorgeous cashmere sweater. And a store always smells good. A store can awaken a lust for things you never even know you needed. And when your fingers first grasp those shiny, new bags…oh yes… oh yes.”
This book (published in 1999) coincided with the advent of online shopping. At the time, the benefits of online shopping were few and indistinct. Early adopters talked about the ability to buy any book they wanted in their pajamas from the comfort of their living rooms. They raved about having purchases delivered to their homes in one week for just a small fee. Since then, online shopping has dramatically evolved and become much more pervasive. Consumers can now access limitless inventory online, in almost any product category. Online stores are highly organized, easily navigable and searchable. You can compare products and prices, and read impartial consumer opinions while you shop. Plus, you don’t have to wait in line to complete a transaction.
Even further back in history, in the 1960s and ‘70s, when computers entered the mainstream, Sydney Harris, the respected Chicago Sun-Times journalist, said, “The real danger is not that computers will begin to think like men, but that men will begin to think like computers.” His observation holds true for what is now happening to retail (at some danger to the business of brick-and-mortar).
The experience of shopping online over so many years has now trained shoppers to expect a lot more from physical stores. Shoppers are not falling out of love with physical stores; they still want to go to stores, however they also want to be rewarded for their time and efforts.
Technology can make shopping at physical stores a superior experience
We know that digital channels influence shopping at brick-and-mortar stores. In September 2017, Spark Foundry conducted several ethnographic interviews and “shop-alongs” with shoppers in three retail categories to understand how they use technology while shopping in-store. Our research confirmed that consumers today extensively use their mobile phones before and during their store visits. Mobile phones are used for a variety of tasks: Getting product inspiration; searching for products and store locations; making shopping lists; reading product reviews when in-store; comparing products and prices; and redeeming coupons.
What shoppers are using today are mostly hacks. These methods are a patchwork of mobile search and apps - a temporary fix until a more comprehensive solution is born. Shoppers are looking for a more seamless experience that combines the best of digital conveniences and the tactile nature of offline shopping. They want shopping at physical stores to be smarter, more productive, and fulfilling.
How can stores create a better shopping experience?
One word – Personalize!
Although personalization is complicated, it’s already being delivered in online shopping environments. Algorithms crunch millions of data points, juggle thousands of copy versions, visuals, and price combinations to make decisions in nanoseconds and deliver personalized experiences for shoppers. But, how do you start to personalize a one-size-fits-all physical store? How can you go from mass to individual when stores struggle to keep costs down?
Start with what people fundamentally need and want from retail.
People seek convenience, value, quality, respect, and reward. Information that leads them to these wants and needs is quickly coveted. Our shopper research uncovered three simple and conceptual vectors of personalization that can apply to any retail category.
Human vs. Machine
It seems the world is divided into two groups of people: Those who like a human touch in the store (Embracers) and those who want nothing to do with other people (Avoiders). Embracers like the warmth and friendliness of sales agents. They rely on sales agents for their deep knowledge and passion for products, and to share their personal experiences. Avoiders, on the other hand, think speaking with sales assistants is a waste of time. They believe the internet always knows more and is more efficient. They feel awkward or trapped when speaking to a sales agent.
Routine vs. New Purchase
Many retail visits often seem routine, particularly in categories such as grocery, pharmacy and quick service restaurants. People purchase the same products every week or every day. They want to get through these routine purchases as quickly as possible, because it’s a boring necessity, and a transactional experience. However, every once in a while, shoppers crave excitement, even in mundane ritual. When they are in the mood to try something new or are discovering new products, they would like to make trying and purchasing them easy.
For example, frequent visitors to quick service restaurants often order the same items each time. But once in a while they may want to be “introduced” to a new dessert item recently added to the menu, for example. They do not want to be bombarded by information or be “sold to”, but merely suggested.
In & Out vs. Browse Trip
People enter a store with two different mindsets: They are either task-oriented, or browse-oriented. When people are task-oriented, they want to be in and out of the store as quickly as possible. They want to get through their shopping list and checkout in the shortest time. When they are browse-oriented, their mood is more expansive. They enjoy the serendipity of walking through aisles, finding and trying new products, and gathering more information.
These vectors are a starting point for creating a personalization shopping ecosystem that includes technology, data, and a deeper understanding of people. Addressing these insights gets to the heart of mitigating friction people experience in physical stores. Many in the industry are already working successfully with technology providers in AI/bots, location awareness, and interactive displays to help develop personalization solutions for clients.
Next time you enter a store, imagine being greeted by a big screen (or on your mobile phone), that asks: “How would you like to be assisted today – sales agent or machine agent?”; or “What’s your shopping mood today – In & Out or Browse?”; or “Good to have you back today Jeff… would you like to order your favorite dish today, the double cheeseburger, or want to try something new?”
Thanks to industry innovation, these evolved and more exciting shopping days are coming soon to a retailer near you.