• by Harriet Green , Op-Ed Contributor, December 11, 2017

Niche brands thriving on social media are taking customers from incumbent retailers, leaving behind a widespread carnage of brick-and-mortar stores. Physical stores have been seeing a steady shift in sales from in-store to online since 2000. While the volatile state of retail is a well-known reality, the tale of a retail apocalypse is simply untrue.

Overall sales, both in-stores and online, are actually on the rise. Simply put--the industry is not dying; it’s transforming, which presents an exciting opportunity for retailers to create new interactive experiences, build relationships with new customers and drive new revenue.

The ability to shop online is innate to Generation Z, the first digitally native generation, and one of the new target groups for retailers. A recent study found three times as many Gen Zers said they shop in a store most of the time compared to online. With this generation set to reach 2.6 billion globally by 2020, retailers have an enormous opportunity to create more engaging experiences with their brands that resonate with this ‘always on,’ mobile-focused and high-spending demographic.

Enticing digitally-minded customers like Gen Z to visit their stores requires retailers need to move away from the standard business model of the past 50 years, which solely focused on driving transactions. The retailers that are growing amidst this industry reinvention share one common trait: an urgency to experiment with new concepts that attract and retain shoppers long after they leave the store. Today, the shopping journey continues on social media, at events, in email and more.

To reimagine the standard bricks-and-mortar design, retailers need to evaluate their cash flow and redirect it from traditionally invested overhead costs, such as stores, and invest more in innovation or R&D. Tides and budgets are shifting towards creating more efficient operations that allow for an ongoing process of innovation – just look at Alibaba’s recent $15 billion investment in overseas research hubs!

This commitment and investment to reinvent the in-store experience means retailers are willing to employ exercises to think creatively and listen more closely to their customers. By listening and creating intimate customer journeys, they can uncover ways to improve engagement and streamline distribution. Another path retailers are exploring is using connective and emerging technologies, such as artificial intelligence and virtual reality, to create memorable, interactive experiences, and help customers discover new products and services.

What makes these two examples of employing deeper listening exercises and experimenting with new technologies similar is that the retailers’ operations are not organized by transactions, products or prior purchases. Rather, they are cultivating nimble platforms capable of being more responsive to customer’s needs and creating experiences that bring them back again and again.

It’s impossible to predict exactly how the physical retail market will fare at this point, but one thing is certain: to make brick-and-mortar stores matter again, retailers need to invest in innovation. Strategically integrating and implementing technologies that create unique experiences and encourage ongoing relationships with customers, even beyond the store, will be the vital to keeping retailers’ doors open.