The Future Of Retail Stores – Saving for the future is a concept that is discussed every year. At this point, it is increasingly difficult to determine exactly what the consumer will be like tomorrow, let alone in a few years. Things are harder for 2020. Widespread store closures due to the pandemic and a growing reliance on online shopping have forced retailers to re-evaluate everything. Against this background, the idea of future savings does not hold up very well. The store of the future is not really a store at all. In a keynote at RetailSpaces (Almost) Live, Lee Peterson, vice president of thought leadership at WD Partners, outlined a possible future for the physical retail format. “Let’s not go back to what happened before,” he said. “It’s an opportunity to start over, rethink what we thought before and embrace new thinking.” With that in mind, Peterson highlighted several ways that new consumer shopping habits will impact how retailers get to the true “store of the future.” The new reality of today’s online world When stores across the country were forced to close their doors due to the pandemic, consumers turned to online shopping. “Digital sales growth was stronger than expected,” Peterson said of online sales last quarter. “If you didn’t configure eComm properly, you were in big trouble.” In fact, stores like Walmart, Dick’s Sporting Goods, Bath & Body Works, and Target saw a three percent increase in sales during this period. “People are definitely buying online, and that’s the most important thing about this whole thing,” Peterson said. These online sales aren’t just for home delivery. Peterson points out that there is a huge increase in the number of BOPIS purchases, i.e. purchases online and pickup in store. Peterson noted that consumer sentiment around online shopping, or BOPIS, has also changed during the pandemic in ways that will shape the future. Last year, when survey respondents were asked how they preferred to shop, only 25 percent said they did not go to the store, preferring to shop online and have it delivered to their home or pick up in store. In June 2020, 52% of consumers answered the same question, and consumers chose not to visit retailer websites. “This is one of those situations where it was a disaster, but it affected the way consumers thought and the way they shopped,” Peterson said. “If you think we are going back to normal, think again. Basically, you need to rethink what stores are.” The way forward To meet consumers’ new shopping experience expectations, retailers will need to adapt their portfolio strategies. For example, when WD Partners asked consumers to rate black stores, the acceptance rate was 35 to 50 percent. These types of consumer responses, he said, begin to paint a picture of a marketing approach that needs to change. “Is this the future of retail? You drive up to a place, you see electric cars and drones… is this the future of retail?” asked Peterson. “Our answer right now is partly yes. This is the future of retail.” If customers say they want to buy in three or four different ways, sellers will want to have all of them available. Otherwise, Peterson will hit the target and they will go somewhere else. Darkness Given consumers’ desire to spend less time in the store and the ability to measure their vision, Peterson realizes that dark stores are an important part of the puzzle. Black stores are retail locations, such as fulfillment centers, that are used exclusively for online ordering and pickup transactions. Customers never enter the website. “Some people call these black stores, but fulfillment centers have a long history,” Peterson said. “In this case, turn right and someone will take your order.” The interior looks like a warehouse where all orders are fulfilled electronically and there are no construction workers walking around to pick up customers, Peterson said. In urban areas, the cabinet concept can be applied to dark store packaging. “As we know, everyone loves BOPIS, it’s a great choice,” he said. The hybrid path “Hybrids will also be very important,” he said. “Stop, you have your groceries in the car behind the store, but you can shop in the store.” Peterson showed an example of this concept, where customers can shop for groceries on the left side of the building, while on the right side there is a one-stop shop that allows the customer to retrieve and place groceries in the trunk. The idea, Peterson said, has an 80% approval rating among surveyed customers. Large-format stores and shopping centers may also be subject to such changes. For example, Peterson noted that the front of the building will be devoted to retail stores, while the back will house a center for fulfilling online orders. Order takers can be installed on one side of the building, while on the other side customers can park their cars and enter the stores. “Now Target is doing something like this. It fulfills 80 percent of its online orders in the back room,” he said. “Of course it will happen.” The hybrid model can also be used in a restaurant format where customers can enter for takeaway or express delivery. There was to be a full restaurant at the back of the building. Dedicated Experience Concepts For specialty retailers who can easily ship from home, or who currently have a large e-commerce business, a lot of testing needs to be done on store capabilities. Showroom stores, Peterson mentioned, are a well-proven concept for consumers and a strategic strategy that these retailers can achieve. “You can try something and send it in and then have something like a café, a game room that is just an experience,” he said. This can work well for flagship stores like Nike, where customers can touch products, try products and talk to experts. Redesigning the Customer Experience to suit customer needs means some companies will create a mix of black stores, hybrid stores and showrooms in the future. “If you already have stores … some of them can be converted or opened as black-owned stores,” Peterson said. You can then open a small number of locations in a hybrid model, fulfilling orders in the back and providing a store experience in the front. A very small number of stores in this area may offer experiences or showrooms for customers who prefer to shop in peace. “This type of organization is exactly what consumers are looking for,” Peterson said. “It’s based on what the customer wants, he wants BOPIS, showrooms. You have to work for the client again. We think this is the way forward.”
Ashlee Kieler is an experienced multimedia journalist based in Iowa. His passion is telling stories about health, education, marketing and many other topics.
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The Future Of Retail Stores
Physical sales again. RetailSpaces is a retail development and design community for startups. March 24-26, 2024 | Austin, Texas Find out more! Most of us have made a lot of purchases online over the last three years, so it’s easy to forget that while e-commerce continues to grow, most retail sales still take place in stores. In the third quarter of 2022, e-commerce accounted for less than 15% of all sales. This means bricks and mortar are still doing well, and not just because consumers are eager to get out of the house again.
Ai Enabled Smart Stores: The Future Of Retail
Consumers now see stores as places where they can check out merchandise before purchasing, get shopping advice, find relaxing or exciting experiences, meet like-minded people and practice sustainability principles. Marketers can meet these expectations by providing customers with the experiences they expect. Here are six ways we see retailers creating in-store experiences that motivate us to keep going.
1. Make your showroom smart. Most consumers prefer to see a product in person before making a purchase decision, especially if it is expensive, sophisticated or has many options. Forrester and Shopify found that more than half (54.5%) of holiday shoppers in 2022 plan to visit brick-and-mortar stores for this reason. A good in-store experience can lead to a purchase during the visit or online after the visit, while a bad experience represents a missed opportunity.
Retailers can capitalize on consumers’ desire to see products in person by turning physical stores into showrooms that provide employees with professional guidance in selecting and considering products. Another major phone and computer manufacturer offers a prime example of this type of showroom experience, with experts available to guide customers through purchasing and technology issues. The design of a flat-pack retail store shows customers how their products perform in different environments and gives them the opportunity to touch and try things.
2. Provide a playground for experimental diving. Trying new products and finding new ways to achieve this
Retail Digital Twins Reshaping Your Shopping Experience
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